Greenlane Holdings is the latest company to feel the effects of the cannabis-industry downturn.
The Nasdaq-listed cannabis-vaporizer and accessories company laid off 31 employees across its Torrance, California, and Boca Raton, Florida, offices on February 18, according to three former employees with direct knowledge of the cuts and a memo obtained by Business Insider.
Business Insider verified the identities of the people who spoke with us and granted them anonymity because they signed severance packages that include nondisclosure agreements. The layoffs were not publicly announced and have not been previously reported.
In response to questions from Business Insider, a Greenlane spokesperson confirmed the company cut about 30 workers.
A memo reveals the reasons for the layoffs
“As we look to the next phase of Greenlane’s growth, we have recently made a series of decisions that will better position us to streamline our operations and focus resources on the most strategic opportunities,” the spokesperson said in an emailed statement. “While difficult, we fundamentally believe the changes we are making are necessary and reposition our company for a stronger future.”
One of the sources who had been at the company for over three years said “every” department was affected and that Greenlane had been cutting back on companywide events in recent months while telling employees that everything was going well in all-hands meetings.
“I thought I was having my regular weekly meeting with my boss, but we went into a different room,” the source said. “When they told me, I was in shock.” 
Business Insider has also reviewed a memo sent by Greenlane CEO Aaron LoCascio dated February 18, which discusses some of the reasons for the layoffs.
“Since Greenlane was founded 15 years ago, we have hit some amazing milestones including our debut as a public company last year,” the memo reads. “We can all be proud of what we’ve accomplished. But our work is not done. As rapidly as we grew along with the boom of the legal cannabis industry and the swift rise of JUUL, we have also been challenged by the recent and strong headwinds facing the industry.”
The cannabis industry is facing headwinds
Those headwinds include a broader public-market downturn linked to a spate of vaping-related illnesses last year, lower-than-expected retail revenues in Canada and legal states like California, and legislative and regulatory hurdles that make accessing capital much more difficult than in other industries. 
Greenlane’s stock has lost 88% of its value since it went public in April, plummeting below $2 a share. 
LoCascio said that the decision to eliminate 31 roles was “not made lightly.”
“While difficult, we truly believe the changes we are making are necessary and present an opportunity to position our company for a stronger future,” the memo reads. 
The memo also says that the company isn’t “engaging with the press,” though an “event like this has the potential to draw interest from the news media, partners, and customers.”
Greenlane is far from the only cannabis company to let go of employees in recent weeks. Acreage Holdings, a cannabis cultivator and retailer, eliminated 40 positions last week, Business Insider first reported. And the Canadian cannabis giant Aurora laid off 500 employees in February, among other layoffs.
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