Hexo announced annual losses of $82M and a $57M Q4 loss (adjusted to $43.7M), tripling analysts’ average prediction of a $13.2M loss.
MJ Biz Daily, Bloomberg
- The company’s revenue was $15.4M (up 19% quarter over quarter).
Financial Post - Taking an inventory writedown, the company cut the value of its inventory by $17M, which BMO analyst Tamy Chen said was “an unsettling development” considering how much unfinished inventory LPs have.
- Hexo announced it would suspend cultivation in the Niagara facility it acquired as part of its $263M Newstrike acquisition this spring. 100 employees were laid off at that Beamsville, Ontario facility.
Toronto.com
Hexo has a five-year supply agreement with Quebec, under which it was to provide the SQDC with 20,000 kg of product in the first year. However CEO Sebastien St-Louis said Hexo had only delivered half that amount. Given the slow retail rollout in the province, St-Louis said “We don’t think it would be responsible to demand (that Quebec buy) 20 tonnes.”
- Analysts John Zamparo and Krishna Ruthnum wrote in a client note, “Whether or not this is the right move is debatable, but without the [Quebec supply agreement], Hexo is relatively undifferentiated versus peers.”
MarketWatch - The company retains 33% market share in Quebec, down from 60% at legalization.
- CBC Hamilton interviewed me about Hexo’s cuts, as well as other challenges to cannabis retail in Ontario.
CBC Hamilton
Hexo partner Molson Coors announced it was laying off 500 workers worldwide.
CTV News
Quick Hits
- The Green Organic Dutchman co-founder turned recently departed 48North co-CEO Jeanette VanderMarel emerged as CEO of Ontario LP Beleave, and she has plans to consolidate the number of stocks the LP has issued by a ratio of 10:1.
MJ Biz Daily - A licensed Ontario hemp grower accused TD bank of racially profiling him when they froze his accounts and accused him of breaking the law after he asked them to transfer $35,000 to a vendor.
CBC Toronto
