An anonymous director of Hexo reports

LEADING INDEPENDENT PROXY ADVISORY FIRM ISS RECOMMENDS HEXO SHAREHOLDERS VOTE FOR THE ARRANGEMENT AGREEMENT WITH TILRAY BRANDS

Institutional Shareholder Services Inc. (ISS), a leading independent proxy advisory firm, has issued a report recommending that Hexo Corp. shareholders vote for the arrangement agreement between Hexo and Tilray Brands Inc.

In reaching its conclusion, ISS noted:

• "The transaction makes strategic sense, as the combination will provide shareholders with the opportunity to continue to hold their investment in the assets of the company as well as participate as shareholders of the purchaser and as shareholders of a larger and more-diversified company."
• "The all-share consideration conveys a value transfer per Hexo share of $1.52 ($1.25 (U.S.)), which represents a 10.1-per-cent discount to the unaffected share price, and although potential governance concerns have been raised pertaining to the lack of public disclosure relating to any strategic review process, elevated change of control payments and termination fee arrangements, and reasonable concerns may exist that the offer could fail to capture the value of the company which would be discovered in a competitive bidding process, the risks and benefits of the transaction appear to have been appropriately weighed against the company's only likely alternative, being the status quo."
• "On balance, and in light of the reasonable strategic rationale, the company's financial going-concern issues, liquidity concerns, and non-approval risk associated with the arrangement, shareholder approval of this resolution is warranted."

Arrangement agreement with Tilray

Under the terms of the arrangement agreement, Tilray will acquire all of the issued and outstanding common shares of the company. Hexo shareholders will receive 0.4352 of a share of Tilray common stock in exchange for each whole company share held.

Your vote is important regardless of the number of shares you own

Shareholders are encouraged to vote in advance of the proxy cut-off time of 4 p.m. ET on June 12, 2023, in accordance with the instructions accompanying the form of proxy or voting instruction form mailed to shareholders together with the circular. Further details and voting instructions can be found in the circular.

Hexo's board of directors and the special committee of the board solely comprising independent directors of the company 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 is in the best interests of the company and that the arrangement is fair to shareholders.

Vote for the special resolution approving the arrangement with Tilray

The board reminds all shareholders to vote well in advance of the proxy cut-off time of 4 p.m. ET on June 12, 2023.

The company has retained Kingsdale Advisors to act as strategic shareholder adviser and proxy solicitation agent, and Kingsdale Advisors is available to answer information requests from shareholders with regard to shareholder approval of the arrangement and related matters.

Communications with Kingsdale Advisors may be made by telephone at 1-866-581-1489 (toll-free) in North America or at 416-623-2516 outside of North America, or by e-mail at contactus@kingsdaleadvisors.com.

About Hexo Corp.

Hexo is an award-winning licensed producer of premium products for the global cannabis market. Hexo delivers a thoughtfully curated portfolio of both recreational and therapeutic cannabis products that inspire customer loyalty. Hexo's brands include Hexo, Redecan, Original Stash, Bake Sale and T 2.0, as well as medical cannabis products.

Hexo's world-class Canadian grow sites are unmatched in size, technological advantage and yield of high-quality cannabis, driving innovation through every step of the process. Hexo operates three major grow sites in Ontario and Quebec, including one of the largest growth facilities in North America.

We seek Safe Harbor.