Hexo Supply Agreement Quebec

Hexo Supply Agreement Quebec

In mid-March 2019, HEXO announced the acquisition of Newstrike Brands for approximately $197 million. Under the terms of the agreement, Newstrike shareholders will receive 0.06332 hexo shares for each Newstrike share. In return, HEXO benefits from a strong increase in its capacity and a significant increase in sales. We have taken important steps to ensure that we are well positioned to meet future demand from CBD derivatives markets in Canada and around the world. This also means that we have ensured a large and constant supply of quality hemp for the processing of products in our factory being developed in Belleville. We are in the process of procuring technologies to clean hemp outside of harmful pesticides that we believe give us an advantage to bring high-quality extracts to the United States. We have 8 varieties of hemp with high CBD content in tissue culture, in partnership with the University of Guelph, while laying the groundwork for development towards a preliminary contract. This press release contains forward-looking information based on certain assumptions, which involve known and unknown risks and uncertainties, as well as other factors that could cause actual events to differ materially from current assumptions and expectations. Examples of forward-looking information include the company`s estimates of the quantities of products it will supply under the supply agreement with the SAQ, its assumptions regarding the product line, the assumption that the agreement will remain in effect for its entire duration and will depend on the adoption by governments of the necessary regulatory conditions. These statements should not be read as assurances of future performance or results. These statements include known and unknown risks, uncertainties and other factors that may cause actual results, performance or successes to differ materially from those implied in such statements, including the actual quantities of products supplied by the Company under the Agreement, the Company`s ability to produce the estimated quantities of products and the actual mix of products to be supplied: Products and their pricing. A more complete discussion of the risks and uncertainties facing the Company can be found in the Company`s annual disclosure form and ongoing disclosure documents available on the SEDAR website under www.sedar.com. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only at the time of this press release.

The Company discies any intention or obligation to update or revise any forward-looking statements based on new information or future events or for other reasons, except as required by law. Hydropothecary will host a conference call for financial analysts and shareholders today at 8:30 a.m. EST to discuss the SAQ`s delivery agreement. The identification number is 1-(866) 521-4909, access code is 1776268. A recording of this call will then be available on our website www.thcx.com. HEXO estimates its market share for adults in Quebec at 30%, based on publicly announced supply agreements, and during the five-year period of its supply agreement, management estimates that it could achieve sales of approximately C$1 billion. Finally, just one year and two weeks after signing its groundbreaking supply contract with Quebec City, HEXO announced that it and Valens GroWorks (OTC: VLNCF) had entered into a two-year extraction agreement for cannabis and hemp. The agreement is subject to the condition that the Federal State and the Länder take charge of the necessary regulatory framework. HEXO, known last year at this time as “Hydropothecary” (Hydropothecary is HEXOs` leading medical cannabis brand), really had its coming out party in April 2018 when it announced the largest provincial delivery deal in history…

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