(Image via HEXO Corp.)
2022 has been a tumultuous year for cannabis producer
HEXO Corp. (TSX: HEXO, Forum) as it continues on what it has dubbed, it’s “Path Forward”.
Designed to “solidify HEXO’s position as the number one cannabis company in Canada” by recreational market share, the terminus of the path sees Hexo becoming the first amongst its peers to be cash flow positive from operations.
Under one of its five strategic pillars:
“Streamline and Simplify the Organizational Structure”, the company axed 180 positions earlier this month, which was expected to see annual savings of approximately $15 million (CAD).
HEXO’s Chief Executive Officer, Scott Scott Cooper said this was not an easy announcement to make.
“We are working with all impacted employees to the best of our ability to ensure that they are treated fairly and provided the support necessary to assist with this transition.”
On January 19th, 2022, the company declared that it would reduce its selling, general and administrative expenses by 30% by Fiscal Year End 2023.
About a week later, the company announced that it had entered into a transition agreement with Adam Arviv and his fund,
Kaos Capital, to refresh the company’s board of directors, effective immediately. The new Board will stand for election at the company’s upcoming annual and special meeting of shareholders to be held on March 8th, 2022.
The new board is composed of seven directors, all of whom are independent:
- Mark Attanasio (Chair)
- Rose Marie Gage (Vice-Chair and Chair of the ESG Committee)
- Vincent Chiara, Hélène F. Fortin (Chair of the Audit Committee)
- Rob Godfrey, Peter Montour, and William Montour
As part of the changes, John Bell has also announced that he has decided to step down as Chair of the Board of Directors, effective immediately.
CEO Cooper added that the company had built a reputation as a leader in the cannabis sector and will continue to pave the way as the industry evolves.
“I look forward to working with the refreshed board as we build the company’s next chapter and deliver on the Path Forward.”
Arviv noted that his team will work closely with the management team as they continue to fast-track the company’s path to becoming a cash flow positive business. Through his fund Kaos Capital, he currently owns an approximate 3% stake of HEXO's outstanding shares.
What do you think about HEXO’s strategy and current place in the market? Does it impact any investment decisions you’ve made with the company lately? Let us know your thoughts in the comments below.
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