Canopy aims to hire new CEO by year’s end; coincidentally, Bruce Linton crashes its AGM party
Canopy Growth Corp. is aiming to wrap up its search for a new CEO by the end of 2019, its chairman said Tuesday, just a few hours after the company’s former co-chief executive and founder revealed his latest ventures.
“We have identified and are interviewing an exceptionally talented pool of well-seasoned executives,” John Bell told Canopy’s annual general meeting for shareholders in Toronto. “With the process well along, we anticipate, and I am confident that, the CEO transition will be completed by the end of the current calendar year.”
Meanwhile, a press release from ousted Canopy founder Bruce Linton said he was taking on roles as an “active advisor” in three companies and as an “activist investor (the good kind)” in two other firms.
The new advisory roles include Linton becoming executive chairman of Gage Cannabis Co., a Michigan-based cannabis company, and a director of Mind Medicine Inc., a Toronto-based firm developing psychedelics-inspired medicines.
Linton was ousted from Canopy in July after the chief executive of U.S.-based alcohol giant Constellation Brands Inc., Canopy’s biggest shareholder, voiced disappointment over its results.
Linton’s absence loomed over Canopy’s shareholder meeting on Tuesday, its first such get-together without him. In his remarks, Bell credited Linton’s work with helping Canopy get to where it is today.
“When the book is written, and the movie is made, Bruce will definitely have a leading role,” the chair said.
Linton’s former co-chief, Mark Zekulin, was left to field questions about the leadership shakeup as the company’s sole CEO, albeit one who is set to be replaced.
“I’m incredibly proud of everything we’ve accomplished, of everything we’ve done, but there’s an opportunity, there’s a natural progression, for new leadership to come in and to help drive things forward, and that’s the decision I made,” Zekulin said in response to a shareholder question.
Zekulin told reporters afterward that the list of candidates he’d seen included names from the pharmaceutical, consumer packaged goods and alcoholic beverage industries, and that the candidates were not just from Canada.
When the book is written, and the movie is made, Bruce will definitely have a leading role.
John Bell, chairman, Canopy Growth
The search for Canopy’s next CEO is being conducted as the firm, along with others in the cannabis sector, faces investors who are increasingly profit hungry.
Smiths Falls, Ont.-based Canopy reported a net loss for its fiscal 2019 of $670 million, and its stock is down more than 40 per cent over the past year. On Tuesday, Zekulin acknowledged they see investors “are starting to pivot” with their thinking.
“With some closer-term metrics now available, in some ways for the first time, there’s a shift right now as people look at those metrics,” Zekulin told shareholders. “So as management, it is our responsibility to ensure we get this balance right. We speak to the near term, while always keeping our eye on the big prize.”
Zekulin stressed the business was still a “long game,” and reiterated they are eyeing positive net income within three to five years.
While Linton reportedly has a non-compete agreement barring him from Canada’s cannabis sector, in an interview with the Financial Post he said he settled on the companies because of their entrepreneurial attitudes and scientific bent. The companies he’s advising are also either based outside Canada or, in the case of Mind Medicine, targeting a different drug.
When asked if his announcement was timed to coincide with the Canopy AGM, Linton said: “Well, not intentionally. I think it’s divine intervention.”
Linton said he had previously told media he’d be back in September to announce his next move.
“I own a bunch of the (Canopy) stock still,” he said. “All of my favourite people that I’ve worked with for six or seven years and built this thing with are there. I love Smiths Falls, I love the people who work there, I love the work they’re doing. I didn’t love being fired, but the reality was, it was probably the right thing they had to do. And so, I don’t actually have any change in blood pressure when it relates to that stuff.”