Supreme Cannabis has elected to move forward without CEO Navdeep Dhaliwal. Instead, its board has placed a former Starbucks executive at the helm of the cannabis company.
In the wake of a CEO dismissal, a Canadian cannabis company has encountered a period of uncertainty for its share price as experts raise questions about the firm’s future.
On Monday (January 6), The Supreme Cannabis Company (TSX:FIRE,OTCQX:SPRWF) announced Navdeep Dhaliwal will no longer act as its CEO and has been replaced by the interim choice of Colin Moore, a director at the company and former president of the Canadian division of Starbucks (NASDAQ:SBUX).
According to Michael La Brier, the board chairman for Supreme Cannabis, the board ultimately elected to appoint Moore because he has “the skills and experience to accelerate our growth and transformation into a leading cannabis (consumer packaged goods) company.”
Shares of the company were thrown off after the change in management was confirmed. On Monday, the firm closed at a price of C$0.61, while during Tuesday’s (January 7) trading session the company had fallen by nearly 5 percent as of 12:05 p.m. EST, resulting in a price per share of C$0.58.
“Greater efficiencies and speed to market will come by rightsizing our production, overhead and capital,” Moore said as he declared the search is now on for the next CEO of the company.
Following the swift change in leadership, an analyst slashed his rating of the company and suggested that Supreme Cannabis may be set for a period of “turbulence.”
John Zamparo, equity research analyst with CIBC Capital Markets, adjusted his price target to C$0.65, down from C$1.25. The analyst criticized the company’s executive turnover in the past, and indicated he is not confident in the guidance issued by the company for its fiscal 2020 year.
“Leadership changes may end up being the right decision, but Mr. Dhaliwal’s significant industry knowledge was an asset that’s now been disposed of, and we see investors left with more questions than answers at this point,” Zamparo wrote.
Dhaliwal became the CEO of the company in September 2018 after his predecessor John Fowler stepped down. During Dhaliwal’s tenure, the company faced a sharp decline of over 70 percent in its valuation.
With Dhaliwal at the helm, the company continued its expansion with projects on the international stage, acquired a fellow publicly traded Canadian marijuana producer for about C$48 million and signed a creative partnership with the cannabis company of rapper Wiz Khalifa.
In a tweet, Fowler showed his support for Moore’s new role at the helm of the company. Fowler left the company entirely in October 2019 after a brief stint as a chief advocacy officer, a role he retained after stepping down as CEO.
— John Fowler (@john_fowler_jd) January 6, 2020
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
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