HEXO Granted New Licenses, Culls 200 Employees

Cannabis derivative products are due to hit shelves by year’s end, and licensed producers such as HEXO Corp (TSX: HEXO; NYSE: HEXO) are busy working towards new Health Canada approval to produce, store, and distribute those products.

Today HEXO announced the company’s Belleville location was granted both a Processing and a Research and Development license from the federal government.

The site saw licensing for a first phase of conversion as it transitions from a distribution center to a multi-use property for manufacturing and processing cannabis 2.0 items like edibles, beverages, vapes, and beauty products.

With a new focus on developing product lines outside the standard dried flower offerings, HEXO is preparing for additional R&D to also take place at sites in Vaughan and Montreal.

Discussing that shift, Chief Executive Officer Sebastien St-Louis commented:

The research license will allow us to take our innovation work to the next level, with testing on derivative products, including taste testing. Consumers have high expectations for their packaged goods, and cannabis will be no different. We are committed to ensuring a consistent experience and to guaranteeing that experiences powered by HEXO meet these expectations.

Aside from the Belleville licenses, HEXO was granted approval for the sale of edibles, beverages, extracts, and topicals from the company’s main Gatineau location today.

In other news, HEXO has followed in the footsteps of several other major licensed producers struggling in a post-legalization industry and announced a major insider fundraising effort.

In order to acquire enough cash to continue operations and attempt to regain investor confidence, the company’s CEO and several board members raised $70 million through a private placement last week.

The company delayed its earnings report in light of that new influx of cash, with the next investor conference call now due to take place tomorrow – October 29, 2019.

That private placement and delayed financial call arrive just days after HEXO cut 200 positions from its employee roster, including rank and file employees at various locations as well as two executives. Both Chief Manufacturing Officer Arno Groll and Chief Marketing Officer Nick Davies were culled in the employee purge as HEXO seeks to cut costs and continue operations.

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Ty Arthur

Ty Arthur has spent the last decade of his journalism career covering everything from cutting-edge tech to local news through outlets such as the Houston Chronicle. He has focused on the counterculture aspects of society, from marijuana legalization to underground music through Metalunderground.com and rapidly changing trends in the entertainment industry. He lives in the cold, dark north with his wife and son.

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