Earlier this month, a news blurb all of 184 words published by thecannabisstock.com ran with the headline, “HEXO is officially not responsible for the death of thousands of fish in Gatineau,” raising more questions than answers.
HEXO (HEXO.T) tersely responded to an inquiry regarding the events which unfolded this August, saying only “We do not wish to comment further on the dead fish situation.”
For several weeks, several people have been accusing the cannabis producer HEXO for the deaths of hundreds of fish found this summer in the rivers of the Lièvre and the Outaouais.
Although there was no direct link between the death of the fish and the Hexo cannabis greenhouses at Masson-Anger on the edge of the Ottawa River, rumors persisted.
Four separate “fish kill” incidents were recorded on July 8, July 19, July 29 and July 31.
Ottawa River Keeper, a local environmental charity, estimated the fish-related body count resulting from the events in July numbered in the thousands, though a precise number could not be produced.
As the underwater death toll continued to rise, and with no cause immediately available, rumors began to circulate online about what caused the fish deaths, with a number of posts blaming HEXO.
Why aren’t they looking into companies operating by the Lièvre River like Hexo?
— Jo Watier (@kowalat) July 30, 2019
3 cheers for Hexo!! “Here at Hexo, we believe fish have a right to freely swim in the ocean as long as they don’t impede company operations.” https://t.co/XaKVmXOnPb
— Ill-Tempered Sea Bass (@sea_ill) August 16, 2019
In mid-July, necropsies on the dead fish initially indicated a toxic spill was the cause of the fish deaths.
HEXO operates a 10,000 square foot cannabis production facility in Gatineau, and concerns over the facility’s effect on local populations, dorsal-finned or otherwise, have been raised before.
Virgine Roussin, who lives in the nearby community of Masson-Angers, told the CBC “the smell sometimes causes her throat to itch,” and that she had concerns about the “long-term health effects of the emissions.”
Although there has been no definitive conclusion reached on the effects of airborne emissions from cannabis cultivation, Quebec’s Environment Ministry has since determined a hydroelectric power plant operated by Lievre River Power and Brookfield Power Services was the cause of the die-offs.
Ottawa River Keeper agreed with the ministry’s assessment in an online posting on August 16.
“After carefully reviewing this information, we see no reason to doubt the government’s findings. Particularly convincing was new information released about the lab results, showing that some of the dead fish were found with gas bubbles in their tissues, a telltale sign of supersaturation, which is the mechanism at play.”
Patrick Nadeau, executive director of Ottawa River Keeper, said, although the dam was clearly at fault, it is still unclear exactly what part of the hydroelectric plant caused the deaths, a mystery complicated further by the government’s cryptic initial assessment.
“It was a bit of an unusual thing because the minister named the dam operator but said nothing else, and we said ‘well, how do you know? There’s all these potential culprits here. Show us the data,'” Nadeau said.
“We know it’s the dam but even the dam doesn’t know exactly what part of their operations is causing this which is a problem, but we know enough to safely rule out Hexo.”
Nadeau said HEXO has given financial support to his organization’s green policy initiatives.
HEXO recently announced its intention to partner with Fortune 500 companies like Molson Coors (TAP.NYSE) to expand their own distribution capabilities. The company also recently acquired Newstrike Brands for $260M in an all-stock deal.
Though the market hasn’t taken much notice of the fish-death rumors, the company’s stock was unaffected on the four dates mentioned above, HEXO stock hasn’t continued to benefit from its recent acquisition.
HEXO is currently trading at $5.28, down from its year high of $11.29. The company has a market cap of $1.37B and has 256 million shares outstanding.
–Ethan ReyesDisclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.