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April 29, 2019, 6:42 a.m. EDT

Canopy Growth’s quiet co-CEO on the pot company’s ambitions in the U.S. and more

In rare interview, Mark Zekulin discusses how Canopy’s deal with Constellation Brands helped in recent purchase of Acreage Holdings warrants

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By Max A. Cherney


Canopy Growth Corp.
Canopy Growth Corp. co-CEOs Mark Zekulin, left, and Bruce Linton have “a good divide-and-conquer” setup, Zekulin told MarketWatch.

SMITHS FALLS, Ontario — Canopy Growth Corp. co-Chief Executive Bruce Linton rarely declines an opportunity to talk with the news media, often making dozens of appearances in a day.

His co-CEO, Mark Zekulin, is exactly the opposite.

“Somebody has to get all the attention, and somebody has to do all the work,” Zekulin jokes.

Educated at Cambridge University, the one-time political operative in Ontario who was trained as an attorney is charged with running the nuts and bolts of Canopy Growth’s /zigman2/quotes/200603886/composite CGC +14.16%   /zigman2/quotes/202205609/delayed CA:WEED +13.96%  now-sprawling operations. At Canopy Growth’s headquarters in the small town of Smiths Falls, Ontario, MarketWatch sat down with Zeuklin for a wide-ranging interview this week on the company’s work with Constellation Brands Inc. /zigman2/quotes/207737284/composite STZ -1.30%  , its priorities for operations and its deal to acquire the right to buy U.S. cannabis operator Acreage Holdings Inc. /zigman2/quotes/205165963/delayed ACRGF +5.31%  in the future.

This interview has been edited for clarity and length.

MarketWatch: How do you and Bruce Linton divide responsibilities?

Zekulin: I think there’s a high level of “what’s the vision, what’s the strategy,” and I think that’s a joint exercise. Then there’s the outward-facing items, there’s obviously a need to raise a lot of money in the sector and therefore in doing that there’s a need to speak with the media, the stakeholders, the funds and so on. Bruce is taking on a lot of that work.

And in turn, If you look at the organizational chart of Canopy Growth, most of the functions at the company run through me. So that’s the day-to-day of getting licenses here, and that product sold over there, so whatever that is falls to me.

It’s a good divide-and-conquer. We’re frankly very lucky. The sector is moving so fast, there’s so much to do that both of those things are full-time jobs. And we’re fortunate to have a system set up where we can achieve them both.

MW: What are your top three operational objectives for Canopy Growth right now?

Zekulin: One I would call the Canadian established business. In any other sector there are still a thousand variables, but for cannabis, the Canadian structure is as close to an established market as you have. We have a sophisticated operation that is scaling rapidly and that has to work — it is the core of our business and it has to make money, it has to continue to scale, automation has to improve, customers have to get the product they want. It’s a huge undertaking.

Part two is what I’m calling intellectual property and products. In the Canadian context, we have the Oct. 17 launch of edibles and all the new products we can launch and introduce in the world. That’s a huge piece. Just to make the intellectual property to make the right drink, to make the right vape pen — it’s back to that scale of building freight lines that can transport the products and the scale to build them.

One of the other pieces is international expansion. There are markets around the world that are all opening up. They are mostly medical versus recreational. There is building the people infrastructure, the physical infrastructure which have to grow to produce and sell products there.

I think the days where it’s all about the press release about the latest license wherever are over. You know you need a license, that’s the starting point. But that’s sort of table stakes. Right now it’s about, “do you have the teams in the regions, do you have the relationships, do you know what level of GMP certification?”

MW: Many in the sector say your deal with Constellation Brands was a landmark. What are some concrete steps in terms of operations that its expertise has contributed to?

/zigman2/quotes/200603886/composite
US : U.S.: NYSE
$ 21.29
+2.64 +14.16%
Volume: 19.18M
Dec. 9, 2019 6:30p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$7.42 billion
Rev. per Employee
$115,039
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/zigman2/quotes/202205609/delayed
CA : Canada: Toronto
$ 28.17
+3.45 +13.96%
Volume: 6.44M
Dec. 9, 2019 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$9.82 billion
Rev. per Employee
$150,142
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/zigman2/quotes/207737284/composite
US : U.S.: NYSE
$ 181.27
-2.38 -1.30%
Volume: 1.31M
Dec. 9, 2019 6:30p
P/E Ratio
47.00
Dividend Yield
1.65%
Market Cap
$34.32 billion
Rev. per Employee
$842,260
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/zigman2/quotes/205165963/delayed
US : U.S.: OTC
$ 5.55
+0.28 +5.31%
Volume: 353,571
Dec. 9, 2019 3:59p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$369.97 million
Rev. per Employee
N/A
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