Cannabis producer Hexo continues to bolster its financial warchest as it gears up for expansion into the U.S., announcing this week plans to sell up to $150 million worth of new shares over the next two years.
The Ottawa-based firm says it’s launching an at-the-market offering that will see it sell newly issued shares on the Toronto and New York stock exchanges through brokers A.G.P./Alliance Global Partners and BMO Capital Markets in the U.S. and BMO Nesbitt Burns in Canada.
Under the ATM offering, Hexo can issue the shares at its discretion, with the program slated to end no later than June 7, 2023.
The company says it plans to use the proceeds from the offering to fund its expansion efforts south of the border, including the potential acquisition of a production facility in Colorado. Hexo says it also wants to upgrade its plant in Belleville, where it bottles cannabis-infused drinks in a joint venture with brewing giant Molson Coors.
The new offering is a supplement to Hexo’s recently filed short-form base prospectus that will allow the firm to fast-track the process of issuing up to $1.2 billion worth of shares, warrants and other units to raise capital.
Hexo co-founder and CEO Sebastien St-Louis said recently the company is seeking “maximum flexibility” to make acquisitions and sign partnerships with players in related industries as it looks to extend its footprint in Canada and south of the border.
The funding push comes just a few months after Hexo announced a deal to acquire competitor Zenabis Global Inc. in a $235-million deal that will give the Ottawa firm a European foothold and strengthen its domestic business.
Hexo reported a loss of $20.8 million in its most recent quarter as its revenue nearly doubled compared with a year earlier. Net revenue totalled nearly $32.9 million, up from $17 million in the same quarter a year earlier.