Mark de Souza is out as CEO of Revolution Global, a Chicago-based and privately-held vertically-integrated cannabis company with operations in Illinois, Florida, Maryland, and Arkansas.
“The Revolution Global board and Mark mutually decided to make this change, and the company has established a search committee to identify his successor,” Revolution said in a written statement to Grown In.
Until a new CEO is named, Revolution COO Dusty Shroyer and CFO Tripp Murray “will lead the company.”
High on the task list for Revolution leadership is to reconcile a capital conundrum that it articulated in a Cook County Circuit Court complaint filed earlier this month.
On October 22, Revolution sued Freehold Properties, a Las Vegas-based cannabis-focused real estate investment company for $3 million. In October 2019, Revolution, through a sale-leaseback agreement, was to secure close to $29 million in capital to fund a 75,000 square-foot indoor cultivation facility in Delevan, Illinois. This construction was to be an expansion of an existing 75,000 square-foot facility Revolution has been operating on the same property.
After paying $5.5 million, the suit claims Freehold stopped its payments to Revolution in March after construction had begun. Further construction has been “delayed indefinitely” as a result. Revolution is seeking damages to cover costs while disclosing a lien filed by its construction company and notice of default by its landlord. Freehold has not replied to requests from Grown In to speak about the lawsuit.
While investor capital is returning to privately-held cannabis companies with significant cultivation, processing, and retail operations in states such as Illinois where licenses are limited and owners benefit from restricted competition, Revolution currently does not have the funding to complete the Delevan construction. Investors queried by Grown In in recent months noted that while Revolution has attractive assets and licenses distributed across multiple states, there were concerns about the company’s financial liabilities.
As valuations increase for publicly traded cannabis companies with significant cultivation and retail operations throughout the country, investors and industry observers anticipate that smaller operators well-positioned in limited licensed states where Revolution operates will be attractive acquisition candidates.
Under de Souza, Revolution expanded to states with growing medical marijuana markets. In 2019, the company hired Candace Gingrich, spouse of Illinois State representative Kelly Cassidy (and half-sister of former U.S. House Speaker Newt Gingrich), as a business development executive overseeing the Florida market. Cassidy was a lead House sponsor for adult-use legalization of cannabis that passed last year.
Aficionados of the plant note that Revolution products are among the most desirable legally cultivated and processed products in Illinois. The company nearly swept prizes for best varietals and form factors in the High Times Illinois Cannabis Cup Awards earlier this year. Revolution also reportedly invests heavily in genetics research.
De Souza, who remains a board advisor to Revolution, is now CEO of Plymouth, Michigan-based Penrose ThearapeuTx, a pharmaceutical company focused on cancer treatment.
“This was an opportune time for me to step down after four years as CEO of Revolution Global,” he told Grown In. “Revolution has emerged as an innovator in the genetics of cannabis, a recognized producer of high-quality, premium products at scale, and a fledgling multi-state operator.”