HEXO Corp provides additional transparency on licensing
November 15 2019 - 4:56PM
HEXO Corp (TSX: HEXO; NYSE: HEXO) (“HEXO” or the “Company”) is
providing additional information about licensing at its facility in
Niagara, Ontario.
In November 2018, prior to HEXO Corp’s acquisition of Newstrike
Brands Ltd., the UP Cannabis cultivation facility in Niagara was
licenced by Health Canada and production from that facility began
shortly after. Block B – the space in question – was included in
the licence application. In October 2018, Health Canada requested
additional information for the application, pertaining specifically
to the building where Block B is housed. When the licence was
received, the team was under the impression that Block B was
included in the licence. In February 2019, Health Canada conducted
an inspection of the facility, which included Block B and no
observations were made about cultivation in this space. This
further reinforced the assumption that it was indeed a licensed
growing space.
On July 30, 2019, shortly after the Newstrike Brand Ltd.
acquisition closed, HEXO discovered that cannabis was being grown
in Block B, which was not adequately licensed. HEXO management
immediately ceased cultivation and production activities in the
unlicensed space. The Company notified Health Canada instantly, and
the regulator was satisfied with HEXO management’s corrective
actions. The Company is confident that all product cultivated and
produced in all its facilities is grown according to the highest
quality standards and following all standard operating procedures.
As an additional quality assurance measure, HEXO’s Chief Operating
Officer personally inspected and certified any shipments for sale
from that facility. All of the inventory on site at that time was
held from shipping and scheduled for destruction.
“HEXO is keenly focused on producing high-quality products that
Canadians can trust,” said HEXO CEO and co-founder Sebastien
St-Louis. “Upon discovering that cannabis was being grown in an
inadequately licensed area of the Niagara facility we immediately
ceased all activities and notified Health Canada. While we are
disappointed with what we uncovered, we assume responsibility for
any issues with UP products prior to the acquisition.”
Today, the facility is no longer operational. On October 24,
2019, HEXO announced it was right-sizing its operations and winding
down operations in Niagara. UP cannabis is now grown at HEXO’s
Gatineau licensed cultivation facility in Gatineau, QC, as well as
in Brantford in an in-door cultivation facility, and the Company
retains the ability the reinstate the Niagara facility should
demand increase. On October 28, 2019, the Company announced it had
received renewed licences, as well as new licences for its
Belleville Centre of Excellence, for research, and for the sale of
new cannabis categories.
HEXO is choosing to proactively address this occurrence now as
it recently became aware false information that was being
circulated to damage the reputation of the Company. HEXO felt that
it was diligent to ensure factually accurate information was
available to its stakeholders.
About HEXO Corp
HEXO Corp is an award-winning consumer packaged
goods cannabis company that creates and distributes innovative
products to serve the global cannabis market. Through its hub and
spoke business strategy, HEXO Corp is partnering with Fortune 500
companies, bringing its brand value, cannabinoid isolation
technology, licensed infrastructure and regulatory expertise to
established companies, leveraging their distribution networks and
capacity. As one of the largest licensed cannabis companies in
Canada, HEXO Corp operates facilities in Ontario and Quebec. The
Company is also expanding internationally and has a foothold in
Greece to establish a Eurozone processing, production and
distribution centre. The Company serves the Canadian adult-use
markets under its HEXO Cannabis, Up Cannabis and Original Stash
brands, and the medical market under HEXO medical cannabis. For
more information please visit hexocorp.com.
Forward-Looking Statements
This press release contains forward-looking
information and forward-looking statements within the meaning of
applicable securities laws (“forward-looking statements”).
Forward-looking statements are based on certain expectations and
assumptions and are subject to known and unknown risks and
uncertainties and other factors that could cause actual events,
results, performance and achievements to differ materially from
those anticipated in these forward-looking statements.
Forward-looking statements should not be read as guarantees of
future performance or results. A more complete discussion of the
risks and uncertainties facing the Company appears in the Company’s
Annual Information Form and other continuous disclosure filings,
which are available on SEDAR at www.sedar.com and EDGAR at
www.sec.gov. Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the
date of this press release. The Company disclaims any intention or
obligation, except to the extent required by law, to update or
revise any forward-looking statements as a result of new
information or future events, or for any other reason.
Investor Relations:Jennifer
Smith1-866-438-8429invest@HEXO.comwww.hexocorp.com
Media Relations:(819)
317-0526media@hexo.com
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