Cannabis grower Hexo (TSX 🙂 (NYSE 🙂 is about to become the only pot stock removed from the routine revision of the Canadian stock index as the company's own ups and downs have collided with massive broader volatility across all major indices.
The Ottawa-based company, which is also traded on the New York Stock Exchange, is one of 14 companies whose shares will disappear before the opening bell on the major Canadian index. June 22, according to an announcement by S&P Jones Indices last Friday. It is the only Canadian pot to be removed from the index in this regular sweep.
Due to the move, only four major Canadian marijuana stocks remain on the major Toronto index – Aphria (NYSE 🙂 (TSX :), Aurora Cannabis (NYSE 🙂 (TSX :), Canopy Growth (NYSE: ) (TSX 🙂 and Cronos Group (NASDAQ 🙂 (NASDAQ :).
Hexo, which has been struggling with a series of layoffs and an uncertain cash position over the past twelve months, has seen its stock price drop so far this year by 40%, compared to a 10% decline in the broader TSX . In the past 12 months, Hexo has plummeted by approximately 84%.
Eviction Order Destroys Profit Bounce
The forthcoming eviction sent Hexo down by nearly 1.5% to end the trading day at US0. .98 (C $ 1.34) on Monday, following the 6.5% slide on Friday. This two-day decline has almost completely wiped out Hexo's brief hike last week, after revealing its latest quarterly results that were better than expected.
According to the third quarter report ending April 30, Hexo earned C $ 22.1 million in revenue, up 30% from the previous quarter. The net loss decreased from $ 298 million in the second quarter to $ 19.5 million in the third quarter.
It recorded an adjusted EBITDA loss of C $ 4.3 million, a much improved measure compared to the previous quarter's C $ 8.5 million. million loss. The company's CEO, Sebastien St-Louis, said Hexo was on track to generate positive cash flow by the end of the year. Hexo opened early on Friday with a 13.5% rally, but that was all a thing of the past once the delisting announcement hit the wire.
Crashed in the US market
Hexo is said to have recently entered the US market when it entered into a joint venture with beer producer Molson Coors (NYSE 🙂 to become a non-alcoholic, to develop hemp-derived CBD liquor to launch in Colorado.
The joint venture, known as Truss CBD USA, was established as an independent company with its own board of directors. Molson Coors is said to be the majority owner.
The new company would build on the collaborative relationship Hexo-Molson Coors, which includes another joint venture focused on non-alcoholic cannabis-infused beverages for the Canadian market – Truss Beverages. This company is expected to launch its first drinks later this year.
Hexo shares closed at US $ 0.98 (C $ 1.34) yesterday, down 3.88% in the United States and nearly 1.5% in Toronto.
