Man Standing with several cannabis plants
CEO’s ouster at Canopy Growth highlights growing pains for cannabis industry

San Francisco (CNN Business) – Bruce Linton, founder and co-CEO of Canopy Growth, seemed unfazed last month when his company’s stock sunk after a poor financial showing. Now he’s out of a job.

Linton heralded Canopy’s potential, telling CNN Business last week that his firm — the world’s largest cannabis company — was well-positioned to dominate its emerging industry for years to come. The Canadian cultivator, manufacturer and seller of cannabis products, however, soon would become a company in flux.

On Wednesday, Linton told CNN he was fired. The executive shake-up at Canopy highlights not only the challenges cannabis firms face in trying to meet sky-high expectations, but also the maturation of a long-illicit substance into a legitimate industry.

Canopy (CGC) was ambitiously deploying a multi-billion dollar war chest from alcohol giant Constellation Brands, which invested C$5 billion ($3.78 billion) in the company last year and owns 38% of Canopy stock.

It used the money to pluck up competitors; establish new operations overseas; secure a blockbuster agreement to eventually acquire American cannabis firm Acreage Holdings; invest in medicinal research; and formulate a slew of cannabis beverages, chocolates and vaporizers.

The company was playing the long game: It takes time for Cannabis markets to scale, for products to be developed, for research to be conducted, and for nations’ laws to change.

However, while looking far ahead, Canopy failed to deliver in the near-term and meet expectations set by its investors, especially its multi-billion dollar benefactor.

“[Linton] is a casualty of the growth in the industry,” said Richard M. Batenburg III, who heads investor relations for Cliintel Capital Management, a Denver-based institutional investment firm focused in cannabis. “You need a multi-billion dollar CEO to manage that process.”

Linton told CNN on Wednesday he had fallen out of favor with the company’s board, which now includes four directors installed by Constellation. Canopy co-CEO Mark Zekulin, who is serving as interim CEO, will step down when the company secures a new chief executive officer, a Canopy spokeswoman told CNN Business.

Canopy lost C$670 million and reported revenue of C$226.3 million for its fiscal year. The losses — attributed in part to lackluster sales in Canopy’s home country of Canada as well as high stock option expenses — were far wider than analysts had expected.

“This is a longer-term industry,” said Bethany Gomez, managing director of Brightfield Group, a Chicago-based firm that researches and analyzes the cannabis industry. “I think there are some revelations that are happening about the true viability and scalability of the Canadian market in general.”

There was much ado from investors when, in October 2018, Canada became the second nation in the world to legalize cannabis for adult recreational use. Valuations skyrockected for Canadian licensed operators like Canopy that had the public capital to quickly build market share in a potentially booming industry. However, during the past nine months, sales in the country did not match the hype.

Canada recorded C$356 million in cannabis sales from October 2018 through April 2019, according to data from Statistics Canada, the nation’s statistical agency. Those figures are trending well below analyst and market research reports, some that included projections that Canada could have billions in recreational sales right out of the gate.

Canada’s roll-out was intentionally restrained. The government wanted to take a cautious and thoughtful approach to the process, Gomez said, noting how the products were limited mostly to smokable cannabis, seeds, plants and oils.

As such, Canada’s recreational cannabis market does not resemble the adult-use states on the other side of its southern border. Recreational cannabis stores in places like Colorado and California offer cannabis in different forms well beyond the customary “flower,” or bud.

That will change later this year when Canada allows for more consumables — beverages, edibles and vaporized products — to be sold commercially where they are allowed. Canopy has invested heavily for that day, funneling dollars and hours into creating cannabis-infused drinks and chocolates and acquiring companies with deep intellectual property and research portfolios.

Linton told CNN Business last week that he believed Canopy’s products, including brands such as Tweed, could become the industry standard and sold at the world’s largest retailers. Believing in the potential of Canada’s export market and the emergence of medical cannabis industries overseas, Canopy expanded far and wide, establishing operations in more than a dozen countries.

Canopy has been more aggressive than its peers in acquiring other firms. It’s also been more in the public eye thanks to Linton, an eccentric personality who’s hyped about Canopy’s potential, Gomez said.

Linton’s departure might not necessarily signal that Canopy Growth will shift its approach, said Kris Inton, a Morningstar analyst who covers Canopy Growth and other publicly traded cannabis companies.

“In my view, it’s probably not going to change their strategic direction,” he said. “It’s not going to change any of their opportunities.”

Canopy Growth’s management overhaul could indicate the evolution of a more disciplined financial understanding of cannabis companies, especially in the publicly traded sphere, said William “Beau” Wrigley, Jr., who heads Atlanta-based cannabis firm Surterra Wellness.

Wrigley expects to see traditional players along the lines of Constellation Brands continue to acquire and invest in cannabis firms, but with a more critical eye on the management background and financial and operational history.

“This does not in any way impact the potential of [cannabis],” Wrigley said. “This business, in terms of valuations, needs some recalibration.”

Man showing two women something by pointing at a computer screen
How to Score an Internship in the Marijuana Job Market

Summer is a busy season for internships — and the cannabis industry is no exception. As the business of marijuana continues to boom, new jobs are being created and internships are a great way to get a foot in the door with a cannabis-related company.

“We want to tap into a talent pool that has fresh ideas and isn’t jaded by previous experiences,” said Squire Velves of High There, a social media network for cannabis users that’s actively offering internships.

Traditionally, interns trade menial office work for college credit and on-the-job experience. However, in a changing political and legal climate, internships are now more frequently offered as paid positions that serve as the first rung on a ladder to possible full-time employment.

As can be expected in the vibrant category of cannabis, demand for internships is higher than ever.

It’s a highly competitive job market, but internships can lay the groundwork for professionals ready to lead the cannabis industry into the future. So applicants need to be at the top of their game.

”If you’re involved in cannabis, you have to live your life with a tremendous amount of truth and conviction,” said Rick Batenburg of Cliintel Capital Management Group. “To do what you say you can do and believe that cannabis will be more legal tomorrow than it is today.”

The evolving landscape of the cannabis job market means that internships are more diversified than ever. We put together a list of the top positions currently being offered this summer. Get your resume together now. Most of these are expected to be filled quickly.

Weed and Technology Internship — High There!

Venice, California

High There! is a social network designed for cannabis users to connect — available as an app for iPhone and Android with about 600,000 registered users. The company behind it is currently seeking interns for its office in Venice, California. This isn’t a throwaway gig for filing papers or going on coffee runs. High There! wants candidates with serious knowledge of data analytics, market research, and community engagement.

Pay is to be determined. You don’t have to be in school to apply for the internship, which has the potential to eventually lead to a full-time position with the company. As High There! continues to grow, more internships are expected to be offered in a variety of departments, so check back often.

“There are different verticals within the company,” said Velves. “There’s a technology team, analytics team, marketing team, sales team, and design team. We’re interested in fresh new talent in all sectors.”

To learn more, contact High There! through the contact form on the company’s website.

Weed and Investment Internship — Cliintel Captial Managment Group

Denver, Colorado

As a venture capital firm holding about $125 million in assets, Cliintel Capital Management Group in Denver is looking for a very specific candidate for its internships. It has to be someone with a technical understanding of finance, capital markets, and the risk tolerance for investing.

“We’re looking for motivated, financially experienced individuals coming out of either financial programs at the grad school level or at the graduate level,” said Chief Investment Officer and owner Rick Batenburg.

About 80% of the firm’s assets are in the cannabis industry, but this isn’t a position for someone trying to figure themselves out and get a foothold in the marijuana business. “This is not an internship that’s going to be heavy-cannabis,” Batenburg said. “It’s definitely heavy venture capital. We deal in cannabis because it’s the emerging market right now. We deal in cannabis because we’re in Colorado and it has the most growth potential.”

Batenburg said the firm takes a “dispassionate” and “agnostic” view of cannabis — “which is important because people make bad decisions with money when they’re passionate about merger-and-aquistion decisions.”

That’s not to say the job is without perks. (“We get a lot of free weed and CBD,” Batenburg said.) Dining out at expensive restaurants is also part of the deal. “We go to where people have the money,” Batenburg explained. “We spend our time in nice places with interesting, eclectic, smart people.”

But expect to put in long hours and hard work with research, data compilation, documentation, evaluating and processing deals, and due diligence. “We have no set hours of any kind. We work all the time. This is not for the faint of heart.”

Ready for the challenge? Those interested can inquire about the internship by emailing Monica Pina. Batenburg says he’ll take zero or five interns at any given time, depending on whether they offer value. The internship is paid, but the wage is to be determined. “If they’re going to be venture capitalists, they better be ready to negotiate.”

Weed and Brand Management Internship — Mattio Communications

New York, New York

For those eager to bring brands to life, Mattio Communcationsis a public relations and marketing company that specializes in cannabis. Founded by Rosie Mattio, the firm is offering a summer internship as a paid position that could potentially lead to full-time work.

“We’re interested in smart people who want to learn about the industry, want to contribute, and can keep up in a fast-paced office,” said Talent Acquisition Leader Regina Rear-Connor.

If accepted, expect to wear a lot of hats. An intern will mix fun activities, such as coordinating with influencers or managing events, to less glamorous work including filing papers or going to the post office. Along the way, interns will learn about search engine optimization (SEO) and search engine marketing (SEM) strategies — in other words, how to rank high on Google.

“Being a small agile team, we all do whatever it takes to get the job done and make sure our clients are serviced and happy,” Rears-Connor said. “The interns will be the same.”

Those clients cover all corners of the cannabis business: vapes, prerolls, flower, and modern products such as medical patches or even peanut butter treats for dogs. The Mattio Communications office is in an upbeat shared workspace that encourages social interaction. Although the New York public relations industry is known for its cutthroat nature, Mattio stresses an environment in which collaboration and mentoring are key, and talented people are supportive of one another.

For more information about the internship, email Rears-Connor said, “It’s a great opportunity to dip your toes in the water and see if this is an industry for you.”

Weed and Business Services Internship — Springbig

Boca Raton, Florida

Springbig in Boca Raton, Florida, about 45 miles (72 kilometers) north of Miami, has been using interns for years in marketing, service, and sales. “We’ve had great success with interns,” said Vice President of Marketing Natalie Shaul. “Basically every intern we’ve had has either stayed here to be full-time or keeps coming back each summer until they can be full time.”

The company specializes in customer relationship management (CRM) for cannabis dispensaries. Software is used to develop loyalty rewards programs, organize sales data, and maintain customer engagement through text messages and other interactive services.

Interns at Springbig are encouraged to try a little bit of everything and gravitate toward duties that interest their natural curiosity. Development, client services, sales, marketing, account management, human resources, finance — it’s all fair game with nothing set in stone.

Candidates don’t have to be in school, but Springbig prefers interns who are “college age.” The internship is paid and class credit is available. Scheduling is flexible, but regular hours are typically 9 a.m. to 6 p.m. Perks include yoga classes in the office, as well as luncheons and other group outings. When applying for an internship, expect the unexpected. Personality counts more than a loaded resume.

“We’re really big on charisma,” Shaul said.

Learn more about the internship program by emailing Springbig

More Cannabis Industry Internships Opportunities

Acreage Holdings is looking for an intern for its eight-week summer program in New York City. The position is paid and open to students enrolled in an accredited college or university. For more information and to apply, visit Acreage’s careers page.

Cresco Labs in Chicago is taking applications for a summer internship. It runs from June to August 2019 and offers wide exposure to sales, marketing, and other departments. Pay is $15 per hour and the position is open to students with a minimum grade point average (GPA) of 3.0 or higher. For more information and to apply, visit Cresco Labs’ careers page.

Green Thumb Industries is offering a “career immersion” alternative to the traditional summer internship, with exposure to the production, sales, and marketing of cannabis. Two applicants will be selected for the paid 8-10 week program in Chicago. For more information and to apply, visit Green Thumb Industries’ internship posting.

MondoMeds is seeking a social media intern for three months during summer 2019 in Venice, California. Pay is $150 a month. For more information and to apply, visit MondoMeds’ listing.

Cannabis Plants Growing In a Room
What the Cannabis Industry Can Do to Go ‘Green’

With massive energy and water use, as well as the use of pesticides and plastics, sustainability issues are a mounting problem facing the cannabis industry. But there are innovators — cultivators, executives, city governments, and innovative entrepreneurs, among others — trying to fix these issues.

“We all know the cannabis industry hasn’t been good stewards of the environment in the past for a whole bunch of reasons,” said Erik Williams, the chief operations officer of Canna Provisions Inc., a cannabis company about to launch two dispensaries in Holyoke and Lee, Massachusetts. “One is having to re-create the sun indoors and another is the opaque packaging and the over-packaging that comes with regulations.”

These are the major sustainability issues facing the cannabis industry, and how the industry is addressing each.

Reducing Energy Use and Costs

Indoor cannabis production takes a lot of energy. A standard grow facility uses 10 times the amount of electricity per square foot as a regular office building of the same size. This is due to the many needs of a grow operation such as high-intensity lights, fans, heating, cooling, water pumps, and CO2 injection systems, according to the Southwest Energy Efficiency Project. While indoor farming requires a lot of energy in general, there are added problems for cannabis manufacturers due to heavy regulations. One example are the security precautions that require growers to maintain cameras and store video footage. “With security compliance keeping backup data on a hundred or so cameras for 90 days or 6 months, that is, in and of itself, a massive energy cost,” Williams said.

In general, the states that adopted cannabis legalization early on were less focused on energy use and more concerned with safety and security issues. Colorado had no sustainability guidelines when Tom Stevenson, CEO of Bonsai Cultivation, began plans on the company’s 28,000-square-foot wholesale recreational cannabis operation in Denver in 2014. So the company relied on its own “internal sustainability thinking” and used recirculating water chillers that uses cooled water to air condition the facility, reducing energy needs by about 30%. Bonsai Cultivation also reduced its light-to-plant ratio resulting in installing about 400 fewer lights than a standard grow would need without sacrificing the needs of the plants. An additional 40% in power savings didn’t hurt, either.

With little guidance from state governments on sustainability issues in the cannabis industry, cities and counties have been stepping in. The Cannabis Sustainability Work Group, launched in 2016 under the auspices of Denver’s Department of Public Health & Environment (DDPHE), provides guidance on cannabis sustainability issues through meetings, workshops, and a cannabis environmental best-practices guide. It also co-hosts an annual Cannabis Sustainability Symposium, the only conference in the U.S. dedicated to sustainability education for the cannabis industry, according to adviser Emily Backus.

Certifiably Green Denver, another DDPHE program, provides Denver cannabis businesses with free expert advice on finding opportunities to save money and conserve resources for water, waste, energy, transportation and business management, said Backus.

And now that cannabis legalization has continued to spread throughout the U.S., states looking to legalize recreational cannabis are taking lessons from early adopters.

Cannabis is a Water Intensive Crop. Water Conservation Can Help Reduce Overall Use

According to the U.S. Government Accountability Office, 40 states expect to see freshwater shortages by 2024. Some of those states allow production of cannabis, a notoriously water-intensive crop. Indoor growing tends to be much more water-efficient compared with outdoor grows that can waste water through runoff and evaporation — but indoor growers can still be wasteful.

Brandy Keen is the co-founder and senior technical adviser of Surna Inc., a manufacturer of water-efficient indoor cultivation equipment and a cultivation consultant. She recommends installing a condensate reclamation system. The system can capture the water in the air inside the grow room for reuse. It can end up saving thousands of gallons of water and hundreds on a grower’s water bill.

Other water conservation practices include growing aeroponically or hydroponically — water-conserving methods that don’t require soil — and giving cannabis plants small waterings throughout the day, which help to limit runoff and evaporation, as opposed to one big watering.

Pesticides and Fungicides Can Be Reduced Through ‘Organic’ Farming Methods

Among the problems with pesticides and fungicides in the cannabis industry are the surreptitious use of unapproved chemicals. Another area of concern is the as-yet-unanswered question of what exactly happens when certain chemicals, even those approved for food crops, are burned and inhaled by consumers.

Because of gaps in testing regulations in state legislatures, inconsistent lab practices, and in some cases the lack of pesticide testing at all, myriad pesticide-related issues have dogged cultivators and lab testing facilities in California, Colorado, Oregon, and Washington, such as the use of myclobutanil-based Eagle 20, a fungicide typically used in grape growing that when heated, releases the toxic gas hydrogen cyanide.

But these issues are being met head-on through more rigorous testing, additional regulations being implemented in the mature markets, and better rules being set in the new markets, according to Stevenson. His company grows using natural pesticides approved for organic farming (although cannabis products can’t actually be labeled organic since certification a federally managed program). Some growers are moving towards more natural pest-fighting compounds, such as neem oil.

Plastics, Plastics, and More Plastics

The main issue of plastics in packaging revolves around state requirements on child safety and labeling, which often necessitates companies rely on single-use plastic child-proof bottles and oversized containers to fulfill labeling requirements. These items often end up in landfills.

“The amount of single-use plastic that’s being created by the cannabis industry and the types of plastics that are being used is a massive problem,” said Ron Basak-Smith, Co-Founder and CEO of Colorado-based Sana Packaging. “I don’t think we even realize what we’ve created with the rules around this industry.”

Basak-Smith and his partner are hoping to take on the industry’s plastic problem. Sana Packaging is manufacturing hemp-based containers that are industry-compliant. The company also manufactures in the U.S. to cut down on environmental issues associated with transportation and potential labor abuses overseas.

Rather than regulators, it often comes down to the cannabis companies themselves to take the initiative regarding sustainability. CannAmerica, which owns a portfolio of cannabis brands in Colorado, Nevada, and Maryland, was able to use less plastic and cardboard and reduce transportation inefficiencies while shipping the same amount of infused gummies by switching from hard plastic containers to Mylar packaging.

“It’s worth it for companies to take the time to think about sustainability because you can find efficiencies that are good for the environment and also help the bottom line,” said Diana Anglin, CannAmerica’s Director of Licensee Alignment and Operations.

Sustainability can also help a cannabis company’s bottom line. Along with cutting down energy and water consumption and charging higher prices for sustainably grown products, companies can also tout being green. Williams believes that educated consumers can influence the industry to produce products equitably, efficiently and in environmentally sound ways by voting with their dollars. That education has to come from the cannabis companies themselves.

“We not only want to lead by example but want to create a newly educated consumer who is demanding these things anywhere they buy their cannabis,” Williams said. “You can do really well doing a lot of good.”

Women Vaping a Vape Pen filled with Cannabis
Denver Dispensaries Expect Huge 4/20 Sales. Here’s What Will Be in Store.

As the U.S. eagerly watches the April 20 sales story of 2019 unfold, Colorado is still the undisputed leader in holiday weed tourism.

In 2018, Colorado saw a 128% increase on sales on 4/20 compared with the typical Friday, Marijuana Business Daily reported. Sales in the state spiked higher than California at 102% and Nevada at 106%. Washington, though, saw a slight dip, reporting at 97%.

Dispensary storefronts and brands are preparing to exceed 2018’s numbers by a long shot.

Here’s what Denver companies are doing to prep for the weed store madness.

Must Stock up on Vapes

Seth Wiggins, Chief Revenue Officer of The Clear, a concentrates company on shelves in Colorado, California, Washington, and Oregon, said his company prepares inventory about 45 days in advance of this date.

“Every year, it seems to get a little more exciting. We prepare with a buffer beyond what we think that growth will be to ensure we have an ample product supply for our customers,” Wiggins said.

Looking at 2019, The Clear is expecting sales to exceed a normal retail day by as much as 150%. The Clear will be delivering concentrates to retailers to the very last minute to match this demand.

“We’ve gotten at least a dozen emergency phone calls today [April 18, 2019] asking, ‘Can you get us more product?’ ” Wiggins said. “I’ve employed every single person in the office to do hot-shot runs. Stores are already running out.”

April 20 demands a “better safe than sorry” mentality when it comes to stocking up on supplies across states.

“We certainly expect to see the biggest lift here in Colorado,” Wiggins said, “but we prepare in a similar fashion across the board.”

Which products are top of mind?, “Cartridges and disposables are the most popular this time of the year,” Wiggins said. “It’s the convenience.”

The largest cannabis chains in The Clear’s network — Livwell, Maggies Farms, Native Roots — began planning and stocking inventory for 4/20 as early as January 1, 2019.

Wiggins’ parting advice for business owners? “Plan early and often, the thing about planning is, always have a plan C. Because it’s going to change.”

‘This is Cannabis Christmas and we are the North Pole.’

Dispensary owners see the holiday from a different and equally busy vantage point. On the ground on 4/20, Simply Pure founder and CEO Wanda James is Mrs. Claus.

“This is cannabis Christmas and we are the North Pole,” James said as she worked on last-minute preparations for the store to open its doors in Denver’s Highland neighborhood.

“It takes over a month to stock the shop and get everything packaged with prerolls, eighths, quarters, and ounces. We work hard to get all the advertising just right, which we planned way back in January with the designers,” James said.

Simply Pure’s marketing efforts are creative and reach into as many avenues as possible, reserving its presence in the 4/20 media frenzy with articles, email blasts, even TV appearances.

This year, Simply Pure co-owner, veteran, Denver City Council candidate and cannabis chef Scott Durrah will be promoting the store in a very on-brand way — competing on Viceland’s premiere episode of “Bong Appétit Season 3 Chef Challenge.”

For a small-business owner, James said exposure on social media is key. James explained that the in-store pop-ups with brands that are meant to engage customers both in person and in pixel.

“Our product partners have claimed their day in the store and created promotions with us exclusively,” she said.

The retailer has a working relationship with the surrounding neighborhood, the backdrop which plays its own role in the holiday. Partnering with local restaurants and bars helps to position the shop as a destination location. “We have worked with the surrounding businesses to cross promote them and the specials we do as a ‘hood,’” James explained.

Simply Pure also takes an all-hands-on-deck mentality to staffing the space.

“Our Budologists are always on point, however, they have no vacation days during this week. Everyone is technically working or on call,” James said.

Judging by the expression on the face of this staff member, they don’t mind.

Scientist experimenting cannabis
Cliintel Capital Management takes on Cannapharmarx, predicts revenues of C$25M

Cliintel Capital Management Group LLC Founding Partner Rick Batenburg III tells Proactive Investors that the private equity firm specializing in incubating cannabis companies, has taken on Canadian-based Cannapharmarx Inc (OTCMKTS:CPMD), saying the fund found the cannabis company attractive due to its ability to grow at large, industrial scale.

Batenburg says, in addition, the company has stabilized its energy cost by using an on-site power plant and using natural gas, and he expects the company to produce 110,000 kg of cannabis per year, expecting the company to pull in over C$25 million in 2019.