In an unexpected development, OrganiGram Holdings' (NASDAQ:OGI) CEO Greg Engel has vacated his position, effective Monday. In its announcement that morning, the Canadian marijuana company said that after "stepping away from his role as CEO," Engel will continue with OrganiGram as a special advisor to its board of directors through a transition period. It did not provide any detail on how long this period might last.
The company did not give a reason or reasons for Engel's departure.
It did say that the board's chairman, Peter Amirault, will essentially serve as interim CEO until a permanent replacement is found. He has served as the chairman since 2017. The board's governance and nominating committee chair Geoff Machum was quoted as saying that Amirault "has deep senior and executive leadership experience in consumer packaged goods and during his tenure he has demonstrated strong governance leadership skills and excellent business acumen."
News of the CEO transition comes less than a month after OrganiGram reported its second-quarter 2021 results, which weren't exactly inspiring. Net revenue fell by a queasy 37% on a year-over-year basis, while the company's net loss deepened by a factor of nearly 10. Granted, the Canadian cannabis market has a host of daunting challenges and few of the company's peers are doing very well; still, the top-line decline and the gushing red ink are worrying developments.
It's not surprising, then, that the man at the top went to meet the ax.
Regardless, OrganiGram shareholders didn't seem to take too kindly to being blindsided by the change. They traded the stock down by 4.7% Monday; by comparison, the S&P 500 index crept up by 0.3%.