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Pot producer HEXO to revamp board on activist investor push -Breaking

by Mike Robinson

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© Reuters. FILEPHOTO: An employee shows cannabis buds at Hexo Corp’s Gatineau facilities, Quebec, Canada. September 26, 2018. REUTERS/Chris Wattie

(Reuters) – Canadian pot producer HEXO(NASDAQ:) Corp announced Tuesday that it will refresh its board as part of a deal made with Adam Arviv, activist shareholder, and Kaos Capital, his fund.

Arviv indicated earlier in the month that he intended to name five independent directors to Hexo’s board at this month’s shareholder meeting. He did so to address concerns regarding Hexo’s falling share price.

Hexo’s shares fell by 6.49% in morning trading. This brings their losses for the year to close to 18%.

At Hexo’s shareholders meeting, March 8, seven new directors from the board will be up for election.

Arviv’s Fund, currently holding a roughly 2% share in the company, will nominate Mark Attanasio, Rob Godfrey, and retains the right to nominate an eighth member.

A media report last year claimed Sebastien St-Louis (Hexo) was removed from the role of chief executive officer. Arviv had alleged that St-Louis had leveraged the company too much to fund deals to buy cannabis operators.

Hexo said this month it would eliminate 180 jobs. This will result in an annual savings of $15 million. It also seeks to cut expenses 30% by 2023.

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