Hexo is turning to a familiar face to lead the company’s next phase of growth after co-founder and former CEO Sebastien St-Louis abruptly departed the cannabis firm earlier this week.
The Ottawa pot producer Wednesday named Scott Cooper its new president and chief executive effective immediately.
A 25-year veteran of the food and beverage industry who previously held senior executive roles at Sobeys and Molson Coors, Cooper is no stranger to Hexo’s operations. He joins the firm after a stint as president and CEO of Truss Beverage Co., a joint venture between Hexo and Molson Coors that launched in 2018.
Hexo says Cooper will continue to lead both companies for up to six months “to ensure a smooth transition.”
In a statement, Hexo chairman Dr. Michael Munzar said Cooper’s more than two decades of experience and his success in overseeing the launch of Truss’s cannabis-infused beverage portfolio make him the right candidate to “defend Hexo’s position as a market leader in Canada and secure our place as a top-three global cannabis products company.”
A Hexo spokesperson said Cooper was not available for comment Wednesday. In a statement, he thanked St-Louis for “his tremendous effort in establishing growth,” adding he’s looking forward to building on the company’s “strong foundation” as it embarks on an ambitious U.S. and European expansion bid.
Cooper’s hiring comes just two days after Hexo announced that St-Louis – who spearheaded a string of acquisitions and partnerships with corporate giants in his bid to build the “Coca-Cola of Cannabis” – was leaving the company in a major shakeup that also saw the firm’s chief operating officer Donald Courtney resign.
Valuable U.S. experience
While Cooper has a long and varied background in the Canadian food and beverage industry, he also spent time in Colorado as Molson Coors’ chief innovation officer from 2016-20 – giving him a familiarity with the U.S. market that could serve him well as Hexo ramps up its presence south of the border.
Hexo has recently moved to strengthen its U.S. foothold so it’s ready to compete in the event the country federally legalizes cannabis, acquiring a 50,000-square-foot cannabis production facility in northern Colorado this summer.
While Hexo vaulted into the No. 1 spot among Canadian cannabis producers following a series of acquisitions in 2021, it’s been a tumultuous year for the Ottawa company.
Hexo’s share price has dropped by more than 50 per cent since the beginning of January as the firm has been criticized for issuing too many shares and diluting existing shareholders.
According to a Yahoo! Finance report, activist shareholder Adam Arviv blasted St-Louis’ leadership in a Sept. 26 letter to the board, citing “recent dilutive financings, the CEO’s misalignment with shareholders, and a lack of basic business skills to lead.”
Over the past two and a half years, Hexo’s total number of listed shares has tripled, with each new offering diluting the value of existing shares.
Last year, the firm was forced to consolidate its shares on the NYSE after they fell below $1 and no longer met the exchange’s listing standards. The company shifted to the Nasdaq exchange this summer in what was billed partly as a cost-cutting move.
Hexo shares rallied Tuesday in the wake of St-Louis’ departure, rising 24 cents on the Nasdaq and 30 cents on the Toronto Stock Exchange, before falling back.
Its shares closed at $1.84 on the Nasdaq Wednesday, down 10 cents on the day, and finished down 16 cents to $2.24 on the TSX.