Canopy Growth names veteran Constellation executive David Klein as new CEO

Marco Green
December 10, 2019

The author holds no licenses. As a result, revenue has not lived up to expectations and most companies continue to post heavy losses.

Klein now serves as the executive vice president and chief financial officer for Constellation Brands, the alcohol firm that now owns a significant stake in the cannabis giant. As it turns out, this partnership is finally starting to bear fruit. On October 17, 2019 - as part of Cannabis Legalization 2.0 - a range of cannabis products became legal in Canada.

Canopy Growth's medical division, Spectrum Therapeutics is proudly dedicated to educating healthcare practitioners, conducting robust clinical research, and furthering the public's understanding of cannabis, and has devoted millions of dollars toward cutting edge, commercializable research and IP development.

The company's portfolio of products for Cannabis 2.0 will include chocolates, vape cartridges and pens and distilled cannabis drinks.

About Constellation Brands Constellation Brands (NYSE: STZ and STZ.B), a Fortune 500® company, is a leading worldwide producer and marketer of beer, wine and spirits with operations in the U.S., Mexico, New Zealand, and Italy.

The Canadian cannabis stock Canopy Growth has been in a transition period ever since last summer. Those drinks will contain 2.5 mg of THC per 355 mL can.

Back in November, the company released its financial results for the fiscal second quarter for 2020, which proved to be a disappointment yet again. Since its founding in 1945, Constellation's ability to see, meet and stay ahead of shifting consumer preferences and trends across total beverage alcohol has fueled our success and made us one of the top growth contributors in beverage alcohol in the U.S. First, Canopy acquired the cash to pursue its growth efforts. The most recent round of earnings reports reflects this. During the six months period that ended on September 30, the company's sales and marketing expenses were about 109 million Canadian dollars, an 86% year over year increase, while its research and development expenses were a little over CA$20 million, a whopping 650% increase compared to the year-ago period. "Positive views (are) likely to be taken around implications for greater financial focus and commitment from Constellation Brands, though also negatives around potential lack of external appetite for the role, and the likelihood of a heavy focus on an unproven beverage category", he wrote.

This is an interesting turn of events for Canopy Growth, and investors are reacting favorably to the news. An ETF tracking Cannabis stocks has lost more than half its value since then. For instance, Truss Beverage Co., which is a joint venture between pot grower HEXO and beverage maker Molson Coors, is also launching its suite of cannabis-infused drinks, including several flavors of CBD-infused water each with 10 mg of CBD.

Alliance Global Partners rates Canopy stock as neutral.

Other reports by Click Lancashire

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