The Canadian co-founder of Tweed Marijuana Inc grew that enterprise into the largest commercial cannabis company in the world in Canopy Growth Corporation.
There are challenges, however, to being from Canada.
“Name one company that started in Canada and is still dominant by staying in Canada,” he asks. “Not one. Canada is a good place to be from. Canada was the first and led in an orderly way. It’s a good place to validate the science. It’s a good place to raise capital.”
The challenge comes from our relatively small population – 37 million Canadians just won’t support a major enterprise long term. So, in 2017 when Constellation Brands mused publicly about getting into the cannabis sector, Linton and his partner made the call, ultimately selling 19.9 percent of the company for $500 million. The next year, Constellation paid another $5 billion to purchase another 17 percent of the company. Then in 2019, Linton found himself restructured out of his role as CEO of the company he built.
‘I can now confirm that there are some strings attached for getting $500 million for a six-and-a-half-year-old company,” he notes with a wry chuckle.
With his experience in building a leading cannabis corporation, Linton is uniquely positioned to discuss the state of the industry today and in the future. Linton will be participating in a Fireside Chat with Tony Chapman at his year’s O’Cannabiz Conference and Expo. Linton’s presentation – provocatively titled “What I’ve Learned” – kicks off day two of the conference, Wednesday, October 28th, and promises to discuss what the industry is doing wrong, and what they could be doing right.
Among the topics on which Linton is likely comment includes the divergent motivations of companies trading in traditional consumer packaged goods and the growth company mindset of a cannabis company.
“Those companies have different ways of looking at accounting,” he explained. “A consumer company wants their investment to have dividends and stability. A growth company – like Google or Apple or a cannabis company – worries about how to make ourselves more dominant in the marketplace. If you’re a pot company you need to own everything. It’s not wrong or bad. The choice is, do you want to keep control.”
Furthermore, Linton views the cannabis market not as split between recreational and medicinal, but as united with different sectors. He also decries what he describes as an “institutional bias” against cannabis companies when raising capital is concerned. He points out that a cannabis producer is unique in that it blends input from the agricultural sector, scientific extraction and two significant markets for the finished product.
“I don’t know if there’s another company on the market with that kind of dynamic,” he notes.
Asked about Canada’s future in the cannabis marketplace, Linton waxes philosophical. When raising capital, for example, he notes that potential investors are only interested in what you have that is new and innovative.
“Do you have a different product for a clinical outcome,” he asks, pointing to the use of cannabis in veterinary medicine as an example. “The sophistication of the market is changing, but that’s a good thing. You need to be in the game to know what’s going on. The next generation often comes from the people who created the first generation. That’s because they have the information advantage from being in the market. Those with the information advantage have better access to capital.”
With that framework, Linton notes that Canada can lead the world in the development of intellectual property, technical research and, especially, in the regulatory framework.
“If you have the best regulations you have to bring people to see those so they can copy them,” he said, noting this is a way to iron out the uneven regulatory situations around the globe. “There should be trade commissioners and high commissioners mandate to bring people in to see those. Every academic and medical institution should be audited based on what they generated as intellectual property.
“You’re going to export ideas and intellectual property,” he continued. “But you need institutional alignment.
The O’Cannabiz Conference and Expo runs October 27-29, 2020 at the International Centre in Toronto, and Linton’s appearance builds on his personal commitment to talk up the industry to the best of his ability, something he’s been doing since he started.
“What I was trying to do for the industry every time I spoke to the media was I tried to think about the 73-year-old grandmother who thinks pot is bad because it’s going to cause her grandson to ruin his life,” he explained. “I wasn’t trying to sell anything to anyone. But I still think it had a material effect on people’s perception of the product.”