(This story has been updated to reflect that Hexo’s Niagara facility was sold to an undisclosed buyer.)
Hexo Corp. completed the sale of the Niagara, Ontario-based cultivation facility it acquired as part of a 263 million Canadian dollar ($193 million) deal to buy Newstrike Brands last year.
The sale of the greenhouse to an undisclosed buyer fetched approximately CA$10.25 million.
Cultivation was suspended at the Niagara facility in late 2019 as part of a corporate downsizing push.
The decision to sell the facility was made in early March, according to Hexo.
A news release attributed the decision to “an excess of cultivation capacity in the market and estimated forecast demand for cannabis products, as result of slower than expected market development.”
Hexo’s Canadian peers have also been abandoning costly cannabis greenhouses in recent months:
- Canopy Growth recently closed two British Columbia greenhouses.
- Aurora Cannabis sold an Ontario greenhouse at a discount.
- Tilray closed an Ontario facility.
Hexo plans to put the proceeds from the sale towards expanding its facility in Belleville, Ontario, “and for working capital and other general corporate purposes.”
Hexo recently posted a second-quarter net loss of CA$298.2 million.