Hexo, formerly called Zenabis, once employed 475 people but is now down to 108

A major cannabis producer in northern New Brunswick is cutting more than half its local workforce.

Hexo, formerly called Zenabis, is laying off 142 workers at its Atholville plant.

The Ottawa based Hexo bought Zenabis in 2021.

The plant employed about 475 people just two years ago, and at one time was expected to bring more than 700 jobs to the Restigouche region.

CBC News asked Hexo for comment, but didn't receive a reply.

The layoffs announced Wednesday leave the plant with just 108 employees and are raising questions about the company's future in the region.

"I'm going to try and talk with the CEO tomorrow," said Jean-Guy Levesque, the mayor of Atholville

"I'm going to try and see exactly where they are. Are they going to shut down the place? Are they going to try and keep on?"

Fall from grace

What was then Zenabis bought its Atholville warehouse and plant location in 2014, before the company was even licensed to grow cannabis.

At the time, the company was touted as an economic messiah for the economically depressed region, with one CBC New Brunswick headline reading, "Small New Brunswick village banks on pot to revive economy."

But cracks in the cannabis foundation soon began to appear.

In early 2020, the company said it was reducing its entire workforce by 22 per cent but would not say how many of those jobs would be in Atholville.

Levesque said he's been told that the issue isn't with the community, or the product it makes, but with a glutted cannabis market still struggling with black market sales.

"They have more than they're able to sell right now," said Levesque.

Levesque said the job losses are a blow to the region.

He said many of the affected workers have been offered severance pay of up to eight weeks, which should dull the immediate financial impact.

And the region is in desperate need of workers, so there is work out there.

"Maybe they're going to be able to find a job pretty fast," said Levesque, adding that training that would be needed first.