During the past trading week (January 6 to 10), the CEO of a large Canadian cannabis company left his role after the company experienced a massive drop in value during his time at the helm.
Two other Canadian marijuana firms looked into dumping some of their operational assets, and a major American deal finally closed after a rocky summer slashed valuations across the sector.
Here’s a closer look at some of the biggest cannabis news over the week.
Supreme cuts CEO, appoints Starbucks exec as replacement
On Monday, (January 6), the company told investors that Dhaliwal will be succeeded in the interim by Colin Moore, director of Supreme and former president of the Canadian branch of Starbucks (NASDAQ:SBUX).
Supreme’s board chairman, Michael La Brier, said in a press release that the firm feels it will benefit from Moore’s leadership experience as it becomes a cannabis consumer packaged goods company.
The leadership shuffle caused CIBC Capital Markets analyst John Zamparo to slash his price target to C$0.65, down from C$1.25, stating investors are “left with more questions than answers at this point.”
The news shift kicked off an unsteady week for Supreme. Since Monday, shares of the company have dipped 17.7 percent in Toronto.
Canadian cannabis firms discard operations
News of Aurora’s move to offload a greenhouse in Exeter, Ontario, was first reported by the Deep Dive after the facility was listed at just under C$17 million on Cushman & Wakefield. Aurora first came into the facility after it acquired MedReleaf in 2018; MedReleaf originally purchased it for C$26 million.
Aurora Vice President of Communications Michelle Lefler told the Investing News Network in an email that the firm took time to evaluate the viability of the facility, but decided “that this non-operational greenhouse would require retrofit and significant capital investment in order to meet Aurora’s production standards.”
Golden Leaf also ditched some of its assets after selling its two Canadian subsidiaries to cannabis company Sensi Brands for a total of C$3.4 million.
Aurora took a hit, falling 12.4 percent in Toronto during the trading week, but Golden Leaf fared better, rising 25 percent to open at a price of C$0.02 on Friday (January 10).
Cresco Labs’ acquisition of Origin House closes
Cresco Labs informed investors of the news on Wednesday (January 8), saying that with the closing of the transaction it has significantly improved its access to the lucrative Californian marijuana market.
The deal represents the better part of a year’s worth of work for the two companies, said Cresco CEO Charlie Bachtell in a statement. The transaction was first announced in April 2019.
With the addition of Origin House’s assets, Cresco will be a leading wholesaler in California, selling into more than 575 dispensaries, the company said.
Marc Lustig, chairman and CEO of Origin House, will now be added to Cresco Labs’ board of directors. In a press release, Lustig said Cresco’s dedication to branding and wholesale distribution aligns well with Origin House’s mandate.
In an effort to “streamline” its leadership structure, beleaguered cannabis firm The Green Organic Dutchman (TGOD) (TSX:TGOD,OTCQX:TGODF) told investors that its president, Csaba Reider, will be leaving the organization. Reider’s duties will now be dealt with by TGOD CEO Brian Athaide.
Mike Gibbons, vice president of sales, is also departing, leaving his work to Robert Gora, vice president of medical commercialization.
“The changes we announce today are part of a comprehensive review of our operations to reduce costs and improve cash flow. This will result in significant G&A savings and a leaner, more efficient organization,” Athaide said in a statement.
Canopy Growth (TSX:WEED,NYSE:CGC) announced that its retail chain, Tokyo Smoke, will be working with 10 Ontario retail license holders to open new stores across the province. Canopy said the stores are set to open in early 2020.
Don’t forget to follow us @INN_Cannabis for real-time news updates!
Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.