HEXO launches a new offer on the market

GATINEAU, Quebec, May 03, 2022 (GLOBE NEWSWIRE) — HEXO Corp. (“HEXO“, or the “Company”) (TSX: HEXO; NASDAQ: HEXO) is pleased to announce that it has implemented an at-the-market equity program (the “ATM program”) which allows the Company to issue and sell up to US$40,000,000 (or its equivalent in Canadian dollars) of common shares in the capital of the Company (the “Ordinary actions”) of the Treasury to the public, from time to time, at the discretion of the Company. All Common Shares sold under the ATM Program will be made by way of “at-the-market distributions”, as defined in National Instrument 44-102 of the Canadian Securities Administrators – On-shelf distributionincluding sales made through the Toronto Stock Exchange (the “TSX“), NASDAQ Capital Markets (the “NASDAQ”), or any other recognized market on which the Common Shares are listed, quoted or otherwise traded in Canada and the United States.

Distributions of common stock under the ATM program will be made pursuant to the terms of a stock distribution agreement dated May 2, 2022 (the “Distribution Agreement”) entered into between the Company and Canaccord Genuity (the Canadian and U.S. affiliates of Canaccord Genuity, collectively, the “Agents”).

The ATM program replaces the “on the market” offering of common stock in Canada and the United States with an aggregate sale price of up to C$150,000,000 (the “Previous ATM offer”) pursuant to the share distribution agreement dated May 11, 2021 (the “Previous ATM Agreement”) between the Company and BMO Nesbitt Burns Inc. as Canadian agent and AGP/Alliance Global Partners and BMO Capital Markets Corp. as U.S. agents (the “Previous ATM Agents”), which ended on April 11, 2022. The Company has terminated the previous ATM Offering and the previous ATM Agreement with the previous ATM Agents in order to proceed with the Offering with the Agents.

The size and timing of ATM Program distributions, if any, will be determined at the sole discretion of the Company. The Common Stock will be distributed at prevailing market prices at the time of each sale and therefore prices may vary between purchasers and during the term of the ATM Program. The ATM Program will be in effect until the earlier of the following dates between the issuance and sale of all common stock issuable under the ATM Program and June 10, 2023, unless terminated earlier such date by the Company or the Agents in accordance with the terms of the Distribution Agreement.

The Company intends to use the net proceeds from the ATM program for working capital and to fund its operating activities, provided that any proceeds received by the Company in excess of US$30 million will be applied to cover the Company’s obligation under the settlement agreement entered into on April 11, 2022 between the Company, HT Investments MA LLC and Tilray Brands, Inc. (“Tilray”) to pay Tilray’s financial advisor’s fees or other direct or indirect costs and expenses.

The offering of Common Shares under the ATM Program is qualified by a Prospectus Supplement dated May 2, 2022 (the “Prospectus Supplement”) to the amended and restated Canadian short form base shelf prospectus of the Company dated May 25, 2021 amending and restating the (final) short form base shelf prospectus dated May 7, 2021 (the ”Base Shelf Prospectus“), each filed with the securities commissions of each of the provinces and territories of Canada, and a prospectus supplement dated April 25, 2022 (the “U.S. Prospectus Supplement“) to the Company’s U.S. base shelf prospectus (the “US Base Prospectus“) included in its registration statement on Form F-10/A (the “Amended Registration Statement“) (File No. 333-256131) (File No. 333-255264) filed with the United States Securities and Exchange Commission on May 21, 2021 Amending Registration Statement on Form F-10 (the “Initial Registration statement“) (File No. 333-255264) filed with the United States Securities and Exchange Commission on May 10, 2021. The Distribution Agreement, Prospectus Supplement and Base Shelf Prospectus are available on the Managed SEDAR website by the Canadian Securities Administrators at www.sedar.comand the Distribution Agreement, U.S. Prospectus Supplement, U.S. Base Prospectus, Amended Registration Statement and Initial Registration Statement are available on EDGAR at the SEC’s website at www.sec.gov. Copies of the Prospectus Supplement and the U.S. Prospectus Supplement may also be obtained, when available, from Canaccord Genuity LLC, Attn: Syndicate Department, 99 High Street, 12th Floor, Boston MA 021990, by email to prospectus@cgf.com.

No securities regulatory authority has approved or disapproved of the contents of this press release. This press release is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy common stock, and there will be no sale of such securities in any state or territory in which a such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or territory.

Forward-looking statements

This press release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws (“forward-looking statements”), including statements regarding the aggregate value of common stock issuable under the ATM Program and the Company’s intended use of the net proceeds of the ATM Program, if any. Forward-looking statements are based on certain expectations and assumptions and are subject to known and unknown risks and uncertainties and other factors that could cause actual events, results, performance and achievements to differ materially from those anticipated in such statements. forward-looking, including that the Company’s use of proceeds from the ATM program may differ from those indicated. Forward-looking statements should not be construed as guarantees of future performance or results.

For more information regarding some of these expectations, assumptions, risks, uncertainties and other factors, and risk factors relating to the Company and the Common Shares, please refer to the Prospectus Supplement and the Base Shelf Prospectus or the Supplement to American prospectus. and the U.S. base prospectus, as applicable, the Company’s Annual Information Form dated October 29, 2020 and other continuous disclosure documents, which are available on SEDAR at www.sedar.com and EDGAR at www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statement as a result of new information or future events, or for any other reason.

About HEXO

HEXO is an award-winning licensed producer of innovative products for the global cannabis market. HEXO serves the Canadian recreational market with a portfolio of brands including the HEXO, Redecan, UP Cannabis, Namaste Original Stash, 48North, Trail Mix, Bake Sale, REUP and Latitude brands, as well as the medical market in Canada, Israel and Malta . The Company also serves the Colorado market through its Powered by HEXO® strategy and Truss CBD USA, a joint venture with Molson-Coors. With the completion of HEXO’s recent acquisitions of Redecan and 48North, HEXO is one of Canada’s leading cannabis product companies by recreational market share. For more information, visit hexocorp.com.

For more information, please contact Investor Relations:

invest@hexo.com

www.hexocorp.com

For media inquiries, please contact:

(819) 317-0526

media@hexo.com

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