Jim Cramer sounds off on Canopy Growth Corp

What does Canopy Growth Corp need? Jim Cramer will tell you.

The headlines haven’t exactly been friendly over the past few months to cannabis company Canopy Growth Corp (Canopy Growth Corp Stock Quote, Chart, News TSX:WEED), what with the ousting of its CEO and multiple poor showings on quarterly releases.

That’s why the stock needs a good jolt from some positive press, says CNBC’s Jim Cramer, who argues that hiring an exec from the packaged goods industry as CEO would do it.

Jim Cramer: Canopy Growth Corp needs a CEO, but not just any CEO…

“We need a CEO. If we get a packaged goods CEO the stock would go up, if we get someone who’s kind of humdrum then forget about it,” says Cramer, host of CNBC’s Mad Money on Wednesday.

“[Constellation Brands] needs to buy more stock or the company should do a buyback. Something has to happen that’s good,” Cramer says.

Canopy Growth, the industry-leading pot company from Smiths Falls, Ontario, has been searching for a permanent leader since it fired well-known sector spokesperson and co-CEO Bruce Linton back in July. Linton reportedly came under fire from Canopy’s major investor, Constellation Brands, which last year upped its stake in the pot company to 38 per cent. Sources said that the liquor giant had been growing impatient with Canopy’s seemingly elongated path to profitability.

Canopy’s fiscal fourth quarter came in June with better than expected revenue numbers but growing losses, with Linton saying that the company’s pricy expansion efforts were for long-term prosperity. Shortly thereafter, Constellation delivered its own quarterly financials, with CEO Bill Newlands saying in the earnings call that he was disappointed in Canopy’s earnings so far. Linton was fired less than two weeks later.

Canopy’s losses kept coming, however, with the company’s fiscal first delivered in mid-August. There, Canopy reported net revenue of $90.5 million, up from $25.9 million a year prior, but a net loss of $1.28 billion or $3.70 per share, which included a one-time charge of $1.2 billion related to the expiry of warrants held by Constellation Brands.

Last week, Canopy announced that Constellation’s chief financial officer, David Klein, had been appointed as chair of Canopy’s board of directors, while interim CEO Mark Zekulin (who had been co-CEO with Linton) would be staying on until a replacement is found.

“There is no company better positioned to win in the emerging global cannabis market. I look forward to continuing to work with Canopy Growth’s very talented leadership team to position the company for long-term, industry-leading profitable growth,” Klein said in a press release.

Canopy produced another potential piece of good news in early October with the announcement that it had bought a majority stake in sports drinks and nutrition company BioSteel. The 72 per cent stake (for an unnamed price) comes with a path to full ownership and allows Canopy to enter the sports nutrition space “with a strong and growing brand,” according to Zekulin.

Canopy Growth’s share price was up almost five per cent in trading on Thursday while the stock remains down 25 per cent year-to-date. The sector-wide losses have taken Canopy from a high of $70.89 in late April to its current price of $27.31.