TSX:HEXO.W.A - Post by User
Comment by
mydogchachon May 27, 2021 2:40pm
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Post# 33279485
RE:NewStrike Summary (Mar 13, 2019)
RE:NewStrike Summary (Mar 13, 2019)Why do you continue to feel the need to justify the purchase of Newstrike?
It was a bad decision and before a year was up, Hexo had to sell the assets and take a write down to the tune of $300 million dollars.
Buying additional growing capacity and inventory was clearly a bad decision by management - but should have presenetd an excellent opportunity to not make the same mistake again and again.
Can you just get over SSL mistake and let it go?
Oh wait !!
despite not needing the extra growing capacity - and the fact that Canada remains over supplied - for a number of reasons .............. why in the heck would Hexo do exactly what they did with Newstrike - that is, buy additional capacity and inventory?
After the acqusiitions close - Hexo will have $ 178 miilion in inventory, almost two yaers of combined sales! There WILL be inventory impairements and write downs.
The U.S. and Europe - yes, eventually. But even after legalziation, it's still two years away before Hexo starts selling in the U.S. - and it'll take any company anotehr few years to gain market share.
Europe - Hexo has no sales licence,itself and itheir agreement with EU sales partner Farmako is not much good - Farmako also doesn't have their licence yet - and currently sells PPE and sanitizer! hahahaha
At any rate - the agreement was 500kgs a year for 3 years - sigend in 2019, but Zena has yet to sell an ounce in Europe.
Nah - they didn't need capacity or inventory and Zena Langley will be the first to close down, 48North's pitiful little 1 acre greenhouse will also close - 48North was purchasing product from other growers already.