After postponing the release of its fourth quarter last week, Quebec-based cannabis company Hexo Corp. (NYSE :), (TSX 🙂 will explain its latest performance figures this morning in a conference call.
The company said last week that it needed more time to complete its profit reports after issuing a private placement of C $ 70 million (US $ 53.6 million).
Hexo tries to stop the flow of bad news, which started earlier in October when he withdrew his financial perspective for the fiscal 2020 period after analysts' income estimates were missed prior to the fourth quarter report. This movement steered shares and lost more than 22%. In its profit review, Hexo said fourth-quarter revenue will be between C $ 14.5 million (US $ 10.96 million) and C $ 16.5 million (US $ 11.04 million), under its earlier forecasts that revenues were twice as high as the third-quarter figures of C $ 13 million (US $ 9.83 million).
Last Thursday, Hexo announced the dismissal of 200 employees, including management personnel. The redundancies affect all departments and facilities. Among the most important management staff that leaves is the main production officer and the main marketing officer. The company had just over 1,000 employees.
In the past week, the company's share price went from US $ 2.74 (C $ 3.80) on October 18 to close yesterday at US $ 2.32 (C $ 3.03), a jump of 15.3% (20.2%).
Perhaps yesterday Hexo, in an attempt to turn the tide on the bad news, issued a statement announcing that it has received a Health Canada research and development license for the Center of Excellence in Belleville, Ont. The license extends the scope of activities that the company can perform on cannabis and its derivatives.
"With the research license, we can take our innovation work to the next level, with tests on derived products, including taste tests," said Hexo CEO and co-founder Sebastien St-Louis. "Consumers have high expectations of their experiences with packaged goods, and cannabis will be no different."
The facility will serve as a production and distribution center while it is ready to offer derivatives of cannabis. Earlier this month, Hexo Health Canada reported that it would produce new products that fall under the newly legalized cannabis products. The company has also recently received a modified license that allows it to bring topical cannabis, extracts and edible products from its cultivation and production facility in Gatineau, Que.
Companies that specialize in CBD extraction that attract attention
With marijuana infused products, including drinks, and a wide range of edible products that are now legal in Canada, the cannabis market looks ahead to the size and expectations of these so-called 2.0 products. With this shift, companies specializing in the extraction and processing of CBD oil attract more attention.
In fact, such a company, Valens GroWorks Corp. (OTC :), (TSXV :), has seen its stock slightly more than 7% increase since mid-October.
Valens GroWorks specializes in extraction method, distillation and purifies cannabinoid isolation. It is crucial to produce CBD isolate that is consistent and measurable to be used as an ingredient in commercially available consumer products. And Valens GroWorks has concluded contracts for this with various large companies in the field of cannabis. These companies include Tilray (NASDAQ :), Canopy Growth (NYSE: ), (TSX :), Green Organic Dutchman (OTC 🙂 , (TSX 🙂 and OrganiGram (NASDAQ :), (TSX :).
Valens GroWorks shares were closed 2.58% yesterday in Toronto and New York.
Valens GroWorks weekly chart
Another company that emerges as a major extractor is MediPharm Labs Corp (OTC :), (TSX :). The Ontario-based company specializes in pharmaceutical grade purified cannabis oil extract needed for derived products. His shares won more than 43% in the US and 44% in Canada since the end on October 1. They closed at US $ 3.67 (C $ 4.81) yesterday, a decrease of 2.24% on the day.
MediPharm has strategic partnerships with Canopy, as well as other companies, including Cronos (NASDAQ :), (TSX :), Emerald Health ] Therapeutics (OTC :), (TSXV 🙂 and Supreme Cannabis (OTC :), (TSX :).
Finland, Germany is heading towards legalization
Finland is moving towards the decriminalization of cannabis. According to a October 25 report from YLE, the national public broadcaster of Finland, a citizens' initiative calling for legalization of the weed will be considered by MPs after receiving the required 50,000 signatures from residents.
The initiative calls for the decriminalization of marijuana possession and to allow the use and cultivation of small quantities of the substance.
In Germany, the government is considering legalizing recreational cannabis. According to news reports, the German government weighs the movement and imposes control measures on production and distribution. Currently, cannabis is only legal for medical use. Its production, sale and import is strictly controlled by the Federal Institute for Medicines and Medical Devices.
