Wanted: Ambitious, globally-focused chief executive to run the world’s biggest pot company. Must love profits.

With Bruce Linton abruptly out as co-chief executive, chairman and de facto face of Canopy Growth Corp. (WEED.TO), investors are likely wondering: Who is fit to step out of his shadow and satisfy the company’s largest shareholder?

While Mark Zekulin becomes sole chief executive in the near term, it’s unclear how long he’ll remain in the job. In its release announcing Linton’s departure Wednesday, Canopy announced plans to seek a “new leader to guide the company in its next phase of growth, which will include both internal and external candidates.”

It’s also clear that executives at Constellation Brands Inc., which holds four out of the seven board seats at Canopy, will have a significant say in who will be running the Smiths Falls, Ont.-based company in the future.

“We see this all the time,” said Neil Selfe, chief executive of Toronto-based Infor Financial Group and an early backer of Canopy’s, in a phone interview with BNN Bloomberg.

Mark Zekulin: Canopy's vision remains the same after Linton's ouster

Canopy Growth CEO Mark Zekulin tells BNN Bloomberg that the Canadian pot producer's vision remains the same even after the surprise departure of co-CEO and chairman Bruce Linton.

“The skillset that’s required to get a company off the ground is different than running a company in the long term. Bruce was an amazing visionary and entrepreneur but clearly Constellation believes that a different skillset is required for its next part of Canopy’s journey.”

Whoever that person is will have the task of taking control of the world’s biggest cannabis company at a pivotal moment.

Canopy already controls roughly one-third of Canada’s legal recreational pot market, and it has big plans to be a dominant player later this year in the cannabis-infused market, targeting the still-nascent beverage category while aiming to make a big splash with vape devices.

That new leader will also take the helm of a company with operations in 15 countries, ranging from the U.K. to Lesotho to Colombia, mainly in the medical cannabis space. It also has major U.S. ambitions, as evidenced by its US$3.4-billion deal to potentially acquire American cannabis operator Acreage Holdings Inc., a transaction uniquely constructed by Linton that abides by the restrictions imposed by regulators that forbid Canadian pot companies from operating in countries that haven’t legalized marijuana yet.

But more importantly, Canopy’s next-generation leader will likely need to find immediate ways to rein in the company’s outsized losses back to a level that would make Constellation, its biggest shareholder, more comfortable with its investment.

They will also need to readjust an apparent disconnect between Canopy and Constellation executives. Canopy’s now-sole CEO Mark Zekulin told BNN Bloomberg in an interview that “clearly there was an unalignment between Bruce and the board,” which ultimately led to Linton’s departure. Still, Zekulin added that he doesn’t expect any major change to the company’s vision under Linton of generating “strong revenue to work toward profitability.”


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    It’s clear that Constellation wasn’t happy with Canopy’s most recent quarter where it reported a net loss of $335.6 million, up sharply from a loss of $61.5 million a year earlier. That led Constellation to report a US$828-million decrease in the fair value of its 45-per-cent stake in Canopy, for which it spent $5 billion last August.

    Irwin Simon, the interim CEO of Aphria Inc., is familiar with filling a position vacated by a colourful predecessor in the cannabis industry. Simon, who took over running Aphria after Vic Neufeld stepped down amid alleged improprieties with the company’s acquisitions in Latin America, said cannabis producers need to step up now and show their investors a clear path to profitability.

    “You’ve got to commend what [Linton] did with Canopy. He was very creative but the company was ready for the next step,” Simon told BNN Bloomberg in a phone interview. “If we make a commitment to shareholders, we have to deliver. If we raise money, people want to make sure that you’re fiscally responsible with it.”

    Several analysts stated the pot producer’s next leader will likely come from within Constellation's network and will be more focused on ensuring Canopy’s financial results improve.  

    For Linton, it appears that he won’t rush back into the cannabis sector. In a brief phone conversation with BNN Bloomberg early Wednesday, Linton said he signed a non-compete agreement and isn’t looking for another run at a different pot company.

    Instead, he plans on fielding potential job offers while finally enjoying life at home, joking that his wife has already assigned a list of chores for him to do. “I’ve got to take my car to the shop to get it looked at. I haven’t had any time to get it fixed because I’ve been driving everywhere all the time,” he said.

    But as Selfe puts it, Linton won’t be twiddling his thumbs and waiting for the phone to ring.

    “I suspect you haven’t seen the last of Bruce Linton,” Selfe said.

    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.

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