Canopy Growth parts ways with two top executives

Marketing leader David Bigioni is among over 800 staff who left the cannabis producer this year as it looks to cut costs.
Bigioni

Amidst a strategic review by Canopy Growth to reduce costs, the licensed cannabis producer has also parted ways with chief commercial officer Dave Bigioni and chief operations officer Andre Fernandez.

Jordan Sinclair, Canopy’s VP of communications, says the company has engaged a search firm to fill the roles. The company did not say who would be handling these duties in the interim.

As CCO, Bigioni was responsible for leading marketing, consumer research, media, events, sales and portfolio strategy, as well as innovation and its learning and development team. He joined as CMO in 2017 after nine years at Molson Coors, and was elevated to the CCO role in 2018.

Fernandez led the company’s operational strategy, primarily focused on building a globally integrated supply chain. He joined the company in 2016, having previously spent two years as an analyst with FCA, and rose through progressively higher logistics and supply chain roles.

Though results at Canopy Growth have been positive, David Klein – who joined Canopy as its new CEO in January – previously said one of his priorities is to reduce cash burn and align its resources. In its most recent quarterly financial release, the company reported a 49% year-over-year growth in net revenue, but a 20% decline in free cash flow.

Throughout the year, the company has conducted a strategic review. In March, it announced a “production optimization plan” for Canada, resulting in the closure of production facilities in Aldergrove and Delta, British Columbia, the cancellation of a new production facility in Niagara-on-the-Lake, Ontario and the elimination of 500 jobs. In mid-April, a further series of changes resulted in the closing of a facility in Yorkton, Saskatchewan, as well as ceasing operations in South Africa, Lesotho and Columbia and ending farming at a New York hemp facility. This resulted in a further 85 jobs being terminated.

Canopy confirmed that it also restructured several departments in Canada, the U.K. and the U.S. at the end of April, resulting in the termination of 200 more positions. The company did not comment on which departments were impacted or restructured, but a source with knowledge of the situation told strategy that it impacted a significant portion of its in-house creative team. A LinkedIn post by Canopy Growth creative director Jessica Hay offering words of support to those that had been terminated featured comments from numerous writers, designers and art directors that had previously been employed by the company.

Sinclair described both Bigioni’s and Fernandez’s departures as decisions that were made “mutually,” though did not specify if they were related to the company’s business review or cost-cutting measures.

In March, Berkeley Poole, VP and creative director for Canopy-owned Tokyo Smoke, also left the company to take on a role as creative director at Toronto creative consultancy Whitman Emorson.

“Although difficult, the decisions that have been made over the last few months are to allow Canopy Growth to remain focused on the areas where we are winning and ensure that we are delivering the highest quality products to our consumers in every market where we operate,” Klein said in a statement. “For a long time Canopy has prioritized doing things first, but going forward we’ll be focused on doing things the best in the markets and in the product formats that show the greatest promise.” He added that more information about “the new vision of the organization” would be shared following its quarterly earnings call on May 29.

Though some signs suggest demand for recreational cannabis has gone up since the pandemic began, many of Canada’s cannabis producers were already in challenging financial positions. The market around weed stocks has normalized after a rush of investment in 2018 and 2019, and other producers  – such as Hexo and Zenabis – have closed production facilities, which producers had previously been in a rush to establish in anticipation of high demand. Because of this, financial analysts have been downgrading their expectations for the industry over the last year; CIBC also recently slashed its predictions for the recreational market in Canada by 26% in 2020 and 25% in 2021, citing the fact that the pandemic would hinder the opening of new stores and discourage new license applications.