C-suite shake-ups have been the emerging theme in the cannabis sector over the last few weeks. Almost everywhere you turn, top level executives and the large and aspiring-to-be-larger marijuana companies are coming and going.
Among the changes: a new CEO at HEXO (NASDAQ:HEXO) (TSX:HEXO) has been announced. Scott Cooper, the former CEO of Truss Beverage, an Ontario-based beverage maker, specializing in cannabis infused drinks, will be taking over the helm of HEXO, confirming the ouster of founder and now former CEO Sebastien St-Louis.
Truss is a relatively new joint venture that was created by HEXO and Molson Coors Brewing (NYSE:TAP) to market adult drinks in the emerging cannabis-infused product sector. HEXO has been making headlines of late, as it has focused on a number of key acquisitions, including the purchase of Redecan, 48Noth Cannabis and Zenabis Global (OTC:ZBISF).
But the move that led to St-Louis’s ousting was made in September, when the company's board of directors received an investor letter demanding the then-CEO resign. The reasoning: HEXO was being over-leveraged to acquire these cannabis companies.According to the terms of the deals, the ownership structure of HEXO shifted, making the disgruntled investor along with the owners of Redecan the largest stakeholders in HEXO.
HEXO's stock has dropped by about 44% over the past year, and about 11% since the letter was submitted to the company's board. In fact, shares have been on a steady decline since April. Yesterday, the stock closed at $1.70 on the NASDAQ, down almost 0.6% on the day.
Cresco Announces Deal To Buy Medical Weed Manufacturer
Officials with Cresco Labs (OTC:CRLBF) (CSE:CL), a US-based marijuana grower and manufacturer of a variety of cannabis products, just announced it has reached a deal to buy an expanding medical weed company, Laurel Harvest Labs.
Laurel Harvest is a vertically integrated medical cannabis grower and manufacturer based in Pennsylvania. The company is active in research into new medical applications for cannabis, and has partnered with Temple University in Philadelphia, which has a leading cannabis research facility.
The purchase deal, reportedly worth $80 million, is expected to close before the end of the current year.
Shares of Cresco Labs have seen modest gains for the cannabis sector in the last 12 months, increasing just over 6.5% during that time. Yesterday, the stock, which trades on the OTC markets in the US, closed at $7.90, down 1.5% on the day.
Cresco Labs reports its latest earnings on Nov. 11, before the opening bell.
Next Up: All Eyes On Canopy Results
On the earnings front, investors in the cannabis sector need to mark Nov. 5 on their calendars. That's when Canopy Growth (NASDAQ:CGC) (TSX:WEED) reports Q2 earnings. The cannabis giant will be releasing results for the period ending Sept. 30, ahead of the open.
Given its size, Canopy earnings often provide an indication of how the overall sector is performing. Its latest earnings will come in the wake of the announcement earlier this month that the Canadian grower has just struck a deal to buy the leading cannabis edible company in North America, the US-based Wana Brands. Investors will be interested to see if company officials release any plans or provide any indication of what they have in store as Canopy ventures deeper into the edibles market.