- Tilray Brands Inc. (TSX:TLRY) has acquired HEXO Corp. (TSX:HEXO), creating the largest Canadian licensed cannabis producer by revenue
- In a deal worth C$302 million, HEXO shareholders will receive 0.4352 of a share of Tilray common stock in exchange for each HEXO share held
- In its Q3 2023 filing, HEXO reported a total net loss before tax of C$129.7 million, bringing accumulated losses since 2016 to more than C$2 billion
- Tilray Stock (TSX:TLRY) opened trading at C$1.56 per share and HEXO Corp. (HEXO) opened trading at $0.91per share
Tilray Brands Inc. (TSX:TLRY) has acquired HEXO Corp. (TSX:HEXO) creating the largest Canadian licensed cannabis producer by revenue.
Tilray stock was up nearly 2 per cent in early Friday trading.
Tilray has expanded its leading cannabis market share position in Canada with pro-forma cannabis market share increasing by 467 basis points to 13 per cent for the quarter ended May 31, 2023.
HEXO’s production process is expected to provide significant opportunities for Tilray to meet growing consumer demand for premium preroll and cone-style cannabis products.
In a deal worth C$302 million, HEXO shareholders will receive 0.4352 of a share of Tilray common stock in exchange for each HEXO share held, which implies a purchase price of C$1.65 per HEXO share based on the volume weighted average price of Tilray shares on the NASDAQ stock market.
Upon completion of the arrangement, existing Tilray and HEXO shareholders are expected to respectively own approximately 97 per cent and 3 per cent of Tilray on a pro forma basis.
With this move, Tilray seeks to solidify its position as the leading legal marijuana company in Canada.
Tilray Brands’ chairman and CEO, Irwin D. Simon, said in a news release that acquiring HEXO boosts his company’s competitive positioning in the largest, federally legalized cannabis market in the world, calling it the next evolution of Canadian cannabis.
“Having already established ourselves as the clear leader in Canada through an unparalleled portfolio of consumer and medical brands, continuous product innovation, and the lowest-cost production as well as industry-leading extraction capabilities, this transaction affirms and builds on our enviable standing by bringing HEXO’s leading cannabis brands into our state-of-the-art operations,” Simon said. “Together, we expect to deliver revenue growth, margin contribution, and value creation for shareholders.”
“On behalf of HEXO’s board and management team, I’d like to extend our deepest thanks to the entire HEXO team for their continued commitment to our business and customers,” Charlie Bowman, President and Chief Executive Officer of HEXO, said in a news release. “We are excited for all that is ahead as HEXO enters its next chapter as a part of Tilray, and we wish the HEXO and Tilray teams nothing but the best as they build a stronger Canadian platform that leverages our complementary portfolios of industry-leading brands.”
HEXO Corp. stock chart – May 2023 – June 2023.
In its Q3 2023 filing, HEXO reported a total net loss before tax of C$129.7 million, bringing accumulated losses since 2016 to more than C$2 billion.
HEXO is a licensed producer of innovative products for the global cannabis market. Its brands include Redecan, UP Cannabis, Original Stash, 48North, Trail Mix, Bake Sale and Latitude.
Tilray Brands is a leading global cannabis lifestyle and consumer packaged goods company with operations in Canada, the United States, Europe, Australia and Latin America.
HEXO Corp. (HEXO) opened trading at $0.91 per share.
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