Ever since interim CEO Irwin Simon was appointed Independent Chair of Aphria’s board in December, it was only a matter of time before Simon, the entrepreneurial founder and former CEO of Hain Celestial (NASDAQ:HAIN), would play a more prominent role at the Canadian cannabis company.
Out With the Old
Simon stepped down in June 2018 from his role as CEO of Hain after years of sub-standard shareholder returns and a hard-court press from activist investor Engaged Capital.
Simon owned 1.7% of Hain’s stock, but Engaged has an 11.3% stake, so Engaged’s founder, Glenn Welling, was appointed to Hain’s board in September 2017. Simon remained the chairman of Hain, the same role he now holds at Aphria.
At 60 and in reasonably good health, Simon probably isn’t ready to devote his life to the golf course and retirement.
The resignation of Ripshtein, after Vic Neufeld stepped down as APHA’s CEO in January, is another part of the changing of the guard at Aphria.
I expect the board to soon remove the interim tag from Simon’s current title. The Irwin Simon era at APHA has begun.
The New COO
Ripshtein joined Aphria in May 2018 as its chief commercial officer and was promoted to president six months later, before Simon arrived on the scene. While Simon’s words of thank to Ripshteins in the company’s press release were complimentary, it’s clear by Aphria’s choice for COO that Simon wasn’t comfortable working with Ripshtein, a former CFO of Diageo’s (NYSE:DEO) North American operations and former president of the liquor company’s Canadian operations.
“On behalf of the Board of Directors and Aphria team, we thank Jakob for his contributions to the Company over the past year and wish him well in his future endeavors. He has been instrumental in assembling the incredible team we are fortunate to have today that will carry his responsibilities forward,” Irwin stated in Aphria’s May 14 press release.
The new COO is Jim Meiers, who happens to have come to Aphria after 14 years at Hain Celestial, where he worked alongside Simon. At Hain, Meiers hed several senior executive positions, including president of Celestial Seasonings. Before Hain, he worked at both H.J. Heinz and Kraft Foods.
Meiers’ hiring suggests two things.
First, it’s likely Simon wanted someone he could trust to execute Aphria’s game plan and someone who’s familiar with his style of management. Every change at the top involves a little turnover. I’m sure it wasn’t personal.
Secondly, Meiers’ background suggests that Simon is looking to implement a supply chain which is more appropriate for a food company rather than a medical company. Both, however, require significant oversight, making the appointment a sensible one and positive for Aphria stock.
The Bottom Line on Aphria Stock
The moves announced May 14 are simply part of the ongoing transformation of Aphria from Vic Neufeld’s baby to Irwin Simon’s.
One of two things is going to happen in the coming months.
Either Simon will be appointed the permanent CEO (likely) or Meiers will become the chief executive (less likely but still possible).
Given the spotty performance of Hain stock over the past 15 years, I don’t know if Simon’s rise to power at APHA is, overall, a good thing or a bad thing for the owners of Aphria stock.
At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.