Less than a year after the big tobacco-backed Cronos Group closed its $300 million acquisition of the Calif.-based cannabidiol brand Lord Jones, the CEO of that business has departed.

Cronos (ticker: CRON) disclosed the departure of the CBD company CEO and co-founder, Robert Rosenheck, in a Securities and Exchange Commission filing Monday. Cronos shares retreated 1.8% during the regular session Monday, amid declines across much of the sector’s largest names.

Cronos has appointed Summer Frein to general manager of its U.S. operations, which includes Lord Jones. Frein joined Cronos this year and was previously Vice President, U.S. Head of Sales at Lord Jones. “Her appointment is a positive change for the Company and we believe will accelerate growth for our hemp-derived CBD business,” a company spokesperson told Barron’s in an email.

Cronos acquired Lord Jones last year for $300 million—$225 million in cash, and the remainder in stock—or roughly 75 to 150 times the Lord Jones’ 2018 revenue. The CBD company was founded in 2017 by Rosenheck and his spouse Cindy Capobianco. It wasn’t immediately clear whether Capobianco would remain at Cronos.

Lord Jones, which is incorporated under the legal name Redwood Holding Group LLC, brought in revenue of $3.4 million from the September 5 acquisition closing date through the end of December, according to the company’s annual financial filing with the SEC. Cronos CEO Mike Gorenstein and board member Jason Adler owned a 40% stake in Lord Jones through their private equity vehicle, Gotham Green Partners. Gotham Green paid $12.8 million for its stake and the fund stood to make roughly $21 million in fees and a $107.2 million return in the increase in value of the Lord Jones stock.

Gorenstein and Adler recused themselves from the negotiations, which were conducted by a special committee.

Like several Canadian marijuana companies, Cronos has taken outside investment and inked a deal with Marlboro-maker Altria Group (MO) in 2018. In exchange for a 45% ownership stake in Cronos, Altria paid $1.8 billion. Cronos has roughly $1.2 billion in cash.

To some industry watchers, Monday’s announcement was representative of a larger industry trend in Canada—the largest of the country’s licensed producers have been reconfiguring their businesses, including laying off hundreds of people as the promise of legalization has failed to match the reality of the market.

“This is probably cost rationalization, as all the licensed producers are focusing on tightening their belts and focusing on key businesses,” Cannabis ETF managing director Matt Markiewicz told Barron’s over the phone. “When the business environment is tough, you have to tighten the belt.”

Like many cannabis stocks, Cronos is heavily shorted. According to data from S3 Partners, investors are shorting 28% of the float, or roughly $322 million worth of stock. It’s one of the cheaper cannabis names to bet against with a stock borrow fee of 6.2%, according to S3 managing director Ihor Dusaniwsky, though it is the third most shorted stock in the sector. Dusaniwsky wrote in an email that shorts have been covering their positions in recent weeks with $224 million of short covering in the past month and $95 million in short covering over the past week.

The sell side is lukewarm on the stock, with eight analysts rating it a Hold, two a Sell, and four a Buy. The average target price is $6.08, which represents a downside of 8.3% from Monday’s closing price of $6.63.

Earlier this year Cronos restated several quarters of financial results and was the subject of an SEC inquiry asking it to retain its records related to revenue recognition.

Cronos stock has fallen 14.1% in the past year as the S&P 500 Index has declined 0.2%. The Cannabis ETF, which tracks a basket of U.S. and Canadian weed companies, has fallen 16.4% this year.

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