Shares of Canadian cannabis producer Hexo Corp. (HEXO) fell to a record low of $0.21 U.S.
after it reported a quarterly loss of $146.6 million and announced 450 job cuts.
Hexo announced that its fiscal third-quarter revenue climbed by 101% to $45.6 million from a
year earlier. However, it was down 14% from the previous quarter. The cannabis producer
reported an adjusted earnings loss of $18.4 million, a worse decline from the $10.8 million loss it
announced in the same period of 2021.
Hexo continues to struggle with an oversupplied legal market and a robust black market that
continues to be the preferred way for many Canadians to purchase cannabis.
Hexo said it would not provide any forward guidance as it manages “deteriorating market and
macro-economic conditions.”
The 450 staff cuts will reduce Hexo’s sales and administrative expenses by 30%, or $30.6
million a year, the company said.
Separately, Hexo and Tilray (TLRY) announced that they are repricing certain terms of their
previously announced financing deal to allow Tilray to buy senior secured convertible notes
formerly owned by a U.S. hedge fund. Those convertible notes would now give Tilray a 50%
stake in Hexo once exercised.
Hexo stock is down 72% so far this year and trading at $0.21 U.S. per share. The Nasdaq stock
exchange has threatened the company with delisting if it can’t get its share price back above $1
U.S.