January 19, 2022 By The Canadian Press
Hexo Corp. says it expects its new strategic plan to reduce selling, general and administrative expenses by about 30 per cent by the end of fiscal 2023.
The Gatineau, Que.-based cannabis company says its plan, which was unveiled last month after its debts mounted and founder left the businesses, will deliver about $175 million in cash over the next two fiscal years.
The company says the plan will generate incremental cash flow of about $37.5 million in fiscal 2022 and an additional $135 million next year.
Hexo plans to achieve these goals by moving away from co-packaging agreements and toward using its in-house production capabilities.
Hexo intends to reconfigure its network of facilities to uncover greater efficiencies and will move vape and distillate production to a site it recently acquired, when it purchased Redecan for $925 million.
The company says it has also sold its 25 per cent interest in the Belleville Complex Inc. to Olegna Holdings Inc. for about $10.1 million, but will continue to lease the facility.
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