Hexo Corp. has 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 Ltd. last year.
The sale of the greenhouse 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 press 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:
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.
