Hexo Corp. reported a loss of $20.8 million in its latest quarter as its revenue nearly doubled compared with a year earlier.
The Ottawa-based cannabis producer says its loss amounted to 17 cents per diluted share for the quarter ended Jan. 31.
The result compared with a loss of $298.2 million or $4.52 per diluted share a year earlier when the company took large one-time charges related to its goodwill and intangible assets.
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Net revenue in what was Hexo’s second quarter totalled nearly $32.9 million, up from $17 million in the same quarter a year earlier.
Last month, Hexo announced a deal to buy competitor Zenabis Global Inc. in a $235-million deal that will give the cannabis company a European foothold and strengthen its domestic business.
Consolidation push
The deal, which will see Hexo acquire two indoor growing facilities and get access to a greenhouse, comes as the Canadian pot market is starting to consolidate amid talk of potential U.S. cannabis legalization.
Hexo CEO Sebastien St-Louis told OBJ in February the company has been eyeing acquisition partners for more than a year as it looks to “really grow up from that startup phase and become a company that makes money.”
St-Louis said the combined company is on the path to becoming cash-flow positive, which will free up more capital for Hexo to “invest in the larger market south of the border” through efforts such as Truss CBD USA, its joint venture with Molson Coors to produce cannabis-infused beverages in states where they are legal.
Last week, Hexo said a U.S. court has dismissed a class-action lawsuit filed against the firm on behalf of shareholders who claimed the pot producer misled them and failed to disclose problems with the business. Other lawsuits in New York and Quebec are still pending.
Hexo shares were up 40 cents to $10.06 in mid-morning trading on the Toronto Stock Exchange.
