• Follow us

Economy

Canopy CEO ousted as board decides his ‘turn is over’ | The Star

Company founder Bruce Linton is out as CEO at Canopy Growth, sent packing after investors grew impatient with ballooning losses and high spending at the world’s biggest cannabis company.

While the company’s initial press release Wednesday morning tried to portray the change as a resignation, saying the founder “will step down,” in several interviews, Linton left no doubt that he’d effectively been fired.

“I think ‘stepping down’ might not be the right phrase,” Linton told CNBC. “I was terminated.”

In the TV interview, Linton was somewhat philosophical about the change.

“At the end of the day, sometimes entrepreneurs are entrepreneurs because they’re not super employable,” he told CNBC.

ARTICLE CONTINUES BELOW

Mark Zekulin, who had been co-CEO with Linton, will be sole CEO on an interim basis while Canopy searches for a permanent top executive.

The move comes just weeks after Canopy reported it had lost $323 million in its most recent quarter, higher than the company’s own forecasts, and analysts’ expectations.

It was also, crucially, too big of a loss to stomach for beverage giant Constellation Brands, which last year invested $5 billion in Canopy, and controls the majority of seats on Canopy’s board. Constellation reported a $245 million (U.S.) loss in its own most recent quarterly results, and laid the blame for that loss squarely at Canopy’s feet.

Constellation CEO Bill Newlands told analysts in a conference call after his own company reported a quarterly loss that he was “not pleased with Canopy’s recent reported year-end results.”

Constellation owns roughly 35 per cent of Canopy’s shares, but has the option to take majority control of the company, which Linton co-founded as Tweed Marijuana Inc. in 2013.

While he’s out as CEO, Linton still owns 18 million shares in Smiths Falls, Ont.-based Canopy. Linton, who originally hails from Wellesley, Ont. began his business career with telecommunications company Newbridge Networks, and also spent time in the tech industry.

After starting Tweed in a former chocolate factory, Linton helped grow Canopy into the biggest player in the nascent cannabis market. Canopy, which has a market cap of $18.4 billion, has gone from $2.59 per share in its first day of trading in 2010 to a high of $76.91 this past October. It was trading Wednesday afternoon at $53.47.

ARTICLE CONTINUES BELOW

Canopy’s fourth-quarter loss was almost six times higher than the $54.4 million the company lost in the same period a year previously.

Dismissing Linton so abruptly could spell a change in Canopy’s strategy of growing market share and revenues at the expense of the company’s bottom line, suggested analyst Brett Hundley of Seaport Global.

“It seems clear to us that the board/Constellation Brands felt a need to move in a different direction, ahead. The public markets typically don’t have time for an investment strategy based on long-term success,” Hundley wrote in a report after Linton’s ouster. “Additionally, larger strategic investors may see negative impacts to their own financial statements from such a strategy, and their vision of process, structure and evolution may differ from that of founders.”

Hundley rates Canopy as “neutral,” but doesn’t have a target price for the company’s shares.

It’s still too early to tell just how much of a change Linton’s departure will have on the pace of Constellation’s growth strategy, Hundley wrote.

“We’re going to wait and see what decisions get made in coming months. We believe that Canopy is still committed to being a global enterprise, across both hemispheres,” Hundley wrote. “We believe that the company is still committed to being a leader in the Canadian and U.S. (hemp, marijuana) markets.”

The move is a welcome one, wrote analyst Vivien Azer at Cowen Research.

“The magnitude of losses for (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,” Azer wrote.

Azer rates Canopy as “outperform,” with a target price of $82 per share.

Azer wasn’t particularly surprised by Linton’s firing, noting that in addition to Constellation’s public disappointment at the company’s earnings, that a former Constellation executive had recently been installed as Canopy’s chief financial officer.

“Although virtually no details were provided with respect to the timing and rationale behind Bruce’s decision to leave at this time, we believe this will cause an influx of speculation in the market and likely weigh significantly on the stock,” Matt Bottomley, analyst at Canaccord Genuity, wrote in a note.

“We are surprised by this headline, but are also aware of Constellation Brands’ displeasure in Canopy’s recent FQ4 earnings, which represented a rather large miss on profitability.”

With files from Bloomberg and The Canadian Press

Get more business in your inbox

Get the business news and analysis that matters most every morning in our Star Business Journal newsletter.

Sign Up Now

Josh Rubin is a Toronto-based business reporter. Follow him on Twitter: @starbeer

Read More



Leave A Comment

More News

TORONTO STAR | BUSINESS

Metro Vancouver’s benchmark home price falls below $1M 2019-07-03 13:32:47The Real Estate Board of Greater Vancouver says the composite benchmark price for detached houses, townhomes and condos was $998,700 in June, marking

‘My turn is over’: Canopy Growth’s co-CEO Bruce 2019-07-03 12:31:38

Ontario to issue 50 new licences for cannabis 2019-07-03 11:58:00Eight stores will be allotted for First Nations reserves through a separate application process.

Indigenous group says Trans Mountain bid could be 2019-07-03 11:52:16

Telus makes biggest change in its wireless pricing 2019-07-03 11:40:07

Lee Iacocca was a CEO for the television 2019-07-03 11:34:22Famous for overseeing the development of the Ford Mustang, the Chrysler minivan and a government bailout, Lee Iacocca had a desire to dominate every o

Financials help boost Toronto stock market, U.S. stocks 2019-07-03 11:23:41

Statistics Canada reports merchandise $762-million trade surplus in 2019-07-03 10:29:13

Baby Boomers, not millennials, may be the most 2019-07-03 10:15:21Baby boomers — those born between 1946 and 1964 — earned the most money, took on the most gigs and earned the highest ratings on Wonolo, a

Democrats call for revival of meat labelling law 2019-07-03 10:05:21Twenty-seven House freshmen Democrats included the resurrection of COOL among several must-do USMCA revisions in a June 25 letter to Trade Rep. Robert

Canopy CEO Linton ousted as board decides his 2019-07-03 09:39:21‘At the end of the day, sometimes entrepreneurs are entrepreneurs because they’re not super employable.’

Canada posts unexpected trade surplus on record exports 2019-07-03 09:02:20Economists had been anticipating the trade gap would actually widen in May.

: Money

Montana governor says he’s open to idea of 2019-07-01 15:43:14Montana Gov. Steve Bullock said Monday during an online meeting about climate change that he's open to supporting the Keystone XL pipeline "if it's

Investment watchdog working to protect elderly Canadians from 2019-06-30 12:22:04The Canadian Association for Retired Persons that about one-in-five older Canadians are subject to elder financial abuse and notes that dementia may a

Canada’s GDP beats expectations with 0.3% growth in 2019-06-28 09:17:04The oil and gas sector gave Canada's gross domestic product a lift.

FedEx sues U.S. government over export restrictions after 2019-06-25 17:06:15The lawsuit challenges changes to export rules designed to keep technology out of the hands of entities or people that the U.S. government considers p

Federal transport minister approves sale of WestJet to 2019-06-24 20:08:42Federal Transport Minister Marc Garneau has given his approval to the proposed $3.5-billion acquisition of WestJet Airlines by Onex Corp.

Index funds, ETFs or robo advisors: What’s the 2019-06-22 06:00:26A financial planner and a portfolio manager discuss the pros and cons of each for small investors.

NEB seeks opinions on Trans Mountain pipeline process 2019-06-21 17:37:32The National Energy Board has issued a certificate for the Trans Mountain pipeline expansion after it was approved by Ottawa on Tuesday but is seeking

Canadian retail sales remain virtually flat in April 2019-06-21 09:41:49But the underlying trends appear better than the ho-hum headline data suggests, one economist says.

Desjardins says personal info of 2.9 million members 2019-06-20 14:20:39The company says those affected includes 2.7 million individual members and 173,000 business members.

Founder of crypto exchange Quadriga moved users’ funds 2019-06-20 13:57:52Gerald Cotten, who died in December, transferred customers' money to his own accounts and likely traded fake currency deposits for real cryptocurrenc

Canadian companies avoided up to $11B in taxes 2019-06-18 11:56:51Canadian corporations avoided paying between $9.4 billion and $11.4 billion in taxes in 2014, according to the federal tax agency.

Facebook unveils cryptocurrency plans for 2 billion users 2019-06-18 07:43:23The social network unveiled an ambitious plan Tuesday to create a new digital currency similar to Bitcoin for global use.

Canada Business - The

Michael De Adder Responds To Contract End After 2019-07-01 10:58:53The Canadian cartoonist who drew a viral depiction of U.S. President Donald Trump and the border crisis is defending his own credibility after his con

Medtronic Insulin Pumps At Risk For Cyberattacks: Health 2019-06-30 16:32:15Health Canada is warning diabetics and health-care providers that some insulin pumps could be susceptible to cyberattacks.The health agency released a

Canadian Cartoonist Michael De Adder's Contract Terminated After 2019-06-30 14:11:51Michael de Adder, a Canadian cartoonist who has been drawing professionally for almost two decades, saw his contract with four newspapers terminated a

How You Could Make Money Helping Canada Fix 2019-06-29 15:24:41This Canada Day weekend, it may be worth taking a moment to consider just how patriotic your investments are.If you’re a typical Canadian with t

Housing Affordability Report Shows Only 12% Of Vancouver 2019-06-29 15:14:20Are Canada’s housing markets even serving their own populations anymore? We are certainly not out of bounds to wonder that, given new resea

Toronto New Home Sales Soar 94% To Highest 2019-06-29 14:54:32Greater Toronto’s housing market has had a stellar spring, but it’s unclear if this is the start of another housing boom in the city, or j

Americans Coming To Canada For Insulin Have Some 2019-06-28 20:37:42TORONTO — The soaring cost of insulin in the United States prompted a group of American diabetics to head to Canada on Friday to buy the non-pre

Mandarin's Free Buffet On Canada Day Sparks Backlash 2019-06-28 18:05:43Mandarin, the popular all-you-can-eat Chinese-Canadian restaurant, is offering free buffet meals at all of its locations on Canada Day.The catch?Only

Federal Carbon Tax Is Legal In Ontario, Top 2019-06-28 12:30:05TORONTO —The federal government’s carbon pricing scheme is constitutionally sound and has the critical purpose of fighting climate change,

Apple Recalls 15-Inch MacBook Pro Laptops Over Fire 2019-06-28 09:32:49A popular Apple product is being recalled due to concerns over overheating batteries that could be a fire hazard.On Thursday, the U.S. Consumer Produc

Weed Edibles Will Still Get You High Despite 2019-06-27 12:15:27Marijuana edibles will soon be legal for purchase in Canada, but if you’re an experienced user, new regulations might mean that you need more th

Air Canada To Take Over Air Transat In 2019-06-27 09:38:02MONTREAL — The board of directors of Transat AT Inc. has approved a $520-million takeover offer by Air Canada, but the deal might have trouble t

CBC | Business News

How a lack of crash test dummy diversity 2019-07-03 04:00:00New research shows that while cars are safer than they've ever been, women are at greater risk of suffering serious or fatal injuries in a colli

Electricity and water do mix: How electric ships 2019-07-03 04:00:00New regulations on emissions from the shipping industry have companies looking at hybrids and pure electric ships to save energy and cut pollutants -

Sask. business people, including former Regina mayor, caught 2019-07-03 04:00:00Canada Border Services Agency officials used documents found in a trash bin to begin unravelling what they allege was a major immigration fraud scheme

TC Energy to sell U.S. natural gas assets 2019-07-02 23:09:34TC Energy announced late Tuesday it plans to sell four U.S. natural gas gathering systems and a company that gathers and processes natural gas for $1.

Lee Iacocca, former Chrysler CEO who rescued company 2019-07-02 22:34:22Lee Iacocca, the auto executive and master pitchman who put the Mustang in Ford's lineup in the 1960s and became famous when he resurrected Chrysler

CN re-routing six freight trains through Chatham corridor 2019-07-02 16:18:18CN said Friday that it will re-route six freight trains per day through its Chatham corridor until July 6, while crews work on resolving a train derai

Indigenous-led group eyes majority stake in Trans Mountain 2019-07-02 15:44:38An Indigenous-led group plans to offer to buy a majority stake in the Trans Mountain oil pipeline from the federal government this week or next &mdash

Christine Lagarde, Ursula von der Leyen nominated for 2019-07-02 13:55:38European Union leaders agree to nominate France's Christine Lagarde to be the new head of the European Central Bank and seal a deal on filling the ot

Dollarama signs deal for stake in Latin American 2019-07-02 13:34:28Dollarama Inc. has signed a deal to buy a 50.1 per cent stake in Latin American retailer Dollarcity, which operates stores in Colombia, Guatemala and

Mortgage insurer Genworth Canada may be sold as 2019-07-02 12:26:54Mortgage insurer Genworth MI Canada is up for sale as the company's U.S. parent is trying to streamline its operations as it works on being bought ou

Nike backs down after Kaepernick objects to shoe 2019-07-02 10:50:08Nike is pulling a tennis shoe adorned with a late-1700s edition of the U.S. flag after former NFL quarterback Colin Kaepernick complained to the shoem

OPEC agrees to maintain oil production cuts into 2019-07-02 08:43:42OPEC members won the support Tuesday of other major oil producing nations to extend a production cut for another nine months in a bid to shore up pric

Christian Science Monitor |

Why this company wants your old underwear 2019-06-17 15:52:06Will recycling textiles save the planet? Buying less and wearing your clothes longer might accomplish more.

Farmers caught between a flood and a trade-war 2019-06-17 15:52:06A $19.1 billion disaster aid package won't include much help for Midwestern farmers who can’t plant. Meanwhile a trade war puts farm

Why tariff threat is unsettling – even after 2019-06-17 15:52:06The threat of Mexican tariffs is off for now. But it could return – and the weaponization of tariffs may not be in the long-term interest of the

One group not happy about older workers: young 2019-06-17 15:52:06Americans under 50 believe the rising number of older workers hurts the economy, a recent poll shows. Longer and healthier life spans have allowed mor

Robot baristas in South Korea push automation forward 2019-06-17 15:52:06South Korea's coffee scene has a new face: robotic baristas. While automation raises concerns that finding entry-level jobs will become har

SEC moves to require brokers to reveal conflicts 2019-06-17 15:52:06In the past, not all financial advisers were legally required to put clients' interest first. But some say the new measure by federal regulators does

Medicare for all – why supporters can’t agree 2019-06-17 15:52:06Support for single-payer health care seems to have risen over the past year or so, but such a plan presents complex, and controversial, choices.

Where is workforce really booming? Among the oldest 2019-06-17 15:52:06McDonald’s wants to hire 250,000 senior workers. A CVS program avows that ‘Talent is Ageless.’ And nationwide the ranks of older wor

Car trouble: How symbol of freedom became a 2019-06-17 15:52:06A record 7 million Americans are 90 days or more delinquent on car loans, a new report finds. U.S. auto debt is also at a record: $1.28 tril

Uber’s founders have cashed in. How about the 2019-06-17 15:52:06Uber relies on an army of drivers whom it refuses to call employees. But some see its “Partner Protection” plan as a model for the gig eco

As US-China trade war ramps up, how will 2019-06-17 15:52:06China-made goods will cost Americans more, as President Trump presses Beijing for trade-talk concessions. By July tariffs may hit cellphones, shoes.

Walmart follows Target to enter retail shipping wars 2019-06-17 15:52:06The nation's largest retailer joins the next-day shipping competition. Walmart has one big advantage over Amazon – its more than 4,700 sto


Disclaimer and Notice:WorldProNews.com is not responsible of these news or any information published on this website.