HEXO Corp. Files Circular for Special Meeting of Shareholders to Approve Arrangement With Tilray Brands, Inc.

HEXO Corp. (TSX: HEXO; NASDAQ: HEXO) (“HEXO” or the “Company”) announced today the mailing of the management information circular (the “Circular”) for the special meeting (the “Meeting”) of the common shareholders of the Company (the “Shareholders”), to be held virtually on June 14, 2023 at 10:00 a.m. (Eastern Time) in accordance with an interim order of the Ontario Superior Court of Justice (Commercial List) obtained on May 10, 2023. The Circular and related materials have also been filed under HEXO’s profiles on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov).

The Meeting has been called for Shareholders to vote on the previously announced arrangement agreement (the “Arrangement Agreement”) with Tilray Brands, Inc. (“Tilray”), whereby Tilray will acquire all of the issued and outstanding common shares of the Company (the “Company Shares”). Shareholders will receive 0.4352 of a share of Tilray common stock (the “Tilray Shares”) for each whole Company Share held (the “Arrangement”).

The Company’s Board of Directors (the “Board”) (excluding certain conflicted directors) and the special committee comprised solely of independent directors of the Company (the “Special Committee”) unanimously recommend that Shareholders vote FOR the Arrangement at the Meeting. The Board and the Special Committee have determined that the Arrangement, as well as the previously announced and concurrently signed Waiver and Amendment Agreement entered into by the Company and Tilray (the “Waiver and Amendment Agreement”), are in the best interests of the Company and that the Arrangement is fair to Shareholders.

The Circular includes full details of the recommendations of the Board and the Special Committee and the Arrangement, including the various factors considered by the Board and the Special Committee in making their respective recommendations. The Circular also includes the formal valuation (the “Formal Valuation”) and fairness opinion (the “Fairness Opinion”) of the independent valuator selected by the Special Committee, Haywood Securities Inc. (“Haywood”), an independent Canadian investment bank with strong cannabis industry experience.

Specifically, Haywood concluded as follows:

• the fair market value of the Company Shares is nil ($0), and
• the consideration to be received by Shareholders pursuant to the Arrangement is fair, from a financial point of view, subject to the assumptions, limitations and qualifications contained in the Fairness Opinion.

Shareholders are advised to consult the Circular for a more detailed list of the various factors considered by the Special Committee and the Board in making their respective determinations and recommendations and to carefully review the risk factors, the Formal Valuation, the Fairness Opinion and the other details described in the Circular in considering whether or not to vote in favour of the Arrangement.