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The Canadian Press
Published Wednesday, July 3, 2019 8:56AM EDT
Last Updated Wednesday, July 3, 2019 9:29AM EDT
TORONTO — Canopy Growth Corp. co-chief executive Bruce Linton is stepping down from the cannabis company’s top job and his role as board chairman, effective immediately.
The Smiths Falls, Ont.-based cannabis company announced Wednesday that co-chief executive Mark Zekulin will become the sole CEO and will work with the board to begin a search to find a new leader to guide the company in its next phase.
Linton, who also stepped down as chairman and a director of Canopy Rivers Inc., has been the public face of the company as it has grown into a leader in the cannabis industry.
“Creating Canopy Growth began with an abandoned chocolate factory and a vision,” Linton said in a statement. “The board decided today, and I agreed, my turn is over.”
Linton noted that he had “full confidence in the team at Canopy.”
Canopy was founded in 2013 and recently received a $5 billion investment from Constellation Brands, the massive alcohol company whose brands include Corona Beer and Kim Crawford Wines.
The announcement comes after Canopy last month reported a wider-than-expected fourth-quarter net loss attributable to shareholders of $335.6 million or 98 cents per share, despite a jump in net revenue to $94.1 million that beat market estimates.
In reporting the results, Linton said Canopy invested heavily during the quarter for longer-term growth, such as boosting its production capacity and preparing for the launch of edibles and other next-generation pot products once legal later this year.
Constellation Brands, Canopy’s biggest shareholder, said last week that it was “not pleased” with Canopy’s recent year-end results as it recorded a loss in its own financial first quarter in connection with its stake in the Canadian cannabis company.
With Constellation’s vocal disappointment with Canopy’s earnings, the move is not surprising, Cowen analyst Vivien Azer said Wednesday.
“The magnitude of losses for WEED (Canopy) has expanded far more than we had expected, and while we commend Linton for his vision in establishing the world’s leading cannabis company, we believe new leadership will be a welcome change,” she said in a note to clients.
Zekulin said Canopy will never be the same without Linton.
“I personally remain committed to a successful transition over the coming year as we begin a process to identify new leadership that will drive our collective vision forward,” he said in a statement.
“I know the company will continue to thrive as the Canopy story continues on for years to come.”
As part of the change, Rade Kovacevic, who has been leading the company’s Canadian operations and recreational strategy, was named president.
The board also appointed John Bell to replace Linton as chairman. Bell has served on the board as lead director for five years.
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