On Wednesday, Canopy announced in a press release that founding co-CEO Bruce Linton was “stepping down.” Within hours, Linton clarified to CNBC that he was fired as co-CEO and member of the company’s board. He said in a statement, “The board decided today, and I agreed, my turn is over.”
Financial Post, CNBC
- The termination follows comments from Constellation Brands CEO Bill Newlands that the company was “not pleased with Canopy’s recently reported year-end results.”
- Constellation, U.S.-based parent of Corona beer and numerous other alcohol brands, invested $5B in Canopy last fall for 38% of Canopy shares and control of the Canopy board. Last month Constellation’s Mike Lee became Canopy’s acting CFO.
- Linton said his firing was Constellation’s decision. “About eight months and two days later [after the Constellation deal closed],” Linton told CNBC, “I think the board had decided they wanted a different chair and a different co-CEO.”
Globe and Mail
- Constellation said it “fully supports” the decision to fire Linton. One analyst told Barron’s, “When you write a [US]$4 billion check, you have certain expectations.”
A Canaccord Genuity analyst suggested Constellation wants a CEO from a blue-chip company to replace Linton, while Toronto financial CEO Neil Selfe said, “The skillset that’s required to get a company off the ground is different than running a company in the long term.”
- Noting the two biggest LPs are now run controlled out of the US, Globe analyst Andrew Willis was supportive of Linton, saying he “lost his job because his visionary approach for Canopy Growth Corp. didn’t fit with the predictable, quarter-by-quarter profits demanded by [Newlands], a booze-industry veteran and Harvard Business School grad.”
Globe and Mail
- Linton’s vision for the company was long-term, but Newlands indicated he was more interested in profits in the shorter term than building up the company.
Financial Post, Globe and Mail
- Linton’s other co-CEO, Mark Zekulin, is the last of the original Canopy co-founders (Chuck Rifici left Canopy in 2015 and runs Auxly today). Zekulin became the company’s only interim CEO, but will also depart once a permanent CEO is in place.
Linton said he knew the Constellation deal might be the beginning of the end for him, “But we would have been fools not to bring in a $5-billion cash infusion just so we could keep our jobs.”
- Linton will receive $925,000 severance pay. The Globe estimated he made more than $200M during his time as CEO.
Twitter—Betting Bruiser, Globe and Mail
- Linton said he did not plan to sell his 18M shares in Canopy and Canopy Rivers.
- Two weeks ago, Bloomberg ran an extensive profile on Linton. Last weekend, two separate UK reports on Canopy and its headquarters in Smith’s Falls, ON, compared Linton to Charlie and the Chocolate Factory‘s Willy Wonka, but for cannabis.
Bloomberg, the Guardian, the Spectator
- Commentator Mike Zmuda noted, “it’s quite possible this may be an overall worse situation for medical access and other areas. […] Looking at it through a business-only lens, he deserves praise / recognition for elevating the profile of cannabis worldwide. Through a cannabis lens though: big alcohol now controls one of the largest cannabis companies in the world.” (Zmuda also wrote a thoughtful reflection on Linton’s firing on his website.)
Twitter, Night Court Cannabis Edition
- Globe columnist Barrie McKenna argued cannabis may never be a major profit-making industry in Canada, where the cannabis market is “small, highly regulated (as it must be) and vastly oversupplied.”
Globe and Mail
- Industry people want the government to invest in educating the public about the coming slate of soon-to-be-legal cannabis products.
- The C-45 Quality Association called for cultivators and regulatory people to join their quality/compliance organization, which is working to develop best practices and standards for the Canadian cannabis sector.