As it embarks on a major expansion push in North America and Europe, Hexo has hired a marketing veteran to shore up its senior leadership team and announced it’s transferring its U.S. public market listing from the New York Stock Exchange to the Nasdaq.
The Ottawa-based cannabis producer announced the change in listings late last week. The move still requires Nasdaq’s approval, but Hexo said it expects the transfer to take place after markets close on Aug. 23.
The company’s shares would begin trading on the Nasdaq the next day and will continue to be listed under the HEXO symbol. All investors’ shares will be automatically shifted from the NYSE to the Nasdaq.
“Transferring our U.S. listing to Nasdaq allows us to generate shareholder value through greater cost savings on our path towards profitability, while joining our peers on a leading global exchange,” Hexo co-founder and CEO Sebastien St-Louis said in a statement.
“We are grateful for the partnership and support that the New York Stock Exchange has provided to us, allowing us to be one of the first publicly traded cannabis companies in the U.S.”
Hexo’s shares began trading on the New York Stock Exchange in July 2019 after graduating from the NYSE American, a smaller exchange owned by the NYSE’s parent company. Last year, Hexo – which also trades on the Toronto Stock Exchange – was forced to consolidate its shares on the NYSE after they fell below $1 and no longer met the exchange’s listing standards.
New chief commercial officer
The firm followed that up with more big news on Monday, announcing that veteran branding expert Valerie Malone would join Hexo as chief commercial officer effective Sept. 6.
The graduate of the University of New Brunswick has spent nearly two decades in senior marketing roles with several high-profile organizations, including PepsiCo Canada, appliance manufacturer Whirlpool, LG Electronics and LIXIL Water Technology. Malone will oversee Hexo’s sales, marketing and product development teams.
In a statement on Monday, St-Louis said Malone’s hiring will accelerate the firm’s push to become a “top-three global cannabis products company.”
Also Monday, the company announced that chief development officer James McMillan – a longtime member of its C-suite who played a key role in developing Hexo’s partnership with brewing giant Molson Coors – was leaving the firm.
The moves come amid Hexo’s aggressive growth campaign fuelled by a string of major acquisitions and deals aimed at expanding its footprint.
In February, it said it would spend $235 million to buy Zenabis Global and its Namaste, Re-Up, Blazery and Founders Reserve brands.
Leading market share
Analysts said the Redecan deal would give Hexo a 17 per cent share of the Canadian market, ahead of Tilray with 15.5 per cent, Smiths Falls-based Canopy Growth at 14 per cent and Aurora Cannabis at 6.5 per cent.
The deals are meant to fortify Hexo's portfolio so it's ready to compete in the event that the U.S. federally legalizes cannabis.
The U.S. has been edging towards national legalization for months and is exploring a series of regulatory changes that would make it easier for cannabis companies to bank and operate in the country.
To strengthen its foothold south of the border, Hexo finalized a deal in June to acquire a 50,000-square-foot cannabis production facility in northern Colorado.
The company will use the facility to give U.S. consumer packaged goods brands access to Hexo's technology, which it's been using to drive down the costs of cannabis in Canada and create more products priced at the same levels of pot sold through the illicit market.
In addition, Hexo is eyeing a major move into Europe to tap into that continent’s medicinal cannabis market. The firm is now licensed to sell cannabis products to the entire European Union out of a facility in Malta.
Hexo reported a net loss of $20.7 million in the quarter ending April 30. The company’s shares closed down 16 cents to $4.26 on the Toronto Stock Exchange Monday.