HEXO Equities Warrants Exp 2 Apr 2024 T.HEXO.W.A

NewStrike Summary (Mar 13, 2019)

[quinlash]

The purchase of NewStrike occurred on March 13, 2019

Link to Original News Release (March 13, 2019)
https://www.globenewswire.com/news-release/2019/03/13/1752363/0/en/HEXO-Corp-to-acquire-Newstrike-Brands-Ltd.html

The deal provide HEXO immediate access to an addition 8 provincial supply agreements across Canada including Alberta that had the highest number of stores rollout in the shortest period of time.   IMHO that was a great move on the part of HEXO in order to ramp up sales in the shortest period of time.

NewStrike also brough in the Tragically Hip as a partner, which, at the time, was a great way to get exposure for the company.  Since then all indications is that the Tragically Hip and NewStrike parted ways.  In addition to the supply agreements and the marketing aspects and the provincial supply agreements NewStrike provide HEXO with the UP! product line of smokables.  This brand today is one of HEXO's top selling products and continues to bring in healthy margins.

Many speculated that the NewStrike deal was undervalued (at the time) as the Cannabis sector was red hot bad in 2019 however HEXO negoatiated a discount deal on the merger

Link to Article Indicating that HEXO / NewStrike Deal Massively Undervalued
https://seekingalpha.com/article/4249310-hexo-corp-acquires-newstrike-brands-is-massively-undervalued

Due to slower than expected store rollouts in Canada and a lower need for Cannabis production space, HEXO opted to sell off one of the NewStrike facilities so that the money could be used for other operational purposes.  Selling the facility also allowed HEXO to avoid the cost of maintaining the facility as it was not needed.

Times change, now HEXO has drinks rolled out and is making moves to expand operations into Europe and the US, additional growing space could very well be needed to support these new developments hence the moves to pick up smaller companies (again at discount prices) as well as expanding its product offerings.

The new acquistions on the part of HEXO will increase their sales figures and hence demand higher prices from the market once the Zenabis and 48 North Deals complete.  With the US talking about legalization now and so many states already having some level of legalization already in place it is not hard to say that it is just a matter of time before Federal level legalization is in place.  HEXO is entering this market and appears to be ready to take this on... with award winning products, a diverse product offering and with the backing of it's partner Molson-Coors.

[mydogchach]

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

[Touran77]

This post has been removed in accordance with Community Policy

[oldtimer1962]

This post has been removed in accordance with Community Policy

[quinlash]

As noted, the Newstrike deal was back in 2019.  Back then the store rollout in Canada was expected to take place at a much higher rate than it actually did, there was also news out speculating on US Legalization within a year or two, making that 2020 / 2021.  In 2020 we seen C-19 occur and this turned federal attention away from everything except for addressing the concerns of the public

[quinlash]

NewStrike was a good deal back then and it has proven itself every year afterwards through the sale of the UP! products, no one can dispute that

[mydogchach]

quinlash - (5/27/2021 8:01:19 PM) RE:RE:NewStrike Summary (Mar 13, 2019) NewStrike was a good deal back then and it has proven itself every year afterwards through the sale of the UP! products, no one can dispute that It was a fantastic deal, so good that 9 months later they wrote off $298.2 million - and that $32.0 million facility that went up for sale? Sold for $10.2 million

[quinlash]

Dog, the numbers you are referencing are over a year old, get with the program, HEXO has more than doubled it's sales since then, released top-selling drinks that are beating out Canopy Growth for the top position in Canada and are now being sold in the US through a jv with HEXO's Fortune 500 partner, Molson-Coors.  HEXO is not in a postion where it can expand the operation and

[quinlash]

... and "Q" still makes the occasional type-o :P

[quinlash]

Dog, once again you are referceing things far into the past.  The last time I seen anything in regards to HEXO layoffs was when they laid off contract workers wrapping up the automation of the Bellville facilty and that was simply a radio broadcast that (from what I could find) never did make a news article.  If you care to post some links to support your statements you may be a bit more

[Touran77]

This post has been removed in accordance with Community Policy

[quinlash]

He shorted Zenabis in the .05 to .06 range IMHO and his margin ratio will likely blow before HEXO hits $20.  Anyone who has been doing even basic PS-Ratio math on HEXO can see that target price is well within reason, no timeline, but the target is definately there.  Anyone monitoring the other forums will also see lots of chatter form investors refusing to sell below $20. I wonder if

[mydogchach]

Queen - it was you who said it was a good deal back then, I simply responded with news that even 'back then' everyone knew iit was a bad deal and that Hexo paid too much. $298 million write is not a good deal - no matter how many times you say it.  If it was such a good deal - why did Hexo sell it 9 months later, why didn't they just shutter it and re-open when needed? They paid

[mydogchach]

quinlash - (5/27/2021 8:01:19 PM) RE:RE:NewStrike Summary (Mar 13, 2019) NewStrike was a good deal back then and it has proven itself every year afterwards through the sale of the UP! products, no one can dispute that Well, see the two posts below: UP apologies on behalf of entire cannabis industry Hexo relaunches its brand by reaching out directly to experienced

[mydogchach]

quinlash - (5/27/2021 8:01:19 PM) RE:RE:NewStrike Summary (Mar 13, 2019) NewStrike was a good deal back then and it has proven itself every year afterwards through the sale of the UP! products, no one can dispute that Every year since then? You mean 2020? What were the UP brands revenue figures for 2020? Enough to cover the $298 million loss?