Hexo Reported Unlicensed Cannabis, Schedules It For Destruction

Hexo Corp (TSX:HEXO) (NYSE: HEXO) said Friday that it decided to respond to false information that has been circling around regarding the licensing at its facility in Niagara, Ontario. 

Benzinga · 11/18/2019 16:42

Hexo Corp (TSX:HEXO) (NYSE: HEXO) said Friday that it decided to respond to false information that has been circling around regarding the licensing at its facility in Niagara, Ontario. 

In November 2018, prior to the company’s acquisition of Newstrike Brands Ltd, the UP cannabis cultivation facility was licensed by Health Canada.

The facility's Block B was included In the license application, and Hexo said it thought Block B was licensed. 

At the end of July, soon after Hexo acquired Newstrike Brand Ltd., Hexo discovered that cannabis cultivated in Block B was not appropriately licensed, the company said. 

Hexo immediately informed Health Canada and kept the inventory on the site to schedule it for destruction.

“Hexo is keenly focused on producing high-quality products that Canadians can trust,” CEO and co-founder Sebastien St-Louis said in a statement.

“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.”

There are no current operations at the facility, and UP cannabis is now cultivated at Hexo's other facilities, the company said. 

Hexo shares were down 5.62% at $1.68 at the time of publication. 

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Photo courtesy of Hexo.