HEXO Corp (TSX:HEXO; NYSE-A:HEXO) (the "Company") is reporting
its financial results for the third quarter of the 2019 fiscal
year.
“The past five years have seen the cannabis industry landscape,
and our company, evolve significantly,” said HEXO CEO and
co-founder Sebastien St-Louis. “This evolution continues at a
staggering pace, as HEXO ramps up production effort and
significantly increases its inventory, further contributing to our
capacity to meet the demand and to reach our sales and revenue
targets. Our Innovation, Development and Engineering team has grown
significantly ahead of the legalization of edibles and now
includes 25 professionals with PhDs and extensive experience in
major consumer packaged goods companies
“This quarter saw HEXO remain on-track as it continues ramping
up to $400 million in revenue in fiscal 2020, including completing
the first harvest in our 1 million sq. ft. Expansion and preparing
to fund our ongoing expansion projects and innovation initiatives
by entering a $65 million syndicated credit facility.”
Subsequent to quarter end, HEXO bolstered its senior
management team through the appointment of Michael Monahan as
Chief Financial Officer and Donald Courtney as Chief Operating
Officer. HEXO continues to drive value through its management team,
with experience across a variety of industries, guiding and
supporting the Company.
HEXO most recently announced the closing of the agreement to
acquire Newstrike. The acquisition will provide HEXO Corp
capacity to produce approximately 150,000 kg of high-quality
cannabis annually with access to four additional production
campuses. It also provides the Company diversified domestic market
penetration with combined distribution agreements in eight
provinces. The combined entity is estimated to
realize millions in annual synergies, allowing HEXO to
operate more efficiently with a continued commitment to
excellence.
The management’s discussion and analysis for the period and the
accompanying financial statements and notes are available under the
Company's profile on SEDAR at www.sedar.com and on its
website at www.hexocorp.com.
Operational and Financial Highlights
KEY FINANCIAL PERFORMANCE INDICATORS
Summary of results for the three and nine months period ended
April 30, 2019 and April 30, 2018:
|
For the three months ended |
|
For the nine months ended |
|
Income
Statement Snapshot |
April 30, 2019 |
|
April 30, 2018 |
|
April 30, 2019 |
|
April 30, 2018 |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
Gross
cannabis revenue |
15,930 |
|
|
1,240 |
|
38,739 |
|
3,523 |
|
Excise taxes |
(2,974 |
) |
|
– |
|
(6,792 |
) |
– |
|
Net revenue from sale of goods |
12,956 |
|
|
1,240 |
|
31,947 |
|
3,523 |
|
Ancillary revenue |
61 |
|
|
– |
|
170 |
|
– |
|
Gross margin before fair value adjustments |
6,440 |
|
|
761 |
|
16,212 |
|
2,130 |
|
Gross margin |
21,832 |
|
|
2,666 |
|
40,674 |
|
5,881 |
|
Operating expenses |
24,056 |
|
|
5,319 |
|
64,580 |
|
13,654 |
|
Loss from operations |
(2,224 |
) |
|
(2,653 |
) |
(23,906 |
) |
(7,773 |
) |
Other income/(expenses) |
(5,527 |
) |
|
682 |
|
(979 |
) |
(5,068 |
) |
Net loss |
(7,751 |
) |
|
(1,971 |
) |
(24,885 |
) |
(12,841 |
) |
|
|
|
|
|
For the three months
ended |
|
|
Operational
Results |
|
April 30, 2019 |
|
January 31, 2019 |
|
October 31, 2018 |
|
Avg. gross selling price of adult-use
dried gram & gram equivalents |
$ |
5.29 |
|
$ |
5.83 |
|
$ |
5.45 |
|
Kilograms sold of adult-use dried gram
& gram equivalents |
|
2,759 |
|
|
2,537 |
|
952 |
|
Avg. gross selling price of medical dried
gram & gram equivalents |
$ |
9.11 |
|
$ |
9.15 |
|
$ |
9.12 |
|
Kilograms sold of medical dried gram &
gram equivalents |
|
145 |
|
|
152 |
|
158 |
|
|
|
|
|
|
|
|
|
|
Total
kilograms produced of dried gram equivalents |
|
9,804 |
|
|
4,938 |
|
3,550 |
|
Q3 PERIOD HIGHLIGHTS
- Total gross revenue in the quarter increased in excess of
11.84x to $15,930 as compared to the same quarter of fiscal
2018.
- Gross adult-use revenue in the three months ended April 30,
2019, exceeded total revenues fiscal 2018 by $9,673 or 196%.
- Flower and other dry products represented 84% of the quarter’s
gross adult-use sales, with oil sales representing the balance of
16%.
- New in the fiscal year are ancillary revenues associated the
Company’s management agreement held with a supplier. This
contributed $61 to of net revenue in the quarter.
- The loss from operations decreased 68% quarter over quarter as
a result of the increased fair market value adjustment on
biological assets reflecting the increased scale of operations and
additional plants onboarded due to the licensing of the 1 million
sq. ft. B9 greenhouse.
OPERATIONAL HIGHLIGHTS
- Adult-use grams and gram equivalents sold increased 9% to 2,759
kg from the previous quarter as the Company continues to deliver on
its existing supply agreements.
- During the quarter ended April 30, 2019, the Company produced
approximately 9,804 kg of dried cannabis, a 98% increase from the
previous quarter. This is attributable to higher yields in the
250,000 sq. ft. B6 facility as well as the first harvests of the 1
million sq. ft. B9 greenhouse also realized during the
quarter.
- The Company continues ramping up towards its 108,000 kg of
annual full production capacity. Economies of scale and production
efficiencies continue to be worked towards to reach this
capacity.
ORGANIZATIONAL GROWTH
- As a direct result of the increased operations and staffing
requirements of the now several cultivation and production
facilities, the Company experienced tremendous growth over the past
quarter. In order to satisfy the needs of our 1 million sq. ft. B9
facility and 579,000 sq. ft. Centre of Excellence, along with
boosting our administration, R&D and other operations our
headcount rose by 120% to 822 employees as at April 30, 2019
from the previous quarter’s headcount of 374 on January 31,
2019. This represents an increase of 685 employees or x5 from the
headcount as at April 30, 2018.
- On May 24, 2019, through the Newstrike acquisition, HEXO
acquired an additional 250 employee backed skilled workforce.
FACILITY EXPANSION
- In April 2019, we realized the first harvests of the newly
completed and licensed B9 1 million sq. ft. greenhouse at the
Gatineau campus. This goal was met on time and on budget. This
achievement was important step as the Company continues ramping up
to an annual combined with Newstrike production capacity of 150,000
kg of dried cannabis and prepares for the legalization of edibles
and concentrate cannabis derivatives expected in the fall of 2019.
FINANCIAL POSITION
- As at April 30, 2019, the Company held cash, cash
equivalents and short-term investments of $173,604 and working
capital of $219,120.
- The Company obtained a $65mm credit facility jointly held with
CIBC and BMO, two of Canada’s premier financial institutions. This
consists of $50mm available term credit and a $15mm revolving line
of credit which will be used in part to finance the continuing
expansion of the Gatineau campus as well as the leasehold
improvements at the Belleville transformation centre without
diluting the shareholders of HEXO.
Summary of Results
Revenue
|
Q3 ’19 |
|
Q2 ’19 |
|
Q1 ’19 |
|
Q4 ’18 |
Q3 ’18 |
ADULT-USE |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adult-use cannabis gross revenue1 |
$ |
14,607 |
|
$ |
14,792 |
|
$ |
5,194 |
|
$ |
– |
$ |
– |
Adult-use excise
taxes |
|
(2,741 |
) |
|
(2,587 |
) |
|
(970 |
) |
|
– |
|
– |
Adult-use cannabis net revenue |
|
11,866 |
|
|
12,205 |
|
|
4,224 |
|
|
– |
|
– |
Dried
grams and gram equivalents sold (kg) |
|
2,759 |
|
|
2,537 |
|
|
952 |
|
|
– |
|
– |
Adult-use gross revenue/gram
equivalent |
$ |
5.29 |
|
$ |
5.83 |
|
$ |
5.45 |
|
$ |
– |
$ |
– |
Adult-use net revenue/gram
equivalent |
$ |
4.30 |
|
$ |
4.81 |
|
$ |
4.44 |
|
$ |
– |
$ |
– |
MEDICAL |
|
|
|
|
|
Medical cannabis revenue1 |
$ |
1,323 |
|
$ |
1,387 |
|
$ |
1,436 |
|
$ |
1,410 |
$ |
1,240 |
Medical
cannabis excise taxes |
|
(233 |
) |
|
(216 |
) |
|
(44 |
) |
|
– |
|
– |
Medical cannabis net
revenue |
|
1,090 |
|
|
1,171 |
|
|
1,392 |
|
|
1,410 |
|
1,240 |
Dried
grams and gram equivalents sold |
|
145 |
|
|
152 |
|
|
158 |
|
|
152 |
|
134 |
Medical gross revenue/gram
equivalent |
$ |
9.11 |
|
$ |
9.15 |
|
$ |
9.12 |
|
$ |
9.26 |
$ |
9.24 |
Medical
net revenue/gram equivalent |
$ |
7.52 |
|
$ |
7.73 |
|
$ |
8.84 |
|
$ |
– |
$ |
– |
|
|
|
|
|
|
Ancillary revenue2 |
$ |
61 |
|
$ |
62 |
|
$ |
47 |
|
$ |
– |
$ |
– |
Total net sales |
$ |
13,017 |
|
$ |
13,438 |
|
$ |
5,663 |
|
$ |
1,410 |
$ |
1,240 |
1 Gross
adult-use and medical cannabis revenues represent sales under the
normal course of business and are exclusive of excise taxes. |
2 Revenue outside
of the primary operations of the Company. |
Total net revenue in the third quarter of fiscal 2019 increased
to $13,017 from $1,240 in the same period of fiscal 2018. The main
contributor is the addition of adult-use sales in which the Company
is realizing in its first fiscal year of legalization in Canada.
Adult-use sales in the quarter accounted for 91% of total revenue.
Non-cannabis ancillary sales which began in the first quarter of
fiscal 2019 remained consistent at $61 from $62 in the previous
quarter. This revenue is derived from a management agreement held
by the Company with arms-length partners.
ADULT-USE SALES
As communicated in the previous quarter’s management discussion
and analysis the current quarters adult-use gross sales stayed
relatively flat totaling $14,607 in the three months ended April
30, 2019. This represents a slight decrease of 1% as compared to
the prior quarter. Third quarter gross sales increased by $13,367
relative to the same period of fiscal 2018, (which included medical
sales only during that period) or an increase of 1,078%. This is a
result of the Company’s additional production capacity still in the
ramp up stage as the new 1 million sq. ft. greenhouse realized its
first harvest in April 2019.
The Company’s adult-use gross sales for the nine months period
ended April 30, 2019 totaled $34,593, an increase of $31,070 as
compared to the nine months period ended April 30, 2018 total sales
of $3,523. The increase is due to fiscal 2018 containing medical
sales only.
Sales volume in the third quarter of 2019 increased 9% to 2,759
kg from 2,537 kg equivalents sold in the second quarter of fiscal
2019 and increased 190% from 952 kg in the first quarter of fiscal
2019. Dried flower and milled products represented 84% of gram
equivalents sold during the period, a 6% increase from the second
quarter of fiscal 2019 and oil product sales comprising the balance
of the quantity sold.
Gross adult-use revenue per gram equivalent decreased to $5.29
from $5.83 reflective of lower revenue and higher gram and gram
equivalents sold. This is reflective of increased dry flower sales
in the sales product mix during the quarter which command lower
market sales prices per gram. The adult-use net revenue per gram
equivalent decreased to $4.30 from $4.81 in the previous quarter
reflecting the consistent approximate ($1.00) impact to revenue per
gram due to excise taxes. In future periods as the sales mix shifts
towards oil and other value-added products from lower valued dry
flower products the impact of these excise taxes on revenue per
gram is expected to decrease.
During the period, 91% of all adult-use sales were realized
through the SQDC with the remaining 9% derived in Ontario and
British Columbia via the OCS and BCLDB.
As the Company begins realizing sales from its first harvests of
from its B9 greenhouse in the fourth quarter of fiscal 2019 net
revenues are expected to approximately double those of the current
quarter.
MEDICAL SALES
Gross medical revenue in the three months ended April 30,
2019 increased 7% to $1,323 compared to $1,240 in the same period
in fiscal 2018. Grams and gram equivalents sold increased
marginally to 145 kg from 134 kg in the third quarter of 2018. The
higher revenue was driven by higher oil sales which command a
higher revenue per gram equivalent when compared to dried gram
sales. Compared to the prior quarter, the sequential revenue
decreased by 5% from $1,387, reflecting lower oil sales as well an
oil product mix sold of a lower average value per gram
equivalent.
The Company realized $4,146 of gross medical sales during the
nine months period ended April 30, 2019 which is an increase of 18%
from the $3,523 of gross medical sales during the comparative nine
months ended April 30, 2018. This increase is due to those reasons
as stated above.
Net medical revenues decreased during the quarter by 7% to
$1,090 as compared to the second quarter of fiscal 2019 due to the
overall decrease in medical sales during the period.
Sales volume increased 8% to 145 kg when compared to 134 kg in
the same prior year period. Gross revenue per gram and gram
equivalent decreased to $9.11 as compared to $9.24 the same prior
year period and $9.15 from the prior quarter. This is a direct
result of the increase in our oil-based products sales as the
product mix purchased by customers continues to shift towards
smoke-free alternatives.
Cost of Sales, Excise Taxes and Fair Value
Adjustments
Cost of goods sold includes the direct and indirect costs of
materials and labour related to inventory sold, and includes
harvesting, processing, packaging, shipping costs, depreciation and
applicable stock based compensation and overhead.
Fair value adjustment on sale of inventory includes the fair
value of biological assets included in the value of inventory
transferred to cost of sales.
Fair value of biological assets represents the increase or
decrease in fair value of plants during the growing process less
expected cost to complete and selling costs and includes certain
management estimates.
|
For the three months ended |
|
For the nine months ended |
|
|
April 30, 2019 |
|
April 30, 2018 |
|
April 30, 2019 |
|
April 30, 2018 |
|
Excise taxes |
$ |
2,974 |
|
$ |
– |
|
$ |
6,792 |
|
$ |
– |
|
Cost of sales |
|
6,577 |
|
|
479 |
|
|
15,905 |
|
|
1,393 |
|
|
|
|
|
|
Fair value adjustment on sale of inventory |
|
4,665 |
|
|
572 |
|
|
9,072 |
|
|
2,419 |
|
Fair value adjustment
on biological assets |
|
(20,057 |
) |
|
(2,477 |
) |
|
(33,534 |
) |
|
(6,169 |
) |
Total fair value
adjustment |
$ |
(15,392 |
) |
$ |
(1,905 |
) |
$ |
(24,462 |
) |
$ |
(3,750 |
) |
Cost of sales for the quarter ended April 30, 2019 were
$6,577, compared to $479 for the same quarter ended in fiscal 2018.
The increase in cost of sales is the result of increased sales
volumes due to the legalized adult-use market not present in the
comparative period. Also, increases to transformation costs were
incurred as oil and other value-added products production mix has
increased from the third quarter of fiscal 2018.
For the nine months period ended April 30, 2019, cost of sales
increased to $15,905 from $1,393 from the comparable period of
fiscal 2018 for the reasons as noted above.
Fair value adjustment on the sale of inventory for the third
quarter ended April 30, 2019 was $4,665 compared to $572 for
the same quarter ended April 30, 2018. This variance is due to
increased sales volume of inventory sold when compared to the same
quarter in fiscal year 2018. Which was offset by the introduction
of the adult-use market which commands a lower fair value per gram
when compared to the exclusively medical market-based sales in the
three months ended April 30, 2018.
Fair value adjustment on biological assets for the current
quarter was ($20,057) compared to ($2,477) for the same quarter
ended in fiscal 2018. This variance is due to the increase in the
total number of plants on hand as well as increased yields when
compared to the comparative period. The increase in plants is due
to the fully licensed 250,000 sq. ft. greenhouse which began
harvests in Q1 of fiscal 2019 as well as the activation of the 1
million sq. ft. greenhouse during the quarter. This results in
significantly increased expected gram yields in the quarter and
increased production costs of operating newly in-use facilities.
The increase in scale and total plants on hand is the result of
meeting the demand of the adult-use market.
For the nine months ended, the fair value adjustments on the
sale of inventory and biological assets increased to $9,072 and
($33,534) respectively from $2,419 and ($6,169) respectively in the
comparative period of fiscal 2018 for those reasons as noted
above.
New in fiscal 2019 are excise taxes associated with the new
adult-use revenues and medical sales incurred after October 17,
2018. These taxes totaled $2,974 an increase of 6% from the prior
quarter which is contestant with trend of the increase to
underlying sales quantities. This was offset by the decrease in
total gross sales for the quarter based on the product mix
consisting of a higher balance of lower valued dried flower sales.
This reduced gross margin before fair value adjustments by
approximately 9% during the quarter which is consistent with the
sequential quarter. Excise taxes are a function of fixed provincial
and territorial rates based upon the gram equivalents sold as well
as a variable ad valorem component which is dependent upon the
selling price of the products.
Operating Expenses
|
For the three months ended |
For the nine months ended |
|
April 30, 2019 |
April 30, 2018 |
April 30, 2019 |
April 30, 2018 |
General and administration |
$ |
10,495 |
$ |
2,028 |
$ |
23,572 |
$ |
5,074 |
Marketing and promotion |
|
5,122 |
|
2,102 |
|
21,671 |
|
4,528 |
Stock-based compensation |
|
8,162 |
|
783 |
|
17,811 |
|
3,064 |
Depreciation of property, plant and equipment |
|
140 |
|
163 |
|
1,166 |
|
475 |
Amortization of
intangible assets |
|
137 |
|
243 |
|
360 |
|
513 |
Total |
$ |
24,056 |
$ |
5,319 |
$ |
64,580 |
$ |
13,654 |
Operating expenses include general and administrative expenses,
inclusive of research and development, marketing and promotion,
stock-based compensation, and amortization expenses. Marketing and
promotion expenses include customer acquisition costs, customer
experience costs, salaries for marketing and promotion staff,
general corporate communications expenses, and research and
development costs. General and administrative expenses include
salaries for administrative staff and executive salaries as well as
general corporate expenditures including legal, insurance and
professional fees.
GENERAL AND ADMINISTRATIVE
General and administrative expenses increased to $10,495 in the
third quarter of fiscal 2019, compared to $2,028 for the same
period in fiscal 2018. This increase reflects the general growing
scale of our operations, including an increase in general, finance
and administrative staff for an increase of $2,965. New rental
space in our Belleville location resulted in an increase of $794
which was obtained to house product processing and transformation
as well as the administration department of the Belleville
location. Total professional, listing and legal expenses increased
by $900, as a result of additional corporate development
initiatives and the increased financial reporting and control-based
regulatory requirements accompanying public status on the TSX and
NYSE-A. Increased insurances pertaining to commercial property and
directors and officers increased $1,836 due to increased property,
plant and equipment balances and the listing on the NYSE-A.
Total general and administrative expenses for nine months ended
April 30, 2019 increased to $23,572 from $5,074 in the same period
of fiscal 2018 due to the general growth of the operational scale
of the corporation for the same reasons as outlined above.
The Company is anticipating general and administrative expenses
to increase in the next quarter as the Company completes and
operationalizes its current expansion projects over the remaining
quarter of the fiscal year. Research and development expenses are
expected to significantly increase in the final quarter of fiscal
2019 and subsequently, significantly escalate in fiscal 2020 as the
Company executes its innovation initiatives.
MARKETING AND PROMOTION
Marketing and promotion expenses increased to $5,122 in the
third quarter, compared to $2,102 for the same period in fiscal
2018. This reflects the implementation of our adult-use marketing
and promotional events undertaken in the quarter as we build brand
recognition and establish HEXO in the adult-use cannabis market.
This is inclusive of higher staff and travel-related expenses,
printing and promotional materials as well as advertisement costs.
Quarter over quarter total marketing and promotion expenses
increased modestly 6% from $4,839 due to an additional advertising
campaign and branding efforts incurred during the period.
Total marketing and promotion expenses for the nine months
period ended April 30, 2019 significantly increased to $21,671 from
$4,528 as compared to the same period of fiscal 2018. This
significant increase reflects the Company’s marketing and branding
campaign which was primarily realized in the first quarter of
fiscal 2019 as we prepared for the launch of the adult-use brand
HEXO into the legalized Canadian market.
The Company expects marketing and promotion expenses to trend
with revenues in the final quarter of the fiscal year.
STOCK-BASED COMPENSATION
Stock-based compensation increased by to $8,162 when compared to
$783 for the same period in fiscal 2018. The increase is a function
of the increased number of outstanding stock options which is a
direct correlation to the increased headcount of the Company.
Underlying market prices of those options granted subsequent the
third quarter of fiscal 2018 were significantly higher, resulting
in an increase to the expensed value on a per stock option basis
during the period.
Total stock-based compensation for the nine months ended April
30, 2019 increased to $17,811 from $3,064 as compared to the same
period of fiscal 2018 for those reasons as outlined above.
AMORTIZATION OF PROPERTY, PLANT AND
EQUIPMENT
Amortization of property, plant and equipment decreased slightly
to $140 in the quarter, compared with $163 for the same period in
fiscal 2018. The decrease is due to the capitalization of
production equipment and building amortization in the period.
Total amortization of property, plant and equipment for the nine
months ended April 30, 2019 increased to $1,166 from $475 as
compared to the same period of fiscal 2018 as the direct result of
the Company’s newly built greenhouses and acquired cultivation
equipment. Additionally, increases to cultivation and production
equipment were incurred in order to support the larger production
demands and scalability of the Company.
AMORTIZATION OF INTANGIBLE ASSETS
Amortization of intangible assets decreased to $137 in the
quarter, compared with $243 for the same period in fiscal 2018. The
decrease is the result of the implementation of an inactive new ERP
system which was only put into use during the period ended April
30, 2019. This system is replacing certain fully amortized software
programs.
Total amortization of intangible assets for the nine months
ended April 30, 2019 decreased to $360 from $513 as compared to the
same period of fiscal 2018 for those reasons as outlined above.
Loss from Operations
Loss from operations for the third quarter was ($2,224),
compared to ($2,653) for the same period in fiscal 2018. The
increased operating expenses due to the expanding scale of
operations were offset by higher revenues and increased biological
fair value adjustments as our production capacity continues to
increase.
Other Income/Expenses
Other income/(expense) was ($5,527) for the three months ended
April 30, 2019 compared to $682 in the same period of fiscal
2018. Revaluation of financial instruments of ($1,121) in the
latest quarter reflects the revaluation of an embedded derivative
related to USD denominated warrants issued in the prior year.
Additionally, we had an unrealized fair value loss on convertible
note receivable of ($4,117) as well as an unrealized loss on a long
term investment of ($277). Interest income of $1,242 was realized
for the three months ended April 30, 2019 reflective of the
interest generated from the increased cash holdings and the
interest accrued on the convertible debentures and promissory note
which was settled on April 30, 2019.
Total other income/(expense) was ($979) for the nine months
ended April 30, 2019 compared to ($5,068) of the same period of
fiscal 2018. The increase is primarily due to the $1,862 unrealized
gain on the convertible debenture which was issued in the first
quarter of fiscal 2019. The loss due to revaluation of the
financial instruments decreased $645 when compared to the nine
months ended April 30, 2018 due to a decrease in the remaining
number of underlying warrants. Interest income increased $1,350 due
to increased cash holdings, convertible note interest and interest
earned on a public security investment.
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 with 2.4 million
sq. ft of 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 and Up Cannabis 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
Smith 1-866-438-8429 invest@HEXO.com www.hexocorp.com
Media Relations: Caroline
Milliard (819)
317-0526 media@hexo.com Director Adam
Miron 819-639-5498
A video accompanying this announcement is available
at https://www.globenewswire.com/NewsRoom/AttachmentNg/ac3726ad-b136-4048-80fa-b386164aa2a5
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