San Francisco (CNN Business) The world's largest cannabis company by market cap is getting smaller in size by shuttering 3 million square feet of greenhouses.

Canopy Growth on Wednesday afternoon announced plans to close two cultivation facilities in British Columbia, resulting in the layoffs of 500 employees. The company also scrapped plans to open a greenhouse in Ontario.

"Nearly 17 months after the creation of the legal adult-use market, the Canadian recreational market has developed slower than anticipated, creating working capital and profitability challenges across the industry," the company said in the statement. "Additionally, federal regulations permitting outdoor cultivation were introduced after the Company made significant investments in greenhouse production."

Canopy Growth CGC has an outdoor cultivation site that is more cost-effective, the company said.

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