When legal cannabis got its start in Canada, you probably didn’t expect a guy who made his name in baby food to run one of the industry’s biggest firms by market cap.
Kurt Schmidt is the new chief executive officer at Cronos Group Inc. (TSX and Nasdaq: CRON), the company said in a statement Thursday. Equipped with decades of executive experience at global brands like Nestlé and Gerber, his hiring mirrors an industry trend of hiring top management from the consumer packaged goods industry.
Despite having over a billion dollars in cash, Cronos has continued to disappoint investors with weak quarterly revenues, steep losses and hefty impairment charges.
Company stock has fallen 29 per cent since the beginning of August, and has lost over 75 per cent of its value since Marlboro maker Altria invested $2.4 billion in the company in March 2019.
Since the company got off the ground in 2016, it’s been led by Ivy League lawyer turned venture capitalist Mike Gorenstein. Under his direction, Cronos famously became the first weed stock to list on the Nasdaq — skyrocketing its valuation to over $5 billion at the time.
“I am thrilled to welcome Kurt to Cronos,” Gorenstein said in the statement. The former chief executive has been leading a search for an experienced consumer-focused executive sharing Cronos’s values to take it to the next level, he says. When he met Kurt, “It was immediately clear that he is uniquely suited to drive the company’s next phase of growth.”
As evidence, Gorenstein — who has been appointed executive chairman — cited Schmidt’s long track record of success in partnering with founders of late-stage start ups to accelerate growth, and his extensive management experience at some of the largest global consumer goods companies.
Schmidt has spent over three decades as an executive at some of the world’s largest CPG businesses.
He was director and CEO of pet food producer Blue Buffalo Company, Ltd. from 2012–2016. Previously, Schmidt was a VP at Nestlé S.A., where he was responsible for Nestlé Nutrition. He joined Nestlé in 2007 as part of its acquisition of Gerber Products from Novartis, where he worked as president and CEO of Gerber Products Company from 2004–2007. Prior to Gerber, he held leadership roles at Kraft Foods, Inc.
Schmidt currently serves on the Campbell Soup Company board.
What Gorenstein and the Cronos team have achieved in such a short period of time is truly impressive, Schmidt says.
“I am passionate about brands and inspired by Cronos’s,” he said in the statement. “Joining as CEO is a unique opportunity to use my work building outstanding brands, high performance teams and results-driven organizations. I look forward to working with Mike, the board and the company’s dedicated employees to propel Cronos Group toward its full potential.”
Top photo by Blythwood via Wikimedia Commons