(This story has been updated to correct the timing of Hexo’s shelf prospectus.)
Hexo Corp. entered purchase and sale agreements for a 50,000-square-foot cannabis production facility in northern Colorado, marking a step forward for the Canadian producer’s U.S. ambitions.
Hexo’s first facility in the United States involves a wholly owned U.S. subsidiary, according to a Friday news release.
The facility “is zoned for production of a full range of cannabinoids and offers multiple operational capabilities,” said Hexo, which is headquartered in Ottawa, Ontario.
It “will provide Hexo with the necessary infrastructure to begin production and enable the company to continue expanding our joint venture with Molson Coors to create Truss CBD-infused beverages, while also creating the necessary capacity to support future, non-beverage CPG partnerships,” Hexo CEO Sebastian St. Louis said in a statement.
Hexo’s news release offered no details about the cost of the facility or in which city it will be located.
However, a Hexo shelf prospectus dated May 7 describes the company’s attempts to acquire and retrofit a Colorado production facility, and the company confirmed to MJBizDaily that the facility referenced in the prospectus and the facility announced Friday are the same.
According to the disclosure document, Hexo expected to pay approximately $6 million to acquire the Colorado facility and $16.5 million-$49.5 million for retrofitting and improvements.
The facility will be used by Ontario-based Keystone Isolation Technologies USA (KIT USA), a Hexo joint venture with British Columbia extraction technology company Chroma Global Technologies, according to the prospectus.
“KIT USA will allow for in-state, Hexo-controlled cannabis extraction activity to support the manufacturing of CBD beverages and future products in the U.S.,” according to the prospectus.
Hexo’s transaction is expected to close in the fourth quarter.
The company’s shares trade as HEXO on the New York Stock Exchange and Toronto Stock Exchange.