Hexo Corp To Close Belleville Facility, Impacting 230 Employees
If one thing in the cannabis sector is almost guaranteed, its that Hexo Corp (TSX: HEXO) will shutter facilities after conducting acquisitions. This has held true yet again, with the company last night revealing it will be shuttering its Belleville operations as it looks to “streamline operations and capitalize on production efficiencies.”
The facility closure is expected to impact approximately 230 employees, whom the firm is reportedly offering career counselling and other transitional services to. The decision has also seen the firm move manufacturing equipment to its other sites as part of the downsizing process.
Prior to the closure, the facility had been treated as a centralized hub, consisting of processing, manufacturing, and distribution within just under a million square feet of leased commercial space. Cannabis derivative products were largely manufactured here, including beverages produced by Truss Beverage Co, a partnership between the company and Molson Canada.
Truss Beverage Co operations being conducted in the facility are not to be impacted by the decision.
The decision follows the company selling its 25% stake in the facility in January for $10.1 million in gross proceeds.
it is currently unclear what impairments, if any, will impact the company as a result of the closure. The facility is expected to be fully closed, save for the Truss operations, by the end of July.
The closure and related layoffs follow the firm shedding 180 employees just months ago as part of a cost reduction initiative. Many of those roles were related to the firms closure of the Stellarton facility, as well as back-office job cuts.
Hexo Corp last traded at $0.56 on the TSX.
Information for this briefing was found via Sedar and Hexo Corp. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.