GATINEAU, Que. — Hexo Corp. says it is in the process of destroying cannabis that was grown without a licence at a facility it acquired in Niagara, Ont., as part of its purchase of Newstrike Brand Ltd.

The Quebec-based company says it discovered in July, soon after the Newstrike deal closed, that cannabis being grown in Block B of the cultivation facility was not licensed.

Hexo says it immediately ceased cultivation and production in the unlicensed space and notified Health Canada.

It says the regulator was satisfied with Hexo's actions, including withholding and destroying all the cannabis grown in the block.

The company says Health Canada had inspected the facility in February and made no observations about the space in question, reinforcing Hexo's assumption that it was a licensed space.

The facility is no longer in operation after Hexo announced on Oct. 24 that it was winding down the Niagara operations as part of its downsizing effort.

The decision involves cutting 200 jobs including the elimination of some executive positions and the departures of the chief manufacturing officer and chief marketing officer.

This report by The Canadian Press was first published Nov. 15, 2019.

Companies in this story: (TSX:HEXO)

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