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Bruce Linton calls for female leadership at Canopy Growth

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Bruce Linton is still in love with Canopy Growth Corp. (WEED.TO)(CGC)

“She broke up with me. I’m still digging her,” the ousted co-chief executive told Yahoo Finance on Tuesday. He sounds as bullish as ever on the cannabis giant he co-founded, suggesting the recent pull-back on the company’s shares after an earnings miss is a buying opportunity that should not be ignored.

Toronto-listed shares of Canopy Growth Corp.
Toronto-listed shares of Canopy Growth Corp.

Linton was pushed out of the top job at Canopy Growth in July as major stakeholder Constellation Brands Inc. (STZ) publicly voiced its displeasure with the Smiths Falls, Ont.-based cannabis producer’s financial performance.

Canopy Growth has retained a recruiting agency to hunt for new leadership and recently said “several exceptional candidates” have been identified.

Mark Zekulin, who replaced Linton as sole chief executive, is set to step down once a suitable candidate is found. Linton said an ideal replacement would be female with a tech sector background.

“The reason is the cannabis space for a whole bunch of reasons is very male lead, male dominated,” he said. “Tech is about scaling with competent people. And when you think about tech, you don’t think about ‘how do I win in New Jersey and New York.’ You think about how to win globally. And this is what this is about.”

The cannabis sector has faced criticism over its persistent lack of women at the executive level. An analysis by HuffPost Canada found that only 121 of the 573 Canadian cannabis executives, or 21 per cent, were women. That ratio narrows in the boardrooms of the largest licensed producers. A new analysis published by Yahoo Finance on Tuesday also underscored the lack of board-level diversity in the sector compared to Fortune 100 companies.

As for Linton’s next move, a non-compete agreement means he can’t participate in the Canadian cannabis sector. Industry observers have speculated that he will join a U.S. producer, given his experience brokering a cross-border deal between Canopy Growth and Acreage Holdings Inc. (ACRG-U.CN)(ACRGF)

Linton said he plans to narrow his cannabis-related job prospects to four companies with global footprints and exposure to cannabis-based animal care that don’t “trade too quickly.”

“Whatever I go into, I’m not going to sell any stock that I buy or get in the first year,” he said. “It will be U.S.”

Linton, who said he has recently purchased Canopy Growth shares to add to his large position, defended the company’s recent first-quarter performance.

In the three months ended on June 30, Canopy Growth reported a net loss of nearly $1.3 billion, primarily due to a non-cash charge.

The company booked $90.5 million in net revenues, up from $25.9 million a year earlier, before recreational marijuana was legal in Canada. The surge in revenue was offset by a 215 per cent rise in operating expenses to $229.2 million.

“They created a whole bunch of intellectual property, filed a whole bunch of patents, some more shipments [are] going international than ever before, which tells me that they're actually looking long-term and implementing what I think is the right plan,” he said.

Linton added that cannabis shares tend to retreat in August as retail investors pay less attention to their portfolios.

While he hesitated to say that Canopy Growth wanted to get a rough quarter out of the way before bringing on new leadership, he did not deny that was a possibility.

“I don’t know if they did that, but I think it would be prudent to do that,” he said. “I would do that.”

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