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09/06/2018 - 11:45 AM EDT

Hexo CEO ‘very confident’ in expansion plans, says sale ‘matter of time’

Sébastien St. Louis, CEO of Hexo Corp, joins BNN Bloomberg to discuss calls from activist investor Riposte Capital to put the marijuana producer for sale.


HEXO acquires interest in 2M sq. ft. facility in Belleville, Ontario to create R&D and manufacturing centre of excellence 
GlobeNewswireSeptember 10, 2018, 10:54 AM MDT 
GATINEAU, Quebec, Sept. 10, 2018 (GLOBE NEWSWIRE) -- HEXO Corp. (“HEXO” or the “Company”) (HEXO.TO) has announced the acquisition of an interest in a 2,004,000 sq. ft. facility in Belleville, Ontario. This is the first facility of the Company to be established outside of Quebec, further delivering on its national expansion strategy and providing capacity for the manufacturing of advanced cannabis products, including cosmetics, vapes, non-alcoholic beverages and other edibles. 

The centralized location, conveniently located along primary shipping routes in Ontario, presents the opportunity to process and distribute products and to fulfil commitments across Canada. The space also supports the Company’s hub and spoke model. Its scalability, flexibility and location are ideal to deliver on anticipated future joint ventures with Fortune 500 companies for cosmetics, edibles, vapes, and more, positioning it to become a centre of excellence for all of HEXO’s joint ventures. HEXO’s expansion will also lead to the creation of jobs and a rejuvenated employment sector for the area. 

The building, previously used as a Sears distribution centre, will be owned in a joint venture with Olegna Holdings Inc. Initially, HEXO plans to lease up to 500,000 sq. ft. of the space from the joint venture. The proposed use of the building is conditional on the city approving the rezoning application. 

“There is a skilled workforce in the Belleville area, and we look forward to capturing it,” said Sebastien St-Louis, HEXO’s co-founder and CEO. “We are investing in the region and its people with a view to achieving a sustainable national presence. For the first time, we are stepping out of our home province of Quebec and are committed to and demonstrating our commitment to serve and expand across Canada. And we are keeping future partnership and international opportunities in sight for the near future.” 

The building is owned by Belleville Complex Inc., a joint venture in which HEXO will hold a 25% interest and Olegna Holdings Inc. will hold a 75% interest. In addition to its initial lease of 500,000 sq. ft. of the space under a long-term lease, HEXO will have rights of first offer and first refusal to lease the remaining space in the building. As part of the transaction, HEXO has loaned $20,000,000 to Belleville Complex to acquire the building. The loan will be repaid within 120 days from September 7, 2018, and as of October 7, 2018, will bear interest at an annual rate of 4%, which interest shall be payable monthly. The loan is secured by a first mortgage over the building. The transaction is subject to the satisfaction of certain conditions and is scheduled to close on October 12, 2018. 

The transaction is considered a “related party transaction” within the meaning of Multilateral Instrument 61 - 101 - Protection of Minority Security Holders in Special Transactions (“MI 61-101”) because Mr. Vincent Chiara, a director of HEXO, holds a majority interest in Olegna Holdings Inc. HEXO is relying on applicable exemptions from the minority approval and valuation requirements of MI 61-101 on the basis that neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction exceeds 25% of HEXO’s market capitalization. The terms of the transaction have been reviewed and approved by the independent directors of the Company, and the rental rates for the facility were supported by estimates from independent appraisers. 






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HEXO News: HEXO reports over $16.2 million in total gross revenue in the second quarter of fiscal 2019 03/14/2019 06:30:00 AM
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#446  Sticky Note HEXO Corp to acquire Newstrike Brands Ltd. March 13, postal72 03/13/19 08:01:00 AM
#288  Sticky Note Molson Coors Canada and HEXO Launch Truss junkHustler 10/04/18 06:06:14 PM
#488   Happy Anniversary HEXO 12yearplan 03/21/19 08:46:34 AM
#487   $HEXO --->boing! -congrats longs la_trader 03/19/19 11:19:37 AM
#486   We lift the rocket 12yearplan 03/19/19 10:18:54 AM
#485   Another great start folks! Smokemonster 03/19/19 09:45:16 AM
#484   Up another 3% AH. junkHustler 03/18/19 05:55:49 PM
#483   RUNNING after hours in America taubytaub 03/18/19 05:07:23 PM
#482   INDEED. Cant complain. PT was bumped to $11+ junkHustler 03/18/19 04:31:41 PM
#481   Nice Day! ;) 12yearplan 03/18/19 04:05:47 PM
#480   Exactly Man, Twist My Arm, lol HEXO$ 12yearplan 03/18/19 12:26:40 PM
#479   This is just the start folks. You Smokemonster 03/18/19 10:23:02 AM
#478   Oui oui ;) $HEXO 12yearplan 03/18/19 10:05:38 AM
#477   Weeeeee taubytaub 03/18/19 09:46:07 AM
#476   Thanks Mang!, $30 in 2 years or 12yearplan 03/18/19 09:24:21 AM
#475   HEXO -broke that 8. nicely done 12 la_trader 03/18/19 02:40:05 AM
#474   Couple nice tweets https://twitter.com/Hexocorp 12yearplan 03/15/19 03:25:47 PM
#473   Going to be a fun ride Taub, look 12yearplan 03/14/19 04:03:56 PM
#472   Nice end of day push taubytaub 03/14/19 03:39:52 PM
#471   https://twitter.com/newstrikeltd/status/1106265479100944384 12yearplan 03/14/19 03:23:38 PM
#470   HEXO Q2 Gross Revenue Soars 1,269% From Q2 RTupp23 03/14/19 01:11:53 PM
#469   https://twitter.com/search?f=tweets&vertical=default&q=%24HEXO&src=tyah 12yearplan 03/14/19 08:00:24 AM
#468   HEXO reports over $16.2 million in total gross Smokemonster 03/14/19 07:21:45 AM
#467   Isn't it amazing what you can accomplish ;) 12yearplan 03/14/19 07:15:55 AM
#466   WAKE UP ITS CHRISTMAS taubytaub 03/14/19 07:10:29 AM
#465   Good reason ;) 12yearplan 03/14/19 07:10:18 AM
#464   SoHexcited! 12yearplan 03/13/19 08:37:55 PM
#463   You are right, sweet!!! Smokemonster 03/13/19 07:45:28 PM
#462   Running after hours in America taubytaub 03/13/19 07:29:30 PM
#461   Remember Tomorrow is Fiscal update. Hoping to Smokemonster 03/13/19 07:02:08 PM
#460   Can a mod please PIN this. junkHustler 03/13/19 03:31:48 PM
#459   HEXO to Acquire Newstrike Brands for $263 Million, RTupp23 03/13/19 03:29:42 PM
#458   HEXO Corp to acquire Newstrike Brands Ltd. junkHustler 03/13/19 03:29:36 PM
#457   Strong volume and huge Bids coming in. junkHustler 03/13/19 03:24:56 PM
#456   Nice action today HEXO la_trader 03/13/19 03:18:06 PM
#455   https://www.bnnbloomberg.ca/hexo-buying-tragically-hip-backed-newstrike-in-lates 12yearplan 03/13/19 12:11:59 PM
#454   Yeah, trading or building it travels easily here, 12yearplan 03/13/19 09:45:56 AM
#453   Looks like we are ahead by a century. Smokemonster 03/13/19 09:32:35 AM
#452   Lol, thanks Smoke - good time to be in: 12yearplan 03/13/19 09:05:43 AM
#451   That was funny. HEXO is my long Smokemonster 03/13/19 08:56:31 AM
#450   HEXO$! - WEED KINGS! ;) 12yearplan 03/13/19 08:33:04 AM
#449   OMG!. [yt]C_S5cXbXe-4[/yt] https://country105.com/news/4287762/the-gord-downie 12yearplan 03/13/19 08:26:10 AM
#448   ;-) nice news! postal72 03/13/19 08:18:01 AM
#447   You beat me to it! Smokemonster 03/13/19 08:15:24 AM
#446   HEXO Corp to acquire Newstrike Brands Ltd. March 13, postal72 03/13/19 08:01:00 AM
#445   HEXO is the First Cannabis Company to Join junkHustler 03/12/19 03:17:51 PM
#444   HEXO is the First Cannabis Company to Join RTupp23 03/12/19 02:30:44 PM
#443   edit: NHOD and VOLUME, lol 12yearplan 03/11/19 03:47:23 PM
#442   It should have no implications to non chart 12yearplan 03/11/19 03:45:25 PM
#441   Indeed. Nice to be in a bundle with junkHustler 03/11/19 03:22:46 PM
#440   Looks like composite buying has begun. Nice Smokemonster 03/11/19 03:22:16 PM
#439   Implications to non chart people ? Ridgeback2017 03/11/19 02:17:38 PM