Business
Righting a Canadian cannabis company: Q&A with Hexo CEO Charlie Bowman
Canadian cannabis producer Hexo Corp. spent more than 1.2 billion Canadian dollars ($935 million) to acquire three other producers in 2021: Redecan (CA$925 million), Zenabis (CA$235 million) and 48North (CA$50 million).
After those acquisitions, Hexo found itself deeply in debt, with a ravaged share price that endangered its Nasdaq listing (HEXO) , its auditor warning that the company might not be able to stay afloat and an activist investor demanding change in the wake of years of quarterly losses.
Founding CEO Sébastien St. Louis left Hexo in 2021, and his successor, Scott Cooper, stepped down in April.
Hexo’s latest CEO, Charlie Bowman, has previous experience in the specialty chemical industry.
Bowman started with Hexo in February 2021 as general manager of U.S. operations before becoming chief operating officer in January 2022. He was appointed CEO in late April.
He leads a much smaller Hexo: The Quebec-based company listed 1,277 employees as of July 2021, and Bowman said it now has 570 employees in Canada and the U.S.
Earlier this year, the company signed an alliance with competitor Tilray, with Tilray acquiring Hexo’s debt in exchange for the option to take a significant stake in Hexo and cooperation between the two.
Bowman doesn’t rule out an eventual acquisition by Tilray.
MJBizDaily spoke with Bowman about his plans to get Hexo back on solid ground.
Hexo lost nearly a billion Canadian dollars in the first nine months of its fiscal year (through April 30), and has withdrawn financial guidance for investors. Your strategic plan includes cost-cutting, streamlining and maintaining disciplined pricing. Can you elaborate on that plan?
There was a debt structure that was unsustainable; that’s now been addressed with the Tilray debt purchase that went through.
There was also an excessive amount of SG&A (selling, general and administrative expenses) and third-party consultants that were on board. We’ve done a tremendous job of getting those under control.
There wasn’t a real clear pathway to get to EBITDA (earnings before interest, taxes, depreciation and amortization) positive and then, from there, to actually start driving into earnings.
So the first thing that I had to do was actually to establish some form of a bedrock, look at what the foundation of the company could really grow from and where it had distinct competitive advantages.
For us, it was around cultivation and some very unique products that were in the market, like the Redee straight-edge (pre-roll from Redecan).
Some of our brands, (like value brand) Original Stash, had some incredible brand loyalty.
But we had to rightsize that organization. Instead of trying to put out 14 or 15 brands, we had to lock it down to four. And then you just shred the rest, and you move fast.
At one point, Hexo had in excess of 405 net tons of capacity on cannabis, which was much more than what we needed.
The plants weren’t operating efficiently.
As a result of that, we had to bring those facilities down so that you could still maintain your market share and your leading position.
But what you also had to do is to get to where you had your cost of goods and manufacturing down, to where you could actually start turning cash out of the operations as opposed to burning cash.
The second element is around … (ensuring) that we had the debt structure to where it was much more favorable.
In addition to that, it also freed up cash to actually operate the business.
Before you were CEO, Hexo bought 48North, Zenabis, and Redecan. Since then, Hexo has been struggling financially and Zenabis has filed for creditor protection. In hindsight, were those three acquisitions a mistake?
Well, you never walked in somebody else’s shoes and then judge it – you have to take a look at where we are now.
And you can look in the rearview mirror and say, “Maybe this should have been done, maybe that should have been done.”
I think you can do that (for) just about anything.
What Zenabis brought to the table, and its uniqueness, we had that inside of Redecan.
So it made sense to put (Zenabis) into bankruptcy protection. And it’s going to have a really good home when it comes out.
The uniqueness of the Redecan brand, some of the areas around topicals for skin care that 48North had … there’s real synergy with those.
(Redecan’s Redee pre-rolls are) the leading product in every province, in every market. Whether it’s male or female, it’s the preferred pre-roll to be purchased.
So that was an outstanding purchase, as well as the cultivation techniques that we were able to pick up – not just in Hexo but in 48North and in Redecan.
You never know what the mindset was when people went into the acquisitions and the buying.
But I can say, for the integration and the value we’re bringing out, we’ve carved out those bits that are unique and give us competitive advantage, and that’s what we’re focusing on.
Hexo currently owns a number of nonoperational facilities in Canada. We’ve seen a trend where the largest Canadian cannabis companies have had to sell off unnecessary facilities for less than they spent. Should we expect more discount cannabis facility sales from Hexo in the future?
We’ve taken the impairments … we’ve realigned the balance sheet. So the balance sheet’s clean now.
We do have facilities that are for sale, but we’ll get our fair market value out of those facilities and be able to move on, just as we also have been able to rightsize our facilities to where our cost of goods have gone down.
The amended debt purchase deal with Tilray puts Tilray in a position to take a 48% stake in Hexo, which looks a lot like it could acquire Hexo down the line. How are you preparing for that possibility?
We’re not operating as one company. There’s rules of engagement to ensure that things aren’t shared, and there’s firewalls up in several different areas. They are an investor into our business.
Tilray is a great company. They’re a brand company.
We’re not a brand company. We’re a cannabis company, we are a cultivation company. We have some really strong brands, but we’re not a brand company.
We focus in on what we do best, and that’s in the areas of cultivation, that’s in getting our operations to where it’s rightsized, so it’s throwing off cash.
From the standpoint of taking a look at the new products that (are) coming out, they’re all based on areas of unique experience for cannabis.
If Tilray one day decides to acquire us, they’re going to acquire the best cannabis company in the world.
If they don’t, then they’ve made a great strategic investment to get a return on their business as our stock goes up.
In the meantime, the debt purchase deal with Tilray helps keep Hexo going. How has that deal changed how you’re doing business?
Oh, no question. The way (Hexo’s debt) was structured to afford to acquire those companies was not sustainable, so it had to be reworked.
What it allows us to do is, they have some very strong areas which we can tap into for shared services. And in return for that, I can remove (those costs) within our organization.
We run our own show, we run our own operations … it allows us to get some synergy, without them acquiring us.
The debt structure, yeah, it was tough.
It was burning up so much cash, and the way in which that debt structure was being paid, that we would pay in shares, and then those shares would be basically placed into the marketplace … it drove our stock down.
So we had to get rid of that debt structure and the way those payments were going.
The good news (is) that’s now been resolved.
We come back to those specialty chemical (industry) principles, which enable us to take what is the unique structure function – in this case, it’s around cannabis – and how you deliver that to your customers, to where you become part of their solution and part of their uniqueness to the marketplace.
And so far, the market has responded extremely well. We had a good Q4.
You’re making yourself available to the media now, even at a time when Hexo is perhaps not getting the most positive media attention. As CEO, what’s your thinking behind that media strategy?
Hexo went under a blanket for a period of time, which was not conducive.
A lot of changes were going on. If you don’t frame the narrative, somebody frames it for you.
We have to start sharing the message, and let the spears and the arrows be chucked toward you – that goes with the job.
But the other side of it is, this is a really sound company now.
This interview has been edited for length and clarity.
Source: https://mjbizdaily.com/how-ceo-charlie-bowman-plans-to-get-hexo-corp-cannabis-on-solid-footing/
Business
Jio’s 1,600-Satellite LEO Constellation Gets Technical Green Light
Reliance Jio has crossed a significant milestone in its space connectivity ambitions after its proposal to deploy a Low Earth Orbit (LEO) satellite constellation of around 1,600 satellites received a positive technical assessment from the Indian National Space Promotion and Authorisation Centre (IN-SPACe).
The evaluation, conducted jointly by IN-SPACe, the Indian Space Research Organisation (ISRO), and the Wireless Planning and Coordination (WPC) wing of the Department of Telecommunications, reportedly concluded that Jio’s proposed system meets the required technical standards and is comparable to leading global satellite broadband networks.
India’s Indigenous LEO Satellite Vision
Under the proposal, Reliance Jio plans to deploy between 1,600 and 1,650 satellites in Low Earth Orbit at an altitude of around 650 kilometres.
The planned constellation is expected to provide high-speed satellite connectivity across India, with approximately 32 satellites visible from any location at a given time. The company aims to roll out the network within the next two to three years, subject to regulatory approvals.
According to industry estimates, the satellite system could deliver 4.5 to 5 terabits per second (Tbps) of total data capacity, making it one of the largest satellite broadband projects proposed in India.
The project is expected to require an investment of $10–15 billion (approximately ₹95,000 crore to ₹1.42 lakh crore), reflecting the scale of infrastructure needed for satellite manufacturing, launches, ground stations, and user terminals.
Regulatory Process Moves Forward
Following the successful technical review, the proposal is expected to move into the next phase of regulatory approvals.
The government may now assist Jio in securing orbital slots, coordinating spectrum usage, and filing applications with the International Telecommunication Union (ITU), the global body responsible for managing satellite orbit and frequency allocations.
Obtaining orbital rights remains a critical step, as Low Earth Orbit has become increasingly competitive due to the growing number of satellite broadband projects being planned worldwide.
Officials also indicated that the proposed satellite architecture has been designed to coexist with future Indian LEO constellations, allowing multiple domestic operators to share orbital resources efficiently.
Broadband, Mobile Connectivity, and Strategic Applications
Jio plans to use the satellite network to provide a range of communication services, including satellite broadband, mobile backhaul, enterprise connectivity, and direct-to-device (D2D) satellite communication, particularly in remote and underserved regions where conventional telecom infrastructure is limited.
The company also intends to establish 20 to 22 ground stations across India to support network operations.
Apart from commercial telecommunications, officials have highlighted the project’s potential strategic importance. A domestically developed satellite constellation could strengthen India’s communication infrastructure, reduce dependence on foreign satellite operators, and support national security requirements.
Reports suggest preliminary discussions are underway regarding the possibility of integrating defence-related payloads into some satellites, enabling both civilian and strategic use.
Major Step for India’s Space and Telecom Sectors
Industry analysts view the technical clearance as an important milestone in India’s expanding private space ecosystem. If Jio secures the remaining regulatory approvals and international orbital clearances, the project could become the country’s first large-scale indigenous LEO satellite broadband network.
The initiative also aligns with India’s broader efforts to expand digital connectivity while strengthening its presence in the global satellite communications market.
Business
Alleged Crores Pharma Scam Mastermind Arrested from Surat
After evading law enforcement for nearly 13 years, an accused linked to a large-scale pharmaceutical fraud case has been arrested by Delhi Police from Surat, Gujarat. The suspect is alleged to have orchestrated a series of financial scams involving fake identities, forged documents, and dishonoured cheques used to procure high-value pharmaceutical raw materials.
Authorities say the accused, identified as Himmat Singh Lodha, is believed to have defrauded multiple pharmaceutical companies in Delhi of goods worth approximately ₹98 lakh before disappearing and remaining underground for years.
Fake Business Deals and Dishonoured Cheques Used in Fraud
Investigators claim the accused posed as a legitimate pharmaceutical trader and placed bulk orders for expensive drug ingredients, offering post-dated cheques as payment security.
In one documented case from 2013, he allegedly obtained around 550 kilograms of Gliclazide, a diabetes-related pharmaceutical ingredient, valued at over ₹26 lakh. When suppliers attempted to encash the cheques, they were reportedly returned with the remark “account closed.”
Following the transaction, the accused allegedly vacated his office and rented residence and disappeared without settling payments. He was later declared a proclaimed offender in 2016 after repeatedly failing to appear before court proceedings. Authorities had also issued a reward for information leading to his arrest.
Multiple Identities and Repeated Fraud Pattern
Police investigations further link the accused to another cheating case dating back to 2012, where he allegedly used a fake identity, “Kailash Jain,” to obtain a large consignment of Ambroxol HCL, a pharmaceutical compound used in cough medications. The value of that consignment was estimated at around ₹72 lakh.
Officials believe the accused followed a consistent modus operandi—posing as a credible businessman, securing high-value goods on deferred payment terms, and then disappearing after delivery while shutting down business operations.
Investigators suspect that forged business records, fake company credentials, and fabricated financial histories were used to build trust with suppliers and gain access to expensive raw materials.
Multi-State Surveillance Leads to Arrest in Surat
A special Crime Branch team tracked the accused through coordinated surveillance efforts across multiple cities, including Mumbai, Ahmedabad, and Surat. After nearly a month of technical monitoring and intelligence gathering, officials located and arrested him from a residential area in Surat.
Authorities also revealed that the accused had been involved in property-related activities while staying under the radar to avoid detection.
Growing Threat of Corporate Identity Fraud
The case highlights a rising trend of organised financial fraud targeting industries that rely heavily on trust-based transactions and deferred payments. Experts note that criminals increasingly exploit gaps in corporate verification systems by using fake GST registrations, temporary offices, and forged documentation to appear legitimate.
Cybercrime and financial fraud specialists warn that such schemes are becoming more complex with the widespread availability of digital business tools, making it easier to create convincing but fraudulent corporate identities.
Experts Urge Stronger Due Diligence in High-Value Transactions
Experts, including former IPS officer and cybercrime specialist Prof. Triveni Singh, emphasize the need for stricter verification procedures in commercial dealings. He noted that relying solely on paperwork or digital business profiles can expose companies to significant financial risk.
Authorities and industry experts recommend physical verification of business operations, bank account validation, and detailed background checks before engaging in high-value or deferred-payment transactions—particularly in sectors like pharmaceuticals, where single consignments can involve transactions worth crores.
Business
EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices
A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.
Investigation Under Digital Markets Act Gains Momentum
The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.
Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.
Industry Groups Demand Swift Action
Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.
Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.
In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.
Google Denies Allegations
Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.
However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.
Potential Billion-Euro Penalties
If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.
Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.
Wider Implications for Big Tech
The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.
A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.
As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.
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