Canopy to hire new CEO by end of year: chairman [UPDATED]
Current chief executive Mark Zekulin, says it's his choice to leave, and it's a “natural progression'' for new leadership to drive things forward
TORONTO – Canopy Growth Corp. expects to complete its search for a new chief executive officer by the end of the calendar year, its chairman said during its first annual meeting without co-founder Bruce Linton at the helm.
The “robust” search is “well underway,” and the cannabis company is interviewing a number of “well-seasoned executives,” chairman John Bell told shareholders in Toronto.
“We anticipate, and I am confident that, the CEO transition will be completed by the end of the current calendar year,” he said.
However, Bell also commended Linton on his hefty contributions to the Smiths Falls, Ont.-based cannabis producer.
“We are here today in large part because of the perseverance, determination and vision of Bruce Linton… When the book is written, and the movie is made, Bruce will definitely have a leading role.”
Bell’s comments come months after Linton was terminated from his role as co-CEO and chairman in July after its biggest shareholder Constellation Brands said it was disappointed in the company’s latest earnings.
Meanwhile, Linton on Tuesday announced his next moves, which include advisory roles at three companies including U.S.-based dispensary company Gage Cannabis Co. and Toronto-based Mind Medicine Inc., which is focused on psychedelic-based medicines.
Canopy’s current chief executive Mark Zekulin, previously co-CEO alongside Linton, has said he would stay on until a suitable replacement was found.
Zekulin told shareholders at the meeting that it was his choice to leave, and a “natural progression” for new leadership to drive things forward.
The list of candidates includes executives who come a variety of industries, including pharmaceuticals, consumer-packaged goods, beverage and alcohol, he said. The list of potential hires also includes candidates from Canada, the U.S. and Latin America, Zekulin told reporters.
“Generally speaking, there’s a list of people who would be amazing at this job and what it it will come down to is… the fit, the ability to walk into the room and know the culture.”
Some shareholders in attendance voiced concerns about the company’s abrupt change in leadership as well as its share price, which has fallen from as high as $65 in early April to $36.91 at close on Monday at the Toronto Stock Exchange.
Kay Mehren, who has been a Canopy shareholder for several years since its shares were $1.50 a piece, said she was disappointed about Linton’s departure.
“It’s hard to know how the company is doing, because there have been these significant changes recently… I feel uncomfortable any time a founder of a company is removed from it by someone else,” she said on the sidelines of the meeting.
Zekulin said Tuesday that while he was “sad” to see Linton leave, the CEO is but one piece of the overall puzzle.
He added that while Canopy, and the industry overall, is facing several headwinds such as slow store openings and delays in the launch of new cannabis products such as edibles, the long-term opportunity remains.
“It’s still a long game, everyone,” Zekulin said. “There will be macro events, there will be internal events that make this ride bumpy. But this is not a quarter-to-quarter race.”
One bright spot Zekulin pointed to is the legalization of new cannabis products such as edibles, beverages and vapes, which are due to hit legal shelves in mid-December at the earliest.
He said Canopy has about 50 next-generation products in the pipeline, but would not go into specifics just yet.
Zekulin also addressed vaping concerns south of the border, where U.S. authorities are investigating a string of lung illnesses and some deaths linked to the practice.
The initial information indicates that this is an acute problem, rather than a chronic vaping issue, Zekulin said, noting that he does not expect this will change its launch planning or timing.
Canopy has developed its own line of fully-integrated vape products “from scratch,” he adds.
“Vapes are a known form factor, but as we look at recent events, they are not a commodity,” he said. “The products, the features, the controls, the supply chain, the certifications, these things do matter.”