HEXO Corp (TSX: HEXO; NASDAQ: HEXO) ("HEXO" or the “Company"), a leading producer of high-quality cannabis products, today provided an update on its previously announced strategic plan, designed to solidify HEXO’s position as the number one cannabis company in Canada by recreational market share, with the goal of becoming cash flow positive from operations.

The Company is announcing that it will close its Belleville facility and transition its operations to other sites to further streamline operations and capitalize on production efficiencies.

“After an extensive review of site capabilities, we have identified this operational closure and transition as an opportunity to further optimize our network,” said HEXO Acting Chief Operating Officer, Charlie Bowman. “Our decision is designed to leverage other sites with available infrastructure and capabilities to improve production outputs while significantly reducing costs across our entire network. This is a critical next step for HEXO as we continue to make strides towards becoming cash flow positive from operations.”

As part of the transition, all manufacturing machinery and equipment currently located at HEXO’s Belleville facility will be transferred to other sites. A plan has been developed to facilitate this transition and ensure there is no impact on production or shipments. The transition is scheduled to be complete by the end of July 2022.

“I would like to thank our Belleville community partners and employees for their invaluable contributions to HEXO’s growth and success,” said HEXO President and CEO, Scott Cooper. “This was a very difficult decision, but it is key component of executing on our strategic plan, and one that we believe best positions HEXO for profitable growth.”

HEXO is working closely with employees to reduce the impact of this decision, including offering career counselling and other transitional services. Approximately 230 employees will be impacted by this announcement. The Truss Beverage Co. operations are not impacted by this transition and will continue to operate out of the Belleville facility