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Cronos Group has become the latest Canadian cannabis company to shake up its top ranks, replacing former CEO Mike Gorenstein with experienced consumer packaged goods executive Kurt Schmidt.
The announcement comes just one day after major Canadian producer Aurora Cannabis announced its new CEO.
Schmidt’s appointment was the result of a year-long search for “an experienced consumer focused executive who shares the company’s values and can help take us to the next level,” Gorenstein said in a press release issued Wednesday morning.
Gorenstein has been appointed executive chairman of Cronos’ board of directors.
Schmidt’s CPG experience includes leadership roles at pet food producer Blue Buffalo Company, as well as Nestlé, Gerber and Kraft Foods.
In a note to clients Wednesday morning, Jefferies analyst Owen Bennett said he continues to “have (his) doubts around the long term value creation of the Cronos strategy, (but) today’s announcement is certainly a positive with regards to its ability to execute on it.”
Toronto-based Cronos Group reported a loss for the quarter ended June 30, with net revenue of $9.9 million.
The company wrote down $3.1 million of cannabis in Canada during the quarter, and said it expects further write-downs in the future.
However, Cronos remains flush with liquidity, with more than $1.1 billion of cash and cash equivalents and almost $214 million in short-term investments on hand at the end the last quarter.
“(Given) the highly acquisitive nature of companies where Schmidt had held executive positions before, we can also expect him to be well placed to put Cronos’s… cash pile to use effectively,” wrote Bennett.
Cronos trades as CRON on the Toronto Stock Exchange and the Nasdaq.
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