3 Cannabis Stock CEOs Who May Lose Their Jobs

Pot stock appraisals have actually plunged, and these CEOs could pay the price for this underperformance.

Sean Williams

For a very long time, cannabis investors might relatively do no incorrect. Prior to April 2019, the huge majority of pot stocks had actually rallied by a triple-digit or quadruple-digit percentage, with the expectation that continuous legalizations throughout The United States and Canada and around the globe would move black-market transactions into legal channels over time.

However, this hasn’t shown to be the case

But it’s not simply pot stock investors that need to be concerned with the underperformance of the cannabis industry. A variety of marijuana stock CEOs seem on the hot seat and in risk of losing their jobs if things do not reverse soon.

An illuminated exit sign above a doorway.

Image source: Getty Images.

Numerous pot stock CEOs have already stepped down or been revealed the door

If you believe I’m being a bit overdramatic, think once again.

The pressure likewise appeared to get the better of Terry Cubicle, the now-former CEO of Aurora Marijuana( NYSE: ACB) Despite the fact that Cubicle stepped down and retired(i.e., wasn’t fired), the writing seemed on the wall that he ‘d be revealed the door if he hadn’t voluntarily retired. At one time pegged as the world’s prominent legal pot producer, Aurora has actually stopped building and construction at 2 of its largest facilities and sold off a 1-million-square-foot greenhouse. Furthermore, in spite of having access to two dozen markets outside of Canada, Aurora’s global sales have been reasonably anemic. With share-based dilution squashing shareholders, Cubicle looked like a likely candidate on the slicing block going into 2020.

Even Aphria‘s ( NASDAQ: APHA) long time CEO Vic Neufeld stepped down in January 2019 Though Neufeld cited health and household factors for his departure, the statement that he would leave came simply five weeks after a short-seller report declared wrongdoing at Aphria. In spite of much of these accusations being proved inaccurate, it was shown that Neufeld held a dispute of interest in Aphria’s Latin American acquisition. Had Neufeld not stepped down in January, he would likely have been pressured to do so months later.

A cannabis leaf laid within the outline of Canadian flag's red maple, with joints and a cannabis bud next to the flag.

Image source: Getty Images.

These cannabis stock CEOs may lose their jobs next

If we’ve found out anything about the marijuana space over the previous year, it’s that the time for promises is over. It’s set up or stopped talking time for these businesses, and considerable underperformance will just not be tolerated by financiers for any considerable length of time. With that being said, the following 3 pot stock CEOs may be next on the chopping block.

HEXO CEO: Sebastien St-Louis

In my view, the likeliest CEO to get the boot is Sebastien St-Louis, who leads Quebec-based HEXO( NYSE: HEXO)

By the 2nd quarter of 2019, HEXO looked to be on track as a significant Canadian gamer.

Yet, one year later, HEXO has actually made plans to close and offer the Niagara center acquired from Newstrike, and has actually written down the large bulk of that offer. St-Louis has likewise overseen layoffs to save capital, and has idled a few of the company’s growing area at Gatineau.

However what might be most damning of all is commentary from St-Louis throughout a teleconference with experts in 2015 that suggested HEXO would require to make 20%market share in Canada to become profitable. That’s an outrageous task given that HEXO is selling its stock to raise capital and halting a few of its production to minimize costs.

A person holding a vial of cannabinoid-rich liquid in front of a flowering cannabis plant.

Image source: Getty Images.

Cronos Group CEO: Michael Gorenstein

Another cannabis stock CEO that need to consider himself on the hot seat is Cronos Group‘s ( NASDAQ: CRON) Michael Gorenstein.

On the surface, Gorenstein deserves a lot of credit for helping to nab Cronos an equity financier. For those who might remember, Altria Group became a 45%equity holder in Cronos in March2019 In return, Cronos got $1.8 billion, which was perfect given that the business just had a little more than $20 million in cash on hand prior to the deal closing. The expectation was that Cronos would utilize this cash to enter brand-new markets and broaden its line of high-margin derivatives. Investors have actually been sorely dissatisfied because March 2019.

Though Cronos did acquire Redwood Holdings for $300 million to add the Lord Jones brand name of cannabidiol (CBD) beauty items to its portfolio, the buzz surrounding CBD items in the U.S. has waned in a big way. With the U.S. Food and Drug Administration putting its foot down on CBD as an additive to food and beverages, CBD sales have not been turning heads.

What’s more, Cronos Group’s average production from Peace Naturals resulted in only a little more than $8 million in very first quarter sales.

A person holding cannabis leaves in front of a globe of the Earth.

Image source: Getty Images.

Tilray CEO: Brendan Kennedy

Lastly, Tilray( NASDAQ: TLRY) CEO Brendan Kennedy should consider himself on a short leash with the financial investment community.

Kennedy seemed steering Tilray toward greatness in2018 The business had its going public in July 2018 and quickly skyrocketed from its market price of $17 to as much as $300 on an intraday basis in September 2018 Entering 2019 with more than $500 million in money and a widely known medical marijuana brand, Tilray was anticipated to have little concern providing for investors.

Then, in March 2019, Kennedy announced plans to de-emphasize financial investments in Canada in favor of the United States and Europe.

Without a clearly specified operating strategy, and the business likewise getting blindsided by weak U.S. CBD sales, Kennedy seems the scapegoat for Tilray’s underperformance.

Sean Williams has no position in any of the stocks discussed.”>

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