Sebastian St-Louis, who co-founded HEXO, is stepping down from the CEO role after a shareholder delivered a letter of complaint to the board, reports Yahoo Finance Canada.
‘Misalignment with shareholders’
According to the story, activist shareholder Adam Arviv sent a letter to the board in September which included a number of concerns, such as “recent dilutive financings, the CEO’s misalignment with shareholders, and a lack of basic business skills to lead.”
Arviv is the co-founder of Ohio’s Green Growth Brands and consulting group BRN. He is also closely connected to Redecan, an Ontario-based cultivator which HEXO acquired for $935 million in cash and stock. Since that deal was announced, reporter Jeff Lagerquist noted HEXO’s shares had dropped by 75 per cent.
From Hydropothecary to Hexo
St-Louis and Adam Miron co-founded HEXO, then-called Hydropothecary, in 2013. Under St-Louis’s leadership, HEXO has acquired a number of companies in addition to Redecan, such as Zenabis and 48 North.
Last of the original CEOs
Of Canada’s large cannabis companies, HEXO was the last to still have its original CEO at the helm. (We refer to that original group of CEOs as the Original Stash.) COO Donald Courtney will also be leaving the company. A new CEO is expected to be announced soon.
“Notwithstanding Mr. Arviv’s letter, this was the right time to make this change,” wrote a HEXO spokesperson in an email to Yahoo Finance Canada. “Given HEXO’s recent acquisitions, there is a real opportunity for a new leader to leverage HEXO’s market-leading position to drive growth and profitability.”