Hexo joins the top 3 in the Canadian recreational market after acquiring Redecan

Hexo, a cannabis producer based in Gatineau, Quebec, has announced the acquisition of its Canadian counterpart Redecan for 925 million $CA in cash and shares, on the third deal in the space of a few months.

The Redecan acquisition, announced early last Friday, will propel Hexo into the top 3 of the Canadian adult-use cannabis market, joining rival producers Canopy Growth and Tilray.

«The Canadian adult-use industry continues to evolve at a rapid pace, and we're at the forefront of this change,« says declared Sébastien St-Louis, CEO and co-founder of HEXO, in a press release.

«We will also be able to provide consumers across Canada with a diverse and innovative range of high-quality products, with an enhanced brand offering that will allow us to better compete with other LPs [ndlr: licensed cannabis producersWe're also positioning the company for future expansion in the United States,» he added.

This is HEXO's third major transaction this year, following the acquisition of Zenabis in February for 235 million $CA, and 48North Cannabis Corp. in early May for 50 million $CA.

Future number one in the adult-use cannabis market

With these three operations, HEXO will be number one in terms of market share in the adult-use cannabis sector in four of its main markets: British Columbia, Alberta, Ontario and Quebec.

Pete Montour, co-founder of Redecan, welcomed the newly announced agreement.

«Joining the HEXO team will enable us to leverage our combined strengths and accelerate our growth in Canada and abroad,« said Mr. Montour. «We look forward to building a world-class organization together.»

Redecan was one of Canada's best-performing cannabis producers in 2020, increasing its market share while many others lagged behind.

Redecan's share of the adult-use cannabis market rose from 5.1 % at the start of 2020 to 6.9 % in the first quarter of this year, according to reported data by MJBizDaily. Hexo also performed well in 2020, doubling its share of the overall market from 2.9 % to 6 %.

Edit: We had originally headlined «Hexo takes the lead in the Canadian recreational market after Redecan takeover», which did not reflect the state of the overall Canadian market. The title and article have been modified accordingly.