A pair of in-house lawyers with high hopes for legal cannabis products are moving up in the C-suite, while a longtime health and fitness industry legal chief has found a home in the legal weed space.
Leafly Holdings Inc., the world’s largest cannabis website, announced Tuesday its promotion of Yoko Miyashita to replace J. Timothy Leslie as CEO. Miyashita’s elevation came a week after Province Brands of Canada, an agricultural and beverage technology startup that claims to have created a way to make beer from any plant, including cannabis and hemp, promoted chief legal officer Jennifer Dianne Thomas to the company’s top executive position.
The new CEOs take over as cannabis companies seek increased acceptance amid a turbulent regulatory and economic environment.
“Cannabis is America’s newest essential business,” Miyashita said in a statement.
Still, Leafly faces headwinds in its effort to become a leading portal for marijuana information and news. And Province Brands’ plan to disrupt the twin vices of alcohol and marijuana consumption has had its critics.
Other companies like Clever Leaves International Inc., which claims to be the world’s largest hemp and pharmaceutical cannabis producer, are hiring lawyers with public company expertise.
David Kastin, a former general counsel at the Vitamin Shoppe Inc. and gym chain owner Town Sports International Holdings Inc., was announced Wednesday as Clever Leaves’ new top lawyer. The New York-based company agreed to merge in late July with a special purpose acquisition vehicle that plans to make Clever Leaves one of only a few pot stocks to trade on the Nasdaq.
Miyashita, who joined Leafly last year as its first-ever general counsel after serving as the top in-house lawyer at Getty Images Inc., takes over immediately and will work with Leslie during a brief transition period.
Leafly became independent following a spinout last year from cannabis-focused private equity firm Privateer Holdings Inc.
Miyashita was unavailable for comment about her role at Seattle-based company, which was founded in 2010 and has raised almost $15 million in funding, including $3.6 million in May.
Leslie, a former in-house lawyer and executive at Amazon.com Inc., held Leafly’s top leadership role for over a year. He leaves at an uncertain time for the cannabis industry, which amid lingering regulatory questions in the U.S. could see some benefits from the Covid-19 pandemic as users rise and and cash-strapped municipalities seek new ways to generate tax revenue.
Under Leslie’s tenure, Leafly launched a delivery service in partnership with cannabis retailers. The company also shuttered its operations in Germany this year and cut nearly 150 employees in the U.S.—more than 50% of its workforce—after two rounds of layoffs.
Province Brands’ Thomas is a Howard University School of Law graduate and former corporate associate at Jones Day and Schulte Roth & Zabel. She succeeds co-founder and former CEO Michael “Dooma” Wendschuh, an entrepreneur who created the lucrative “Assassin’s Creed” video game franchise.
Wendschuh will remain with Province Brands as an employee and shareholder, the company said.
Thomas was an assistant general counsel at Privateer prior to joining Wendschuh at Province Brands four years ago. She previously also handled pro bono matters for cannabis-focused nonprofits.
During her time in Big Law, Thomas often worked with companies in highly regulated industries. She said that drew her to the cannabis space, which at the time had plenty of litigators heading into it, but few corporate lawyers doing finance and transactional work.
A Strategic Shift
At Province Brands, Thomas takes over a company that’s raised more than $15 million, including $1.6 million in April, most of which she said has gone to research. The company is shifting its focus from research and development to commercialization through licensing agreements with third parties and producing its own branded products.
“This is a big part of my background and mandate as CEO,” said Thomas, now working remotely from the U.S. with travel to Canada difficult due to Covid-19.
Province Brands was co-founded in 2016 by Thomas and Wendschuh, an early investor in the cannabis sector through his backing of Ebbu Inc. The Evergreen, Colo.-based hemp research company was sold for $330 million in 2018 to Canopy Growth Corp.
Ebbu’s business practices and Wendschuh’s bold proclamations were the subject of a June story by cannabis industry trade publication WeedWeek that cast doubt about Province Brands’ technology that turns plant waste products into beer. A 2018 partnership between the company and a Canadian brewer to produce the world’s first beer brewed from cannabis hasn’t hit the market.
Despite those shortfalls, Thomas said Province Brands intends to have its first set of beverages out by the fourth quarter. The company also plans to file for three more patents on its beverage-making technology by 2021. Thomas said her legal background helps Province Brands safeguard its intellectual property and trade secrets, as well as negotiate joint ventures with contract research organizations.
Province Brands is privately held but said one of its largest shareholders is Toronto-based Auxly Cannabis Group Inc., a publicly traded company whose co-founder and CEO is Hugo Alves, a former partner at Canadian law firm Bennett Jones. Alves declined to comment about the CEO switch at Province Brands through a spokesman. Providence Brands declined to disclose its other investors.
The company confirmed its board decided to reduce staff earlier this year. Two lawyers left the company in January, leaving Thomas as its sole in-house counsel. Province Brands said it will “refill” her top legal role “pending additional fundraising.”
Like another Howard graduate who received career-changing news this month, Thomas hopes her promotion heralds a new era for women and lawyers of color, noting the dearth of Black women executives in the cannabis sector and CEO level.
Province Brands’ products appeal to a diverse consumer base, Thomas said, so the Grimsby, Ontario-based company retains advisers committed to diversity. That includes its outside counsel at King & Spalding and Canadian firms McCarthy Tétrault and Borden Ladner Gervais.
Thomas said Jones Day, where she once worked, has been conservative in advising cannabis companies. She said that will change as companies in the industry, an area of interest for U.S. regulators, mature and grow in profitability. While Province Brands cannot sell certain cannabis products in the U.S., it has no restrictions on licensing technology, which Thomas said will fuel future financial success.
Christopher Davis, a fellow former Schulte Roth associate who now heads the International Cannabis Bar Association, said coronavirus economic relief packages removed some of the stigma associated with cannabis companies. Law firms and lawyers are taking notice.
Clever Goes Public
Clever Leaves, founded in 2016, raised $14 million in April to bring its total funding to over $120 million.
Securities filings show that Freshfields Bruckhaus Deringer is advising the company as it prepares to list on the Nasdaq following the completion of its sale later this year to Schultze Special Purpose Acquisition Corp., which is being represented by Greenberg Traurig, Canada’s Stikeman Elliott, and Colombia’s Posse Herrera Ruiz.
Kastin, a former Greenberg Traurig associate, replaces Gina Rebollar as Clever Leaves’ top lawyer. Rebollar, who joined Clever Leaves last year after working in-house at Chubb Ltd., returned to the insurance giant—now coping with its own pandemic-related issues—earlier this month as deputy general counsel for global corporate affairs. She succeeded Christopher Kearns in the position.