Cannabis Weekly Round-Up: CEO Stats Revealed, Canopy Results Disappoint

In the marijuana market this week, a new report revealed stats on cannabis executive salaries, quantifying the management changes that have punctuated the industry over the last year or so. 

Meanwhile, a major name in the space released disappointing quarterly results, and a company that has become a cautionary tale for industry participants got a bit of positive news.

Read on for a closer look at some of the biggest cannabis news over the last five days.

Cannabis CEO salary stats revealed in new report

Cannabis market participants have likely noticed the high turnover rate for executives in the space in the last year or so. In a new report, executive search firm Bedford Consulting Group crunches the numbers, noting that 35 percent of cannabis company CEOs were replaced in 2019.

The report, which focuses on executive and board compensation in the North American cannabis industry, also states that total CEO compensation was C$1.7 million for companies with market caps of over C$1 billion. For those with market caps under C$100 million, the amount was C$226,250. 

Brendan Kennedy of Tilray (NASDAQ:TLRY) pulled in the highest total compensation last year at over C$31 million; most of it (97 percent) was equity compensation. 

Click here to skip to the Investing News Network’s overview of Bedford’s cannabis report.  

Among other points, the report notes that 41 percent of the cannabis CEOs researched by Bedford had termination without cause agreements, while 33 percent had change of control arrangements in place.

Most termination without cause deals stipulated 12 months of salary and zero months of bonus; for changes of control the most common setup was 24 months of salary plus 24 months of bonus.

The report from Bedford includes data from 96 cannabis companies listed on TSX, TSXV, CSE, NYSE, NASDAQ and ASX. Information was collected on 449 board members and 437 cannabis industry executives, including CFOs and COOs in addition to CEOs. For context, Bedford compares figures in the cannabis space with stats from both the dietary supplements and food and beverage industries.

Canopy disappoints with latest quarterly results

Canopy Growth (TSX:WEED,NYSE:CGC) is the latest major cannabis company to share its most recent quarterly results. It released the Q4 and full-year report for its 2020 fiscal year on Friday (May 29).

According to the company, its net revenue came in at C$107.9 million for the quarter, down 13 percent from its third fiscal quarter, but up 15 percent from the year-ago period. Canopy also reported a net loss for the quarter of C$1.3 billion and an adjusted EBITDA loss of C$102 million.

BNN Bloomberg states that analysts had been expecting a net loss of about C$222 million, with revenue expected to rise about 5 percent from the prior quarter to C$128.9 million.

The reaction to Canopy’s results was quick, with the company opening at C$23.50 on the TSX on Friday — that’s compared to Thursday’s (May 28) close of C$30.57. Canopy ended Friday at C$24.21.

Canopy is one of many cannabis companies that has embarked on a turnaround recently, with CEO David Klein announcing a major strategic shift in April.

The company was in the news earlier this month when alcoholic beverage company Constellation Brands (NYSE:STZ) exercised warrants to purchase common shares of Canopy; its stake in the company now stands at 38.6 percent. Some market watchers saw it as a vote of confidence for Canopy.

Troubled CannTrust gets Pelham licenses back

Beleaguered marijuana company CannTrust Holdings got some good news this week when Health Canada reinstated the licenses for its Fenwick Perpetual Harvest Facility in Ontario’s Pelham area.

According to the company, it has been working for months to address regulatory deficiencies at the facility and was able to complete remediation activities on February 14.

CannTrust has been on a long and difficult journey since midway through last year, when Health Canada discovered that it was growing marijuana in unlicensed rooms at the Fenwick facility.

More turmoil for the company developed after CEO Peter Aceto was fired, and after additional illegal growing was discovered at CannTrust’s facility in Vaughan, Ontario. Recently, the company has received creditor protection and been delisted from both the TSX and NYSE.

According to CannTrust’s Friday release, operations will now start back up at Fenwick, but because it is still waiting for its Vaughan facility license to be reinstated, the company does not know when its products will hit the market again. CannTrust made its license reinstatement submission for the Vaughan facility later than the one for the Fenwick facility.

The company also said in the release that it “remains without meaningful revenues and has terminated or laid-off a significant portion of its workforce.”

Cannabis company news

• Aphria (TSX:APHA,NYSE:APHA) announced plans to transfer from the NYSE to the NASDAQ on June 5 after market close. It will begin trading on the NASDAQ on June 8.

• In a corporate update, Canopy Rivers (TSX:RIV,OTC Pink:CNPOF) announced a number of measures designed to “optimize its organizational structure, streamline operations, and preserve and maximize cash-on.” It plans to reduce its operating costs by at least 35 percent.

• Cresco Labs (CSE:CL,OTCQX:CRLBF) shared its latest quarterly results, reporting revenue of US$66.4 million, up 60 percent from the previous quarter. The company also achieved its fourth quarter in a row of positive adjusted EBITDA, with the amount coming in at US$3.2 million.

• TerrAscend (CSE:TER,OTCQX:TRSSF) also released its results for the most recent quarter, saying that its net sales increased 139 percent year-on-year to reach C$34.8 million. It reported adjusted EBITDA of C$4.9 million; CEO and Executive Chairman Jason Ackerman described reaching a positive adjusted EBITDA number as a “transformational milestone” for the company. TerrAscend also announced the closure of an oversubscribed US$37 million non-brokered private placement.

• The Green Organic Dutchman Holdings’ (TSX:TGOD,OTCQX:TGODF) latest quarterly results came out as well, with revenue clocking in at $3.06 million, a rise of 27 percent from the year-ago period. According to the company, it is on track to be cash flow positive later this year, and has made “significant progress” on executing its strategic plan, which was announced last October.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.