The move has caught investors by surprise.
After the markets closed on Wednesday, AYR Wellness Inc. (CSE: AYR.A, OTCQX: AYRWF) announced that David Goubert was stepping down as President and Chief Executive Officer. Goubert served as President from October 12, 2022 and Chief Executive Officer from February 13, 2023.
The Board told investors it has approved the appointment of Steven M. Cohen as Interim Chief Executive Officer effective immediately. Cohen previously served as an outside legal advisor to the company but otherwise has zero cannabis experience. It’s worth noting that Goubert also had no cannabis experience before becoming the company’s CEO in October 2022 when he replaced founder Jonathan Sandelman. The Board said in a statement that it will embark on a search for a permanent CEO in due course.
The move was met with surprise on social media as many comments questioned what had happened for such a sudden move. Goubert was seen as a CEO who had made positive changes to the company in a relatively short period. It’s considered highly unusual to issue a late-night press release with no succession plan causing speculation about what prompted the hasty exit.
Recent earnings
The company’s recent earnings announcement provided no clues. Ayr Wellness reported its second-quarter earnings in August with revenue dipping slightly. The company had managed to get its expenses down but net losses grew to $38 million in the quarter versus last year’s net loss of $29 million. The company blamed the increase in net losses on higher income taxes and an increase in interest expense due to the terms of the debt extension and new debts.
At the time, Goubert said the company was positioned to return to growth in the second half of 2024. The company was already benefiting from Ohio’s strong launch for adult-use sales and is poised to gain if Florida and Pennsylvania legalize adult-use cannabis.
No cannabis for Cohen
The interim CEO, Cohen has no experience in cannabis. He is the founding member of Blue Raven LLP, a legal advisory firm focused on providing strategic advice to businesses, corporate boards and executives as well as providing outside General Counsel services. Before forming Blue Raven LLP, Cohen was General Counsel and Chief Administrative Officer for MacAndrews & Forbes Inc.
According to his online biography, he represented numerous individuals and corporations in connection with investigations and prosecutions conducted by the U.S. Department of Justice, the U.S. Securities and Exchange Commission, the New York State Attorney General, the National Association of Securities Dealers, the New York Stock Exchange, and the Manhattan District Attorney’s Office. His wide-ranging civil practice routinely included civil litigation involving claims against officers and directors of publicly traded entities.
He also spearheaded the successful effort to gain the release of two men wrongfully convicted of the 1990 Palladium nightclub murder. In 2011 Cohen served as Secretary to New York Governor Andrew M. Cuomo.
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