Last week, the marijuana industry was in preparation mode. That’s because it was in front of the latest big development in the sector, Cannabis 2.0. This initiative, which sanctions the sale of derivatives such as candies and non-alcoholic beverages in Canada, is going to start in earnest in the coming days — companies aiming to sell such products were required to effectively wait 60 days from the Oct. 17 legalization date.
Not all was preparation and anticipation last week, though. Several other important happenings also crossed the marijuana stock news wire. Let’s take a look.
Image source: Getty Images.
Illinois erases weed convictions
As part of Illinois’ recent legalization of recreational cannabis, in certain cases it is removing marijuana-related offenses from criminal records. Recreational pot becomes legal in the state on Jan. 1.
The office of the State’s Attorney in Cook County, which includes Chicago, announced that it had filed motions in court to vacate over 1,000 minor cannabis convictions. “Minor” in this case means non-violent offenses involving under 30 grams of the drug. This is the first legal action in a process that could many thousands of such offenses on criminal records in the county.
While this is fair and sensible measure, it is actually atypical of states that have gone the recreational legalization route.
That’s good, as it’s yet another sign that recreational cannabis legalization is pushing ahead — if fitfully and in different ways according to how each liberalizing state is enacting such laws. Marijuana stock investors should temper their excitement, though, since, like other states, Illinois will free the recreational weed market only slowly and in rather incremental steps.
Fresh leadership at Canopy Growth…
There are new names at the top of the managerial ranks in the cannabis industry. The most prominent is David Klein, who is taking the CEO job at Canopy Growth (NYSE:CGC). Klein comes to Canopy Growth from its No. 1 shareholder, alcoholic drinks major Constellation Brands (NYSE:STZ), where he serves as CFO. He’s very familiar with the former, as he has been serving as its board chairman since October.
Being CEO at a top cannabis company is a demanding job, so Klein will relinquish his roles as both Constellation CFO and Canopy Growth board chairman when he ascends to the throne on Jan. 14.
Canopy Growth had been led by an interim CEO, Mark Zekulin, since the high-profile departure of Bruce Linton in July. He had been co-CEO with Zekulin.
The hiring of Klein brings in an experienced executive who already knows his company. On top of that, he’s from Constellation, which has taken serious hits to its own results on the fall in Canopy Growth’s stock price. Therefore he’s got quite the incentive and plenty of investor support to clean up the latter’s messy finances, which should be a priority. At this stage, then, Klein’s hiring looks like a beneficial move for Canopy Growth.
…and at Curaleaf
Meanwhile, Curaleaf Holdings (OTC:CURLF) has taken the exceedingly rare step of drafting a veteran of the still-young cannabis industry into the top level of its management. The company hired as its new president Joe Bayern, who had previously served in the same position at California-based yet Canada-listed Indus Holdings. The appointment was effective immediately.
Bayern won’t be running the show at Curaleaf. Instead, he’ll be one rung down the ladder from CEO Joseph Lusardi, to whom he’ll report directly. Before occupying the president’s office at Indus Holdings, Bayern had worked in various executive positions at companies active in the food and beverage sector. Curaleaf cited this consumer goods/marijuana experience as a key reason for his hire.
This stands to reason. Curealeaf’s focus is the retail end of the cannabis business; it’s already relatively strong in this regard, with 51 dispensaries throughout the United States. Hopefully for Curaleaf shareholders, Bayern can leverage his consumer-facing experience to help make the company more dominant in that segment.