Shares of Canopy Growth Corp. (NYSE: CGC) opened Wednesday’s session sharply lower amid reports of co-CEO Bruce Linton stepping down with immediate effect. The announcement of Linton’s departure and exit from the board of directors of the world’s largest cannabis company came as a surprise to the market. While the company begins the search for Linton’s successor, co-CEO Mark Zekulin took over as the sole CEO.
Linton, a prominent figure in the management team, had played a pivotal role in the development of the company. Meanwhile, Linton reportedly told CNBC that he was terminated. He became popular through his interactions with various media houses and publications, in which he often explained the company’s strategies in detail.
Linton, a prominent figure in the management team, had played a pivotal role in the development of the company
“While Canopy will never be the same without Bruce, the team and I look forward to continuing to do what we have done for the past 6 years: investing in world-class people, infrastructure and brands, and always seeking to lead through credibility and vision. I personally remain committed to a successful transition over the coming year as we begin a process to identify new leadership that will drive our collective vision forward,” said Zekulin in an official statement issued by the company.
In addition, the company named Rade Kovacevic, who currently leads the Canadian operations and recreational strategy, as president. Also, senior member John Bell was appointed as chairman of the board of directors.
Canopy Growth recently appointed Mike Lee as acting CFO, giving a boost to the stock. Lee, a Constellation Brands (STZ) veteran who had been serving as EVP of finance at Canopy, is expected to be made permanent in the future.
In a key development, Constellation Brands last year made a significant investment in Canopy Growth. According to Linton, one of the pre-conditions for the investment, which gave the alcohol giant a 35% stake in the company, was a reconfiguration of the board.
Meanwhile, a section of the market is upbeat about Canopy Growth’s prospects after Linton’s exit. There is speculation that the pot company will scale new heights under the new CEO, which makes the stock an attractive investment target, especially at the current prices.
Canopy Growth shares traded down 2% early Wednesday, after closing the preview session lower. The stock has gained about 40% since January this year.