Cannabis producer Hexo ends year with CA$546 million loss

Canadian marijuana producer Hexo Corp. reported a net loss of 170 million Canadian dollars ($127 million) for its fourth quarter, ending its 2020 fiscal year with a CA$546 million loss.

The quarterly loss accounts for inventory write-downs (CA$42 million), impairment (CA$46 million) as well as a CA$54 million loss on the inducement of convertible debentures.

The Ottawa, Ontario-based company’s net revenue for the quarter ended July 31 was CA$27 million, up almost 23% from the previous quarter.

That was mostly driven by sales of beverages, which reached CA$2.4 million, as well as the commencement of international sales, which came in at CA$1.3 million.

However, Hexo appears to be producing significantly more cannabis than it’s selling.

In the quarter, the company sold about half the 16,540 kilograms (36,464 pounds) of cannabis it produced.

Hexo also announced a proposed consolidation of its common shares on an 8-to-1 basis in a bid to remain listed on the New York Stock Exchange.

In April, the company was warned by exchange that its shares, which have fallen below $1, do not meet listing standards.

Hexo has until Dec. 16, 2020 to regain compliance.

Shareholders will vote on the share consolidation plan on Dec. 11.

Hexo ended the period with CA$184 million in cash after holding two financing rounds in the quarter.

The company’s shares trade as HEXO on the New York Stock Exchange and Toronto Stock Exchange.