Canopy Growth Co-CEO Bruce Linton Canned Over Poor Results
Wed Jul 3 2019
Canopy Growth Corp. (NYSE: CGC) co-chief executive Bruce Linton recently said he was terminated by the Canadian cannabis company following recent quarterly results that left investors disappointed.
“I was terminated,” Bruce said on CNBC on Wednesday morning. He also added, “The board had decided they wanted a different chair and a different co-CEO, so I’m out effective immediately.”
Mark Zekulin, who shared the top job with Bruce Linton, will become the sole chief executive of Canopy Growth and the new solo CEO will work with the board to begin a search to identify a new leader. The search will include both internal and external candidates, the company said.
Corona beer maker Constellation Brands Inc. (NYSE: STZ) owns nearly 36% of Canopy following a roughly $4 billion investment late in 2018.
“While we remain happy with our investment in the cannabis space and its long-term potential, we were not pleased with Canopy’s recent reported year-end results,” said Constellation CEO William A. Newlands said last week when Constellation released earnings. “However, we continue to aggressively support Canopy on a more focused long-term strategy to win markets and form factors that matter, while paving a clear path to profitability.”
Last month, Canopy Growth reported a Q4’19 loss of Canadian $323.4 million, or Canadian $0.98 a share, compared with a loss of Canadian $54.4 million, or Canadian $0.31 a share, a year ago. Net revenue rose to Canadian $94.1 million from Canadian $22.8 million a year earlier, beating Wall Street expectations.
With Canopy Growth being the premier cannabis growth stock in the Canadian marijuana space continuing to lose money it bodes poorly for other players in the cannabis stock market that do not have the supply chain scale that Canopy has. It makes senses that the cannabis market lags behind the overall S&P 500 if the best company cannot turn a profit.