CGC stock is leading the broader cannabis sector higher this morning after Canopy Growth (TSX:WEED) (NYSE:CGC) said that Constellation Brands' (NYSE:STZ) CFO David Klein will take over leadership of the company as of January 14.
Big News For Canopy Growth
While the existing troubles with the cannabis industry have had a major impact on Canopy Growth, it should be noted that there have also been plenty of internal turmoils within the company for the past few months. Canopy is one of the largest cannabis companies in the world, and today, the company announced that the current finance chief of Constellation Brands, David Klein, is going to take over as the Chief Executive Officer of the Canadian firm.
Constellation, which is the maker of Corona beer, has made a huge bet on Canopy Growth and the cannabis industry. It has invested $4 billion into the firm, and the appointment of Klein will further consolidate its hold over Canopy.
There has been a fair bit of turmoil at the executive level at Canopy Growth, which remains the biggest company in the industry at this point. Back in July, Constellation and the board removed founder Bruce Linton from the CEO position.
At the time of writing, CGC stock is up 12.71% at $21.02 on the NYSE.
Mark Zekulin took over as Canopy's CEO on an interim business, but now Klein will be replacing him. It should be noted that Klein had been appointed as the Chairman of Canopy Growth after the company had recorded an alarming $450 million loss. Hence, he would not be a completely new face.
Back in November, the company released its financial results for the fiscal second quarter for 2020, which proved to be a disappointment yet again. While the company’s expenses soared, the losses widened further, and the stock slumped to its lowest levels in two years after the announcement. Analysts had estimated core losses of $92.9 million CAD, but Canopy Growth ended up posting losses of as much as $155.75 million CAD.
The company stated that the primary reason behind its massive losses was its spiraling expenses, which rose by as much as 48.2%. The loss per share of the period stood at $0.96 CAD, which was a lot higher than analysts’ estimates of $0.40 CAD.
CGC stock has lost about 60% from its 52-week high of $52.74.
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