From Ciara Linnane: Hexo Corp. shares were a bright spot in a lackluster cannabis sector Thursday, after the Canadian company posted results for its latest quarter, showing a narrower loss and big jump in revenue as the legal adult-use market in Canada kicked off.
The company said it had a net loss of C$4.33 million ($3.25 million) in its fiscal second quarter to Jan. 31, narrower than the C$8.95 million loss posted in the year-earlier period.
Revenue rose to C$13.4 million from C$1.2 million. The company sold 2,537 kg of adult-use cannabis, up from 952 kg in the previous quarter, at an average price of C$5.83 a gram, up from C$5.45 in the previous quarter. Medical cannabis revenue came to C$1.171 million, down from C$1.182 million a year ago and C$1.391 million in the prior quarter. The price per gram of medical cannabis rose slightly to C$9.15 from C$9.12.
Hexo produced about 4,938 kg of dried cannabis in the quarter, up from 3,550 kg in the October quarter. Headcount rose by 32% to 374 employees as the company ramped up production and new facilities came online.
Also in the black Thursday were shares of cannabis real-estate investment trust Innovative Industrial Properties Inc. IIPR, -0.80% which climbed 3.2% after the company posted a 111% increase in revenue in its latest quarter.
The company said it had fourth-quarter net income of $2.3 million, or 23 cents a share, compared with $284,000, or 7 cents a share, in the year-ago period. Revenue rose to $4.8 million from $2.3 million in the year-ago period.
Aurora Cannabis Inc. shares ACB, -1.16% ACB, -0.75% fell 1.4%, shedding some of their prior-day gains made on the news that it has hired billionaire hedge-fund manager and activist Nelson Peltz as an adviser.
Tilray Inc. shares TLRY, +0.38% reversed early losses to trade up 0.6%. Tilray said Wednesday it has hired former Goldman Sachs Managing Director Andrew Pucher as chief corporate development officer, tasked with leading the team responsible for mergers and acquisitions and corporate investments. Pucher was most recently Goldman’s head of Canadian Diversified Investment Banking, which included coverage of the cannabis industry.
Tilray’s most recent deals included a 50/50 joint venture with AB InBevBUD, -1.10% to develop THC and CBD beverages, and a global tie-up with Sandoz, a part of Swiss drug company Novartis AG NVS, +0.62% NOVN, +1.18% to distribute its medical products. Last month, the company announced a $317 million cash-and-stock deal for Manitoba Harvest, a company that claims to be the world’s biggest hemp food maker. Tilray said it expects to use the deal to launch CBD-derived products in the U.S. as early as this summer.
MedMen Enterprises Inc. MMNFF, +0.36% was up 0.4%. MedMen was expelled from the New York Medical Cannabis Association on Wednesday, according to MJBizdaily.com. The association had said it might cut ties with California-based MedMen in February, in response to a lawsuit filed by the company’s former finance head, alleging that he was exposed to racial, homophobic and misogynistic epithets and slurs, drug and alcohol abuse and personal humiliation, while at the company.
Green Organic Dutchman Holdings Inc. TGODF, -1.52% TGOD, -0.69% was down 1%, CannTrust Holdings Inc. CTST, -1.69% TRST, -1.82% was down 2%, Aleafia Heath Inc. ALEF, +1.36% ALEF, +1.36% was up 2.4% and OrganiGram Holdings Inc. OGRMF, -0.67% was down 0.8%.
Additional reporting by Max A. Cherney in San Francisco
The ETFMG Alternative Harvest ETF (MJ) was trading at $36.65 per share on Thursday afternoon, down $0.25 (-0.68%). Year-to-date, MJ has gained 12.68%, versus a 5.73% rise in the benchmark S&P 500 index during the same period.
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