It’s not a good day to be a Canadian cannabis investor. Following the announcement of significant impairments over at Cronos Group (TSX: CRON) this morning, it appears that Hexo Corp (TSX: HEXO) is looking to one-up the company with its own impairments.
Hexo made a mid-morning announcement today, revealing that it is closing down three production facilities that it acquired only months ago. The facilities are being closed “to centralize product cultivation, manufacturing, and distribution at its core facilities.”
Facilities to be closed include both facilities acquired from the 48North transaction – a transaction which closed not even three months ago. For Hexo shareholders, this means that the transaction will likely be written off as a whole right after the closing of the transaction, raising numerous questions. Both facilities are slated for closure by the end of January.
Also to be closed is a facility acquired from the firms Zenabis Global transaction which closed earlier this year. That subsidiary will see its Stellarton, Nova Scotia facility closed by the end of February 2022.
It is expected that a total of 155 employees will be losing their employment with the company as a result.
Hexo Corp last traded at $1.89 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization unless otherwise mentioned. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
