In preparation for its listing this week on an American stock exchange, Hexo (TSX:HEXO) announced Tuesday it intends to raise $50 million to fund its expansion and product development plans.
Hexo said this week it’s filing an update to a prospectus dated Dec. 14 of last year. The final offering will see the Gatineau pot producer list additional common shares on both the Toronto Stock Exchange and the NYSE American, the small-cap U.S. exchange that Hexo got the green light to trade on last week. Hexo is expected to begin listing on the NYSE American as of Wednesday.
Hexo’s offering will be underwritten by CIBC World Markets and BMO Capital Markets and includes a 15 per cent over-allotment option.
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The local pot firm said in a statement it will use the funding to finance its global expansions – Hexo announced plans to tackle the European market from Greece last year – and R&D on new products. The company took another step towards a novel line of cannabis products with its announcement last week that Veronique Hamel will join the firm as its new chief innovation officer to oversee R&D efforts.
Hexo also announced at its annual general meeting last week that chief financial officer Ed Chaplin will step down in the near future as the company searches for a replacement with experience in global consumer packaged goods.
Shares of Hexo dropped as low as $6.92 – a decrease of more than eight per cent – in early day trading on the TSX Tuesday before rebounding slightly to $7.16.
