On the heels of recent deals, Hexo Corp. (TSX: HEXO) (Nasdaq: HEXO) will be closing the doors to three production sites it acquired from buying Zenabis Global Inc. and 48North Cannabis Corp.
In a statement Tuesday, the firm says about 155 employees will be “impacted” by the shutdowns in a move that will centralize operations at its core facilities early next year.
Hexo says the decommissioning is part of its integration plan following the two acquisitions and the Redecan one.
The Kirkland Lake, Ont., and Brantford, Ont. facilities, gained through the 48North acquisition, will be shuttered Jan. 31, 2022.
And the Stellarton, Nova Scotia, facility acquired through its Zenabis deal, will shut down Feb. 28, 2022.
“These facilities are not considered material to Hexo’s integrated operations,” reads the statement.
While 155 employees are affected by the decision, Hexo says it’s working to “reduce the impact” by relocating some employees to roles at the core facilities. For those who can’t relocate, the firm says it’s supporting them with their job hunt.
It was a difficult decision to close the facilities, but a “key component” to the integration plans, said president and CEO Scott Cooper.
“This decision is key to achieving our immediate priority of integrating our recent acquisitions to drive growth and profitability through the commercialization of cannabis consumer packaged goods products. We are confident that our core sites, combined with strategic partnerships, will ensure sufficient supply of high-quality cannabis to meet demand.”
On Tuesday, company stock dropped 3.5 per cent to US$1.52 on the Nasdaq.