During the past trading week (July 1 to 5), Canadian marijuana producer Canopy Growth (NYSE:CGC,TSX:WEED) fired its co-founder and acting co-CEO.

Criticism from a marijuana executive to the Canadian regulators made headlines, while a rebalance for three marijuana exchange traded funds (ETFs) also caught attention.


Here’s a closer look at some of the biggest news during last week’s trading period.

Canopy Growth begins leadership change period

Canopy Growth, one of the world’s largest marijuana firms, announced on Wednesday (July 3) that it is undergoing a significant leadership change. It has decided to part ways with its co-founder and co-CEO Bruce Linton, who was terminated by the company.

“I think the board had decided they wanted a different chair and a different co-CEO,” Linton said during a televised interview. “So I’m out effective immediately and there’s a search to replace the transitioning co-CEO.”

During a conference call with analysts and investors, the management team of Canopy Growth’s biggest investor, alcohol producer Constellation Brands (NYSE:STZ), expressed disapproval of some of the recent financial results from the marijuana producer.

“While we remain happy with our investment in the cannabis space and its long-term potential, we were not pleased with Canopy’s recent reported year-end results,” Bill Newlands, CEO of Constellation Brands, said.

“However, we continue to aggressively support Canopy on a more focused, long-term strategy to win markets and form factors that matter while paving a clear path to profitability.”

Linton gained notoriety as the leader of Canopy and a leading voice in the Canadian cannabis market. Canopy’s other co-CEO, Mark Zekulin, assumed sole possession as leading executive until the transition period is completed and a replacement is found.

“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,” Zekulin said in a statement.

Ontario prepares for second round of marijuana retail lottery

Ontario announced that the second stage of its retail lottery will determine the license holder winners for the next 42 cannabis shops in the province. In addition to these new shops, the province will seek to open eight stores on First Nations reserves, which will be determined on a first come, first served basis.

On Wednesday, the Alcohol and Gaming Commission of Ontario (AGCO) informed stakeholders that applications of interest for the new lottery will begin sometime this summer.

Provincial ministers expressed frustration for continued supply issues from licensed cannabis producers.

“While the federal supply issues persist, we cannot in good conscience issue an unlimited number of licences to businesses,” said Ontario attorney general Doug Downey. “A phased-in approach remains necessary.”

Cannabis ETFs gets new stocks during quarterly rebalance

This past week, Horizons ETFs Management (Canada) announced its quarterly rebalance for three of its marijuana ETFs: the Horizons Marijuana Life Sciences Index ETF (TSX:HMMJ), the Horizons US Marijuana Index ETF (NEO:HMUS) and the Horizons Emerging Marijuana Growers Index ETF (NEO:HMJR), adding 10, 11 and 20 stocks respectively.

Steve Hawkins, president and CEO of Horizons ETFs, said that, despite some of the growth HMMJ has seen throughout the year, the marijuana sector has taken a hit lately. “The last quarter was a difficult one for marijuana-sector investors. After more than a 50 (percent) runup in the value of HMMJ, performance in the sector tailed off,” he said.

The ETF executive said he expects to see an increase of firms focused on the US cannabidiol market, added to its funds moving forward.

Horizons ETFs issued an update on the performance of HMMJ, indicating as of the half-way mark of the trading year the ETF had seem a rise of 31 percent in value. As of Friday July 5, the ETF traded at a price of C$18.11, while balancing net assets worth C$834.2 million.

Marijuana exec puts federal government on notice for restrictions

In a wide-ranging interview with BNN-Bloomberg Mike Gorenstein, CEO of Cronos Group (NASDAQ:CRON,TSX:CRON), criticized the Canadian government for its restrictions on marijuana companies and that leading to fall off behind the emerging legal US market.

Gorenstein also threw cold water on the projections of the cannabis edibles and infused market due to the restrictions on marketing and a potential lack of understanding for the amount of demand this new market will warrant in Canada.

“We really think there needs to be some changes to the regulations or we’re not going to be happy with single-serve packaging,” the Cronos executive said.

In June, a group of marijuana stakeholders joined forces with the Canadian Chamber of Commerce to launch a new collective that will seek a voice representing the business interests of the industry, including policy making.

Market updates

On Tuesday (July 2), Canadian cannabis producer Aleafia Health (TSX:ALEF,OTCQX:ALEAF) confirmed that it would begin exporting medical cannabis products to its partner in Australia, after obtaining a clearing permit from Health Canada.

“We continue to prove the international viability of our highly differentiated cannabis health and wellness ecosystem with products, clinic operations, education and distribution,” Julian Fantino, Aleafia Health Chairman, said in the press release.

Aleafia Health’s owns a 10 percent stake in its Australian partner CannaPacific, which is a local licensed producer that will now be tasked with distributing the medical cannabis supply.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

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