Cannabis producer Hexo reports CA$1.1 billion loss for year

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Quebec-based cannabis producer Hexo Corp. reported a net loss of 102.4 million Canadian dollars ($75 million) for its fourth quarter, bringing the company’s total loss for the year to CA$1.1 billion.

The latest annual loss brings Hexo’s accumulated deficits to CA$1.8 billion, and the company “has yet to generate positive cashflows or earnings,” according to a filing with the U.S. Securities and Exchange Commission.

Net revenue for the year was CA$191 million, substantially more than the previous year because of Hexo’s acquisitions of rival producers Redecan and 48North Cannabis Corp.

Those two companies accounted for CA$62.2 million of Hexo’s sales.

Stripping out those acquisitions, Hexo’s gross sales still rose 4% over the previous year.

By category, Hexo’s gross sales for the year were:

  • CA$211.7 million in adult-use cannabis sales, up 48% over the previous year.
  • CA$3.4 million in medical cannabis revenue, up 92% over 2021.
  • CA$13.5 million in wholesale orders, about five times more than last year’s figure.
  • CA$20.4 million for international medical cannabis sales, doubling from the previous year.

Cannabis beverage sales, meanwhile, inched up to CA$16.4 million.

“The fourth quarter was a period of strategic realignment for Hexo,” CEO Charlie Bowman said in a news release announcing the quarterly and annual results.

“With a solid foundation now in place, Hexo has moved to the second phase of our transformation – focusing on producing the core brands and products that customers want, leading in innovation and reinforcing our market share.”

Most of Hexo’s sales came from its home province of Quebec.

For the year ended July 31, 2022, Hexo became less dependent on the Quebec government-owned wholesaler, Société québécoise (SQDC) du cannabis.

Sales to the SQDC accounted for 17% of Hexo’s sales in the year ended July 31, 2022. In the previous year, that figure stood at 42%.

Alberta’s government-owned wholesaler, the Gaming, Liquor and Cannabis agency, accounted for 15% of Hexo’s sales, about the same as a year earlier period.

Sales to the Ontario Cannabis Store accounted for almost one-third of Hexo’s sales, up from one-fifth in the previous year.

As of July 31, 2022, Hexo had CA$83.2 million in cash and cash equivalents

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