The Canadian cannabis industry is growing faster than ever. Almost everywhere you go, you can see people enjoying cannabis, whether through hitting the water pipe or sparking up some rolling papers. In the three years since Justin Trudeau signed off on legislation to establish a recreational market, dispensaries have grown in prominence across the country, and producers have found themselves in more competition.
The rise in competition and low sales in the past year has led to some changes in one of Canada’s leading cannabis companies. Canopy Growth announced changes to their senior management team just a few short weeks after telling stakeholders that they do not expect to be profitable in 2021. Canopy’s Chief Product Officer Rade Kovacev and Chief Financial Officer Mike Lee will be making their departure from the company come Dec. 31st. However, the Smith Falls, ON-based company didn’t elaborate why.
“These decisions reflect management and the board’s vision for building a best-in-class organization that is well-positioned to deliver long-term growth and shareholder value,” CEO David Klein told MJBizDaily in a statement. “We appreciate Mike and Rade’s contributions to advancing Canopy Growth to our position as a cannabis industry leader.”
Kovacev and Lee aren’t the only ones at a top position who’ve announced their exit from Canopy Growth. After six years, Phil Shaer, the former Chief Legal Officer, left the company in October. Similar to the company’s CPO and CFO, there was no explanation for Shaer stepping down from his position.
Canopy Growth has already introduced the interim chief product officer and chief financial officer. Judy Hong, former Chief of Staff & VP, Investor Relations & Competitive Intelligence, was appointed as the interim CPO. Tara Rozalowsky, former vice president of beverages and edibles, will serve as the interim CFO.
The numerous changes within the company’s higher-ups are a telling sign that Canopy aims to reclaim its spot atop the cannabis industry, especially as more states have pushed for cannabis reform. Canopy Growth currently only holds less than 10% of the Canadian market. It’s similar to other companies that are beginning to see craft growers overtake the market.
Canopy Growth hasn’t necessarily witnessed immense growth in its cannabis revenue in the past two years. In the quarter ending on Sept. 30th, 2020, Canopy Growth’s net revenue sat at $92.3M, while the following year, their net revenue increased by $3M. Their second-quarter fiscal summary revealed that net earnings declined by 13% outside the acquired businesses, and the cannabis revenue declined by 14%.
Still, with the new changes and incoming staff, Canopy is showing promising signs of growth ahead. Their fiscal report indicated that operations in the United States have accelerated, including BioSteel beverages and Martha Stewart CBD, with expectations for increased distributions in Spring 2022.