When asked during the segment if Hexo is prepared to add a premium to the offer in order to get Newstrike shareholders on board, St-Louis said the company is "not interested in bidding wars". According to HEXO's website, the company currently has 310,000-sq-ft of production space, with another "1,000,000-sq-ft facility now under construction". The significant growth potential of Up Cannabis, with provincial distribution agreements in seven provinces and expansion underway to increase annual production capacity to over 40,000 kilograms, is well aligned with 3 Sixty's strategic priorities which include significant organic growth by adding new customers and the expansion of security services offered to existing customers within the recently legalized cannabis industry.
Terry Lake, Hexo's vice-president of corporate social responsibility and a former Canadian politician, tells OBJ that the acquisition furthers the company's ambitions to become one of the largest pot producers in Canada.
HEXO hopes this will buoy them to their goal of $400 million in yearly net revenue by July 2020.
Newstrike's position in Ontario and "English Canada" complements Hexo's position in Quebec, commented Newstrike CEO Jay Wilgar. In this case performance of tends to percentage rate of return for a stock for a given time frame. Newstrike is a licensed cannabis grower and distributor that has been working on developing "high-quality cannabis brands".
"It was no secret that deals were being tabled in the week that our retail operators had to complete their retail operator license application", Brenna Boonstra, director of quality and regulatory consulting Cannabis Compliance, told INN. This would be comparable to the 150,000 kg planned and funded capacity of Aurora Cannabis Inc. The all-stock deal is worth approximately $260 million.
Newstrike management "gave their company to Hexo for nothing!"
The company reported that it produced 4,938 kg of dried cannabis, an increase of 39% over the first quarter of fiscal 2019. As the company grows both organically and through acquisitions, he says the firm remains proud of its local roots. Hexo rose 6.63 percent and 5.81 percent in NY and Toronto, to finish with a closing price of US$5.92 and C$7.83.
"I think Hexo has been doing things the right way for a long time, we certainly have now a reputation for execution and also good governance that allows partners of RBC's status and of Molson's status and other Fortune 500s to come to the table", he said. 3,800,606 shares traded hands during mid-day trading, an increase of 116% from the average session volume of 1,759,574 shares.