Bruce Linton is not going gently into that good night.
Usually, executives who get fired will go quiet for a while, taking time to repair the damage to their ego and work out what they want to do next. But no one who knows the former co-chief executive officer of Canopy Growth Corp. was surprised to see him making the TV news rounds within hours of his announced termination on Wednesday pontificating on the future of the industry.
What’s next for Linton? His non-compete agreement means he can’t participate in the Canadian cannabis sector, but that still leaves other jurisdictions wide open.
“It’ll be interesting to see if he ends up at an American company,” said Greg Taylor, chief investment officer at Purpose Investments Inc. and manager of the $38 million (US$29 million) Purpose Marijuana Opportunities Fund, which holds Canopy stock.
Linton did, after all, pioneer the industry’s first large cross-border deal with Canopy’s acquisition of Acreage Holdings Inc., which will close if cannabis becomes federally permissible in the U.S. “I gotta think he’s at least looking at some of the U.S. opportunities,” Taylor said.
Linton sounds like he has few regrets about having to stay out of the Canadian pot industry.
“Anybody who’s dumb enough to launch a new cannabis company in Canada, I don’t know what they’re doing, they should have been at it six years ago. Canada is done,” he told Bloomberg TV. “You’re going to end up with a few winners and a whole bunch of people who wonder why they started.”
Linton sounded pragmatic about his ousting, which he blamed on a clash of views with Constellation Brands Inc., the alcohol giant that owns about 36 per cent of Canopy and holds a majority of its board seats.
“I don’t love this outcome but it’s not necessarily wrong for the company,” Linton told BNN Bloomberg TV. “I think they’ve earned the right and deserve the right to have more decisive input as to how it’s run.”
It appears Constellation was fed up with Canopy’s slow path to profitability and shrinking margins, and perhaps Linton’s entrepreneurial stubbornness didn’t help. When asked what caused his firing, Linton told BNN Bloomberg that it was “probably me,” adding that he doesn’t always think “everybody’s idea is a good idea.”
Whatever you think of how he ran the company, Linton leaves Canopy with his legacy intact (and a fortune in shares), as Aurora Cannabis Inc. Chief Corporate Officer Cam Battley tweeted:
We should all give Bruce Linton a round of applause, and shake his hand when we see him. A true pioneer in this sector, with a whole bunch of important achievements & milestones to his credit. He’s made history, and he has reason to be very proud.90210:25 AM – Jul 3, 2019Twitter Ads info and privacy191 people are talking about this
Linton is already working his magic at another firm. He said he plans to spend more time at tiny software-services company Martello Technologies Group Inc., where he’s co-chairman, causing its stock to triple over three trading days.
At Canopy, meanwhile, Linton’s former co-CEO Mark Zekulin will become sole CEO but plans to step down once a replacement is found. That replacement is likely to “come from within Constellation Brands’ network,” said John Zamparo, an analyst at Canadian Imperial Bank of Commerce.
As the Canopy news broke Wednesday, Ontario announced that it will allow 50 additional cannabis stores to open in the province, tripling the total number of outlets. The government plans to hold a lottery on Aug. 20 for 42 private stores with an additional eight allocated to First Nations reserves. It cited “marginal improvements” in supply for the decision.
The province’s stringent capitalization requirements for lottery entrants “are favourable towards large, well-capitalized cannabis retail companies,” said Eight Capital analyst Jenny Wang.
These additional stores in the country’s most populous province should give a significant boost to overall Canadian cannabis sales, which jumped 23 per cent in April from March after Ontario opened its first bricks-and-mortar outlets.
Read more at Financial Post