Green Growth Brands (CSE: GGB) announced its CEO is stepping down and the embattled cannabis company would temporarily close all U.S. mall kiosks in response to the COVID-19 pandemic.
As chief executive, Peter Horvath led Green Growth’s takeover bid for Canadian producer Aphria Inc. (TSX: APHA) last year in a bid to become a world-leading cannabis company.
But the company announced late Thursday that Horvath will no longer serve as CEO or as a member of the board of directors.
The firm said its current chief operating officer, Randy Whitaker, will take over as interim CEO, effective immediately. And the vacancy on the company’s board of directors will be filled in due course.
Shares of Green Growth dropped 17 per cent on Friday, down to $0.75 on the Canadian Securities Exchange.
Green Growth’s CBD struggles
The Ohio-based company has been going through a rough patch.
Last month, Green Growth announced the sale of its CBD business to The BRN Group Inc. — a privately-held cannabis brand distribution company. The sale includes the company’s U.S. network of 195 mall kiosks that sell various CBD-infused beauty products, oral drops and gummies under its Seventh Sense and Green Lily brands.
The company said it expects to hold up to a 20 per cent interest in the CBD business following completion of the sale transaction. However, it also said the sale will include a ‘stalking horse agreement’ which allows it to shop around until the end of March for a better offer.
Horvath led Green Growth since January 2019, and helped seal CBD distribution deals with large U.S. retailers like American Eagle Outfitters, DSW shoe stores, and Abercrombie & Fitch under his leadership.
“I am humbled to have worked with such amazing professionals along this journey. Among those individuals is Randy Whitaker, whom I am pleased has been named as interim CEO,” Hovath said in statement.
“The company will be in good hands with such a seasoned operator at the helm, and I have full confidence in Randy to lead the company during this difficult time.”
Green Growth’s strategies for COVID-19 pandemic
While the company continues to pursue the sale of its CBD business, it said that it will temporarily shut down the mall kiosks in an effort to stop the spread of COVID-19.
In connection with the shutdown, Green Growth said it will also suspend sales on its CBD online platform.
However, the company announced it will keep its Nevada-based cannabis dispensaries open during the pandemic.
While Nevada state authorities declared a 30-day shutdown on Wednesday of all non-essential services, the state allowed cannabis businesses to stay open.
Top image via Green Growth Brands