Few people do understand the cannabis industry, with its remarkably diverse customers, jury-rigged supply chains, and different regulations in each of hundreds of jurisdictions.
Constellation has said it will probably select a replacement for Linton from its own ranks, though many in the industry expect it to recruit a consumer-products expert from outside the company.
The industry consensus on Linton’s firing is that it resulted from the $74-million loss Canopy reported last month in its most recent quarter. But Constellation insists Linton was not removed because of Canopy’s financial performance. It instead offers the vague explanation that Canopy needs a new leader to guide it through its next growth phase.
That’s a shame, because the old leader had a pretty compelling strategy. At Canopy, Linton was building what Warren Buffett would call a “fortress,” a company so entrenched that it’s almost impossible to compete with. For Buffett, such firms include Coca-Cola Co. and McDonald’s Corp.
But a few days before Linton’s abrupt ouster, Constellation’s new CEO, Bill Newlands, told investors on a conference call that he wanted “a more focused long-term strategy to win markets” at Canopy, “while paving a clear path to profitability.”
There is a backstory here that might tell the real tale of Linton’s curious departure from Canopy.
Fact is, Linton’s days at Canopy were numbered since October, when Constellation announced the planned retirement of its then-CEO, Rob Sands. Sands stepped down March 1, and four months later, Linton was out of a job.
Rob Sands was Linton’s patron.
The Sands family has controlled Constellation for decades. It was Rob Sands who struck the Canopy deal, in order to reduce Constellation’s reliance on the slow-growth liquor business.
But Sands’s successor, Newlands, doesn’t have the Sands family’s patience with upfront losses in building a formidable business. Nor does he have that luxury.
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