Canadian weed producer Canopy Growth on Wednesday said Bruce Linton, who helped grow the world’s largest publicly traded marijuana company, will step down as co-chief executive effective immediately.
Mark Zekulin will now become the sole CEO of Canopy and he will work with the board to “identify a new leader to guide the company in its next phase of growth”. The search will include both internal and external candidates.
“Creating Canopy Growth began with an abandoned chocolate factory and a vision,” said Mr Linton. “The board decided today, and I agreed, my turn is over.”
He added: “Mark has been my partner since this Company began and has played an integral role in Canopy’s success. While change is never easy, I have full confidence in the team at Canopy — from Mark and Rade [Kovacevic’s] leadership to the full suite of leadership — as we progress through this transition and into the future.”
Corona beer maker Constellation Brands has invested heavily in Canopy as traditional makers of beers and spirits look to what they believe is the next big market for consumers seeking a buzz.
However, the company said last month that while it is “happy” with its investment in the “cannabis space and its long-term potential”, it is “not pleased with Canopy’s recent reported year-end results”. Canopy reported a bigger than expected loss in its most recent quarter.
Canopy has grown rapidly since it was founded in 2013 to boast a market capitalisation of C$18.1bn (about $14bn) and last month said it would buy US company Acreage in a $3.4bn deal, contingent on the US legalising marijuana at the federal level.
Canada has already legalised recreational marijuana use and while pot is still illegal under US federal law, 10 states and the District of Columbia have approved recreational (and medical) marijuana use in the US. Twenty-three states have legalised medical marijuana.
Interest in the pot industry has surged with venture capital investments in the cannabis market hitting a record high in the first five months of 2019. The US cannabis market saw $1.26bn through 80 deals by mid-May, according to data from a report by MGO and Ello, a cannabis investment banking and advisory firm.
Canopy on Wednesday also said Mr Kovacevic, a member of the team leading Canadian operations and strategy for its recreational arm, will assume the role of president.
US-listed shares in Canopy, which are up nearly 50 per cent year-to-date, were down more than 7 per cent to $37.35 in pre-market trade. Constellation Brands shares were down 1.1 per cent to $196.51.