David George-Cosh

Reporter

Follow|Archive

Investor interest in the cannabis market may have faded over the past year amid a broad sell-off in the industry, but former chief executive officer of Canopy Growth Corp. Bruce Linton thinks that enthusiasm will return to the sector once those same investors see the breadth of infused products in retail stores.

Linton, now the executive chairman of U.S. multi-state cannabis operator Vireo Health Inc., said retail investors — which account for the bulk of publicly-listed cannabis holdings — will return back to the cannabis market once they can actually go to stores and handle next-generation products such as infused edibles, drinks and extracts that are now legally allowed for sale in Canada.

“I’m really excited about [the first quarter] because I think you’ll actually see reasons to go to the stores that exist and a bunch of more stores [opening] so these advanced products could be things that don’t exist anywhere else on the planet,” Linton said during an interview with BNN Bloomberg.

“The level of enthusiasm and anticipation for that, I think, is not on par with what is being presented. So I think in January and February, a lot of retail [investors] are going to see these products and want that stock that makes that product.”

Linton’s comments come after a rough year for the legal cannabis sector, during which a myriad of issues emerged that weighed on the industry including an oversupply of dried flower product, regulatory mishaps and even Linton’s own termination from Canopy this past summer. The Horizons Marijuana Life Sciences Index ETF is down about 42 per cent so far in 2019. Meanwhile, shares of Linton’s former employer, Canopy Growth, are down about 34 per cent during the same period.

“It’s been a tough wrap to the sector for the year,” Linton said.

While Linton said he’s more interested in the opportunities emerging in the U.S. and European cannabis markets, he remains hopeful that in the Canadian market, some well-established firms can emerge as profitable businesses that can leverage their domestic operations and expand internationally.

“Show that you can do it, here’s our 50 per cent-plus margins, here’s our diverse products, here’s our intellectual property. Now, Mr. or Mrs. Shareholder, can we have your support to take over the world?” Linton said.

When asked whether he felt any responsibility for Canopy Growth’s recent string of quarterly losses and disappointing financial results, Linton said the company needed to “spend a lot of money building things” to ensure it would have a full range of products in the Canadian legal pot market.

“A lot of these things now will roll out and a lot of things will be there because we spent the money on the infrastructure,” he said. “Durable market share may be held by companies like Canopy because they’ll be first and best and it becomes a standard.”

Cannabis Canada is BNN Bloomberg’s in-depth series exploring the stunning formation of the entirely new — and controversial — Canadian recreational marijuana industry. Read more from the special series here and subscribe to our Cannabis Canada newsletter to have the latest marijuana news delivered directly to your inbox every day.