To help expand its national footprint, multistate marijuana company Vireo Health International has hired Bruce Linton, one of the biggest names in the cannabis industry and former leader of Canada’s Canopy Growth until his surprise firing in the summer.
It’s a high-profile hire for the U.S. cannabis industry, one that many executives and investors across the nation will no doubt be watching closely to see whether it works out as planned.
Minneapolis-based Vireo said Thursday it had appointed Linton as its executive chair.
His marching orders: “Spearhead the company’s strategic decisionmaking, capital markets activity and future partnerships,” according to a news release.
Vireo CEO Kyle Kingsley told Marijuana Business Daily?that he wasted no time in contacting Linton after the latter’s sudden firing from Ontario-based Canopy?in early July.
“I suspended any personal appropriateness and texted him immediately,” Kingsley said. The two met in Ontario quickly thereafter.
“It was a compelling day,” Linton said in an interview with?MJBizDaily.
Investors signal their approval
Investors gave an initial thumbs-up to Vireo’s decision to hire Linton.
The company’s stock, which trades on the Canadian Securities Exchange as?VREO, closed up around 15%. Trading volume exploded to a record, with more than 4 million shares trading hands.
How the Linton appointment will work going forward remains to be seen, analysts said, even as Linton’s track record is strong when it comes to raising money.
“Bruce was extremely effective at communicating and building excitement around the long-term story for Canopy – and for the broader legal cannabis industry,” said Andrew Kessner, an equity analyst at New York-based William O’Neil.
“But it will be interesting to see if his style of salesmanship will resonate in an environment where investors are increasingly focused on companies’ near-term financial viability and path to profitability.”
Vireo, which has a footprint that expands across 10 states and Puerto Rico, has made no secret of its interest in further M&A opportunities, and Linton could go a long way in helping the company achieve that growth, Kingsley said.
Linton, for his part, said he likes the intellectual property Vireo has and the states in which the company is currently working.
In its most recent quarterly results, the company noted it is generating revenue in six of those states – Arizona, Maryland, Minnesota, New Mexico, New York and Pennsylvania.
“I felt I could bring in value, felt they were a more interesting move than a much larger ship,” Linton said.
“We want to find a big fat funnel of people looking to be acquired, and we want to make our picks.”
Asked about the slowing capital raise environment and how it might affect such a strategy, Linton said he is unconcerned.
“I really like (the cannabis business environment) right now because it makes me feel five times younger,” he said. “We don’t want to do it in the same dumb way, and I see prices as very advantageous.
“There are a huge number of family offices out there who want to be in this, and this is a longer-term bet.”
Vireo likes Linton’s entrepreneurial background
Vireo will lean on Linton for his entrepreneurial experience both inside and outside of the cannabis industry, said Kingsley, a former physician.
“I think the division of labor is pretty obvious,” he added. “Kyle Kingsley working the capital markets would not be readily transparent, but I think it’s also fair to assume that I have greater medical expertise.”
Linton said he will not have a regular office at Vireo headquarters but will join regular calls with board members and management to help the company effect its growth strategy.
“I am here to help him, this is Kyle’s company,” Linton said.
Nick Thomas can be reached at?[email protected]
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