Nov 7, 2019
Ex-Canopy CEO Linton joins U.S. operator Vireo as executive chair
Bruce Linton: Pot sector's economic contribution should have been an election focus
Bruce Linton can finally reveal what was under the "MSO" tag on his T-shirt.
The former Canopy Growth Corp. co-chief executive officer said Thursday he plans to join U.S. multi-state operator Vireo Health International Inc. as its new executive chairman to help sharpen the company's science-rooted approach to cannabis and strong focus on intellectual property.
"They're not in the medical or recreational [cannabis business], they're in the science business," Linton said in a phone interview with BNN Bloomberg. "These are the guys who win licences, understand how to create products people want, and do it in a way that meets a professional standard that I thought is unequal.”
Linton appeared on Bloomberg Television in September to discuss his new ventures following his termination from Canopy Growth. During his interview, an "MSO" tag was pinned to his shirt, leading to speculation on what U.S. cannabis operator he was going to join.
"The name behind a lovely piece of paper held together by four safety pins was indeed [Vireo]," Linton said, adding the delay in making the formal announcement was tied to obtaining necessary regulatory approval to join the company’s board. Kyle Kingsley, Vireo's chief executive officer, told BNN Bloomberg in a phone interview he convinced Linton to join his board after spending the day with him in Ottawa and Smiths Falls, Ont. discuss plans on how to help grow the company.
“About 48 hours after he left [Canopy], I sent him a text [message] with a concise note on who we are and what we do," Kingsley said. "He responded rather promptly and we had the pleasure of driving around together for the day. We realized fairly quickly we were philosophically on the same page."
Linton's appointment will likely give Vireo a much-needed shot in the arm after a string of negative headlines. The company's shares are down 79 per cent from a high of $6.55 in April, shortly after its initial public offering a month prior.
Its most recent financial quarter also came in short of analyst expectations, with second-quarter revenue reported at US$7.2 million and a net loss of US$2.0 million.
Additionally, two former Vireo executives faced criminal charges after they were accused of smuggling medical marijuana from Minnesota to New York. The charges were dropped last month after New York state prosecutors struck a deal for both executives to each finish 80 hours of community service and remain on probation for one year.
Linton, who also serves advisory roles at Michigan-based cannabis dispensary chain Gage Cannabis USA, CBD pet food maker Better Choice Co. and medical psychedelic provider Mind Medicine Inc., said one of Vireo's main advantages is its focus on patents and research partnerships with U.S. academic institutes on medical marijuana.
"Vireo's mission is to own the science and intellectual property," Kingsley said. "We're willing to yield a little bit of market share to own the future."
Analysts say Vireo appears sufficiently funded with US$30 million in cash on hand to fund its operations over the next year. However, Eight Capital analyst Graeme Kreindler said in an August report that Vireo would require additional financing if it wanted to pursue any M&A activity or hurry its planned expansion in several U.S. states.
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