Under the magnifying glass of the authorities in Quebec and Ottawa in the wake of the acquisition of a company linked to an individual who would have links with members of the Hells Angels, the cannabis producer Hexo is no longer subject to audits. from Health Canada – responsible for licensing.
The Gatineau-based company, at the heart of a strategic reorganization to resolve its financial difficulties, recently obtained this confirmation from the Department. The information was not released publicly. “At this time, we consider that our review is complete and we do not intend to ask you for additional information,” read correspondence from Health Canada that Press was able to consult.
Last November, the Journal of Montreal had revealed that Ontario producer Redecan, bought by Hexo last May for $ 925 million in cash and shares, counted the family of Ontario entrepreneur Josh Hill among its shareholders.
The daily had published photos showing Mr. Hill with men identified by the report as members of the Hells Angels. Another photo showed Mr. Hill surrounded by Peter James, currently a director of Hexo, and William Montour.
Hexo is one of the main suppliers of the Société québécoise du cannabis (SQDC).
History review
Under the federal regulatory framework surrounding cannabis, the directors and officers of a marijuana producer must undergo a criminal background review conducted by the Royal Canadian Mounted Police (RCMP) to prove that they have not. no ties to the underworld. They must also obtain security clearance. “Hexo is very pleased with the conclusion of Health Canada’s audits,” the company said in a statement Tuesday. This is testimony that shows that we operate to the highest standards of regulatory compliance. ”
Mr. Hill was the head of one of the numbered companies that were among the shareholders of Redecan prior to its acquisition by Hexo. If the federal authorities had detected any irregularities, the producer’s licenses could have been revoked. The details surrounding the steps taken by Health Canada were not specified.
In Quebec, the Permanent Anti-Corruption Unit (UPAC) carries out checks following a request from the Autorité des marchés publics (AMP) – responsible for certificates that allow companies to bid on public contracts. Hexo holds a certificate to do business with the SQDC.
The struggles of the marijuana producer, which made three recent acquisitions (Zenabis, Redecan and 48North), prompted a major reorganization last fall. Its co-founder and CEO, Sébastien St-Louis, as well as the COO, Donald Courtney, have left. Scott Cooper, who was previously the head of Truss Beverages, a joint venture between Molson Coors Canada and Hexo, took the reins.
The company lost 117 million in the first quarter ended Oct. 31. The new management announced, last month, a strategic plan to reduce costs and streamline operations, among others. Hexo is listed in the Quebec Lobbyists Registry since it would like to obtain a financial boost from the State. The Legault government has ruled out this scenario for the moment.
On the Toronto Stock Exchange on Tuesday, the cannabis producer’s share closed at 91 cents, up 3 cents, or 3.4%. The title had reached nearly $ 42 in April 2019.