Quebec cannabis producer HEXO has acquired Oakville-based Newstrike, parent of Up Cannabis Inc., in a transaction valued at $263 million. This includes 470,000 sq. ft. in production space and a branding relationship with members of The Tragically Hip.
With the transaction, HEXO’s production space goes up to 1.8 million sq. ft. in Ontario and Quebec, with an estimated cannabis production of 150,000 kg annually. The producer also has a 579,000 sq. ft. manufacturing and product development centre in Belleville, Ontario.
Combined, HEXO and Newstrike have established distribution agreements in eight provinces including Ontario, Quebec, British Columbia, Alberta, Saskatchewan, Manitoba, Nova Scotia, and Prince Edward Island.
“We’re extremely proud of our record of execution, and today are committing to achieving over $400 million in net revenue in 2020,” says Sebastien St-Louis, CEO and co-founder of HEXO Corp.
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“This is the most compelling combination we see in the Canadian cannabis sector. Our strength in Ontario and English Canada clearly complements HEXO’s strong position in Quebec and creates an industry leader,” adds Jay Wilgar, CEO of Newstrike.
Upon completion of the transaction, existing HEXO and Newstrike shareholders would own approximately 86 per cent and 14 per cent of the pro forma company, respectively.
As one of the largest licensed cannabis companies in Canada, HEXO Corp also has a foothold in Greece to establish a Eurozone processing, production and distribution centre.
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