“Canopy Growth sits at the forefront of one of the most exciting new market opportunities in our lifetime,” said Klein. “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.”
The company said that Klein has served in a number of senior leadership capacities over the past 14 years at Constellation Brands. His background includes extensive CPG and beverage alcohol industry experience, strong financial orientation, and experience operating in highly regulated markets in the U.S., Canada, Mexico and Europe. However, Klein has zero experience in the cannabis industry.
Interim CEO Mark Zekulin will be stepping down from his role and resigning his seat on the Board of Directors of Canopy effective December 20, 2019. As a founding employee of Canopy Growth (then Tweed Marijuana Inc.), Mark was instrumental in building Canopy into what it is today first in the role of President, then President and Co-CEO, and finally as CEO.
“It has been an incredible six years at Canopy Growth, and I have witnessed the team and Company grow from five people in an abandoned chocolate factory to thousands of people across five continents,” said Zekulin. “Canopy today is positioned to win with the resources, infrastructure, team, and award-winning culture needed to succeed. It has truly been an honor to be part of building a unique, Canadian success story like Canopy, and I look forward to seeing the Company continue to evolve and grow under David’s leadership.”
Canopy’s original CEO Bruce Linton was ousted within a year of the Constellation Brands investment. Since that time, the company has floundered as the company took a restructuring charge of $32.7 million for returns, return provisions and pricing allowances primarily related to its softgel & oil portfolio in the second quarter. Canopy also has recorded an inventory charge of $15.9 million to align the portfolio with its new strategy. The company said that the new strategy included new retail pricing architecture, a rationalized package assortment, and a focused marketing/educational strategy to further develop this category.
While Klein is listed as an experienced strategist with the ability to build a consumer brand while leveraging operational scale across a dispersed production footprint, there was no indication with regards to his knowledge of cannabis other than his having served on the Canopy Growth Board of Directors for over a year and is presently Canopy Growth’s Board Chair.