A Hexo Corp. employee examines cannabis plants in one of the company’s greenhouses, seen during a tour of the facility, October 11, 2018 in Masson Angers, Que.
THE CANADIAN PRESS/Adrian Wyld
A Hexo Corp. employee examines cannabis plants in one of the company’s greenhouses, seen during a tour of the facility in Masson Angers, Que. Hexo let go 100 staff at the Beamsville operation on Thursday.
THE CANADIAN PRESS/Adrian Wyld
The Beamsville operation of cannabis firm Hexo Corp. is closing and 100 staff are out of work.
A Hexo Corp. employee examines cannabis plants in one of the company's greenhouses, seen during a tour of the facility, October 11, 2018 in Masson Angers, Que.
THE CANADIAN PRESS/Adrian Wyld
A Hexo Corp. employee examines cannabis plants in one of the company's greenhouses, seen during a tour of the facility, October 11, 2018 in Masson Angers, Que.
THE CANADIAN PRESS/Adrian Wyld
A Hexo Corp. employee examines cannabis plants in one of the company's greenhouses, seen during a tour of the facility in Masson Angers, Que. Hexo let go 100 staff at the Beamsville operation on Thursday.
Adrian Wyld / The Canadian Press
The Beamsville operation of cannabis firm Hexo Corp. is closing and 100 staff are out of work.
The Beamsville operation of cannabis firm Hexo Corp. is closing and 100 staff are out of work as a result of cost-cutting efforts announced Thursday by the Quebec-based company.
“People in upper in management who got their notice were just as upset as everybody else — everybody was stunned, there was a lot of crying,” said a Beamsville greenhouse worker who did not want to be identified because they are under a “gag order” until severance terms are arranged.
Gatineau-based Hexo said it’s cutting a total of 200 jobs to adjust for expected future revenues and ensure the long-term viability of the firm. It had 822 employees as of April 30, according to a filing from its third-quarter financial results.
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Two greenhouses were in production in Beamsville and two were under construction at the facility on South Service Road.
Those facilities, as well as an indoor cannabis grow-op in Brantford, were originally operated by the Tragically Hip-backed Newstrike Brands before Hexo bought Newstrike and its Up Cannabis products this past May in a $260-million deal.
Hexo chief executive Sebastien St-Louis says this has been his “hardest day,” but he is confident that the company has made “sound decisions to ensure the long-term viability.”
The cuts included the elimination of some executive positions, and the departures of chief manufacturing officer Arno Groll and chief marketing officer Nick Davies.
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The announcement comes after Hexo cut its net revenue forecast earlier this month for the fourth quarter of its financial year, which ended July 31, and withdrew its 2020 outlook, citing factors including slower-than-expected pot store rollouts and early signs of pricing pressure.
On Wednesday, Hexo postponed the release of its fourth-quarter results to Oct. 29 as it announced a $70-million private placement of convertible debentures led by a group of investors, including St-Louis.
A week ago, the company described the persistence of the black market as the reason for its introduction of a low-price strain product at $4.49 a gram as a way to compete. Original Stash was introduced into Quebec cannabis stores in 28-gram packages for $125.70.
Statistics Canada’s “National Cannabis Report” in August estimated that 41 per cent of cannabis use originates from illegal sources.
Hexo’s stock price hit a high of $11.29 in the spring. It closed at $3.29 on Thursday, down six per cent on the day.
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