Hexo is entering a $65-million credit loan facility with two major Canadian banks, giving the local pot producer extra green to finance its expansions at home and in Ontario.
The Gatineau-based company announced Friday it had signed an agreement with CIBC and BMO for a term loan of $50 million in addition to a $15-million revolving credit facility, both of which mature in 2022. Hexo also has the option to increase the facility by up to $135 million, subject to certain conditions.
The news comes two weeks after Hexo closed a $57.6-million private placement round, which it said at the time was earmarked for global expansions and development of new products.
In a release, the firm says it will put the latest funds towards expansions at its Gatineau headquarters and development of its Belleville “centre of excellence,” where it’s expected to work with large partners on new cannabis-based products. Hexo currently has some 1.3 million square feet of space across Ontario and Quebec and is developing production facilities in Greece to tackle the European cannabis market.
Hexo’s value has grown steadily in 2019, with the pot firm’s shares rising 37.8 per cent on the Toronto Stock Exchange since the start of the year. The company also recently landed a listing on the NYSE American, a small-cap exchange in the United States.
Hexo shares were up a few cents on Friday, trading at $7.26 midday on the TSX.