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Stellarton’s Zenabis plant could soon have new owners.
According to a release issued last week, HEXO Corp. and Zenabis Global Inc. have reached an agreement under which HEXO will acquire all of Zenabis’ issued and outstanding common shares in an all-share transaction valued at approximately $235 million. The deal is subject to shareholder approval.
The transaction was unanimously approved by the board of directors of each of HEXO and Zenabis, and Zenabis’ board of directors unanimously recommended that its shareholders vote in favour of the deal.
In response to questions from The News about how the transaction might impact the Zenabis owned plant in Stellarton, HEXO replied with the following statement:
“The proposed transaction gives HEXO access to licenced capacity to produce approximately 111,200 kg of additional high-quality cannabis annually along with diversified growing and production techniques. The acquisition is subject to a shareholder approval period. During this time, HEXO and Zenabis will work together to develop a transition plan for the integration. We look forward to sharing more information relating to the Stellarton facility and the Zenabis brands as it becomes available.”
Based on HEXO’s and Zenabis’ most recent interim quarterly financial statements and results, and those of the other top licensed producers in Canada, if the deal is finalized, the combined organization would be a top three licensed producer in terms of combined Canadian recreational cannabis sales.
"We are proceeding with this transaction because we believe it should be accretive for our shareholders, and it also positions HEXO for accelerated domestic and international growth while supporting near-term requirements for additional licensed capacity,” said Sebastien St-Louis, CEO and co-founder of HEXO Corp in a release. “HEXO’s growth strategy includes expanding our global presence, and this acquisition is an important step in that direction.”