Canopy Growth Corporation (TSX:WEED) (NYSE:CGC) has had quite a mixed trajectory over the last six months. Beginning on July 3 with the ousting of Canopy’s CEO Bruce Linton, the leading cannabis company has struggled to find its footing.
Now, nearly half a year later, Canopy Growth has finally replaced Linton. News broke today that David Klein will be the company’s new Chief Executive Officer as of January 14.
“This is big, breaking news,” says Rich. “The entire sector is talking about this today. Most pot stocks are in the green on the news that Canopy has a new CEO.”
What’s to Know About the New CEO
Prior to this appointment, Klein served in a number of senior leadership capacities at Constellation Brands (NYSE:STZ).
Constellations Brands is a Fortune 500 company and one of the largest beer companies in the US. It’s also, of course, an influential stakeholder in Canopy.
After placing a $5 billion investment into Canopy Growth, Constellation was reportedly displeased with Canopy’s $323.4 million CAD net loss in Q4. This led to CEO Bruce Linton being forced out, and co-founder Mark Zekulin serving as interim CEO.
Now, Constellation Brand’s Executive Vice President and Chief Financial Officer is stepping in as a more permanent replacement. In a press release, Klein said:
“Thanks to the efforts of Mark and the entire team at Canopy Growth, no company is better positioned to win in the emerging cannabis market. I look forward to working with the team to build on the foundation that has been laid, to develop brands that strongly resonate with consumers, and to capture the market opportunity before us. Together we will drive sustainable, industry-leading growth that benefits employees, shareholders and the communities in which we operate.”
Klein will step down from all his other positions.
WEED in the Green
Canopy Growth stock shot up from $24.72 at the close of markets on Friday to $28.23 this morning. That’s an increase of more than 14%.
According to the Canadian Marijuana Index, the industry as a whole saw similar growth this morning. Nearly all of the major pot stocks are in the green as a hint of optimism returns to the cannabis sector.
“There a few decliners, but overall we’re seeing a lot of green,” says Rich. “Some people think this will continue, but others think it’s just a one day price action based on the news.”
Canopy’s growth falls in line with Rich’s prediction that the company would be one of the top pot stocks to watch in 2019. While Rich was forecasting this growth for November, the news of David Klein’s ascension to the role of CEO was just a little late.
Canopy Growth’s Plans for 2020
With 2020 on the horizon, Canopy is looking to recapture its former glory. Despite the recent increase in value, WEED is still down nearly 30% from the start of the year.
Last week, the company unveiled its Cannabis 2.0 portfolio. Investors don’t have to wait much longer to see how cannabis edibles will affect the sector, and Canopy is making sure it’s in a position to capitalize.
“While I wouldn’t recommend you chase green, I do think the upside on CGC is tremendous,” says Rich.
What do you think? Is this the beginning of a big run-up for Canopy Growth? Or will WEED fall back to its earlier prices tomorrow? Let us know your thoughts.
Featured image: Canva