Canada’s Economy Keeps Compacting Their Cannabis Growth Due to Too Much Government Regulation

arindambanerjee /
arindambanerjee /

Canada’s rules for growing, harvesting, and selling cannabis have made an absolute mess of marijuana legalization. As more and more organizations fold due to rising costs, horrible taxation, and poor government oversight, Tilray Brands Inc announced on April 10th that they would be taking out Hexo Corp. from the market for $56 million.

After years of losses, increasing competition, and a failed push to grow a foothold in the US has sent Tilray looking for anything they can do to stay afloat. Yet they got a bit of a bargain here. With Hexo having a $73 million market cap, many wonder if the company could be turned around.

Investors on the other hand showed no signs of support, with Hexo plummetting 23% and Tilray shedding 4.7% upon the news. Announced in their third-quarter earnings release, the deal came as a shock to many, especially investors.

Mark Attanasio, Hexo’s chairman released a statement about the sale. “With the recent headwinds in the cannabis industry, our board determined that HEXO shareholders would benefit from being part of Tilray’s diversified business and from the strong plan in place they have to reinforce their industry leadership, continue to strengthen the top and bottom lines, and to drive value creation.”

With Hexo shareholders getting 0.4352 of Tilray common stock for their Hexo shares, many investors feel duped by the companies. As Tilray looks to try and take its failure across the pond to Europe, many see their acquisition of Hexo as another way to thin the herd of mediocre products. The problem is Tilray is poorly ran and can’t even keep their own company stable.

Unlike banks, the feds have no problem letting a cannabis company fail. In the US, Canada, or even in Europe for that matter.