Canada's cannabis company Canopy Growth Corp. stalled the market Wednesday announcing that executive vice president Bruce Linton is stepping down from his role and will leave the board.
which is the largest cannabis company at market value thanks to a $ 4 billion investment from Corona beer dealer Constellation Brands Inc.
said Mark Zekulin has agreed to be the only CEO and will work with the board to find a new leader, a task that includes internal and external candidates.
"Creating Canopy Growth began with an abandoned chocolate factory and a vision," Linton said in a statement. "The board decided today and I agreed that my trip is over."
In an interview with CNBC, Linton acknowledged that he was being exterminated. "I ended," he said in a telephone interview.
Asked what he would do next, Linton said he had gone to Costco to fill the car with gas, "and I have a long list of important things like doing. I would hope for the end of the day I have "What will happen next time, and it will not be in cannabis in Canada, but it is a pretty big world out there," he said. [1
a multi-state operator who will give it a foothold in the lucrative US market as soon as federal laws are relieved.
"Bruce has been a pioneer in the industry and it will be difficult to see him go," says Korey Bauer, portfolio manager for Cannabis Growth Mutual Fund
launched by Foothill Capital Management.
Matt Hawkins, managing partner of private equity firm Cresco Capital Partners, agreed.
Linton "helped develop the innovative, forward-looking deal he made with Acreage, one of Cresco Capital's early portfolio companies," said Hawkins, whose company is focused on the cannabis market. "We applaud Bruce for leading Canopy to become the largest listed cannabis company by market value, and look forward to both his and Canopy's future and the positive impact the company will continue to have on the sector."
For more, read: Canopy Growth does not buy Acreage Holdings, it buys the right to buy Acreage Holdings
The news comes only a few weeks after Canopy's fourth quarter fourth quarter earnings disappointed Investors like the company's losses mounted and it sold less cannabis in order, in the second quarter of recreational cannabis legalization in Canada.
For more, read: Canopy co-CEO defends big losses as a deserved reward for potato employees
Constellation Brands, who has made a great effort at Canopy, was not happy with Chief Executive William Newlands said on the company's earnings call last week that he was not happy with Canopy's numbers.
"While we are still satisfied with the investment in the cannabis area and the long-term potential, we were not happy with Canopy's recent reported annual results," Newlands said in the conversation. "However, we continue to aggressively support Canopy on a more focused long-term strategy to win markets and form factors that matter, while making a clear path to profitability."
For more on Mark Zekulin: Canopy Growth is co-responsible for the potato company's ambitions in the United States and more
Related: In the "marijuana ghetto" at Davos, Canopy Growth found his American pot partner
Constellation's share of Canopy's losses came to $ 106 million, or $ 78.2 million including tax benefits.
Constellation made its original investment last year with the opportunity to take a majority interest in the future. The two companies are collaborating on developing potable cannabis products to be launched in Canada on 16 December. For that purpose, Canopy has previously told MarketWatch that the Corona manufacturer helps design a bottle factory across the street from its Smiths Falls, Ontario headquarters and helps with due diligence when asked during acquisition.
Bauer from Cannabis Growth Mutual Fund said he expects Canopy to search for a large consumer package.
"The success of Canopy and all cannabis companies will come down to brands," he said. "In the short term this may be negative, but we have already seen the largest CBD in the US name (Charlotte's Web) Adrienne Elsner as CEO."
Elsner is former president of the US snack department at Kellogg Co.
K, + 5.08%
Stocks fell 4% in early trading before recovering most of these losses. It was last down just 1.9%. The shares have won 43% in 2019, while ETFMG Alternative Harvest ETF
has received 27%.
Constellation Brands was down 0.4%, but increased 24% in 2019.
S & P 500
SPX, + 0.49%
has increased 19% and the Dow Jones Industrial Average
DJIA, + 0.39%
has received 15%.
Further reporting by Greg Robb in Washington, D.C.
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