Gatineau-based Hexo increased its fourth-quarter revenues 64 per cent year-over-year in the months leading up to the legalization of recreational cannabis across Canada.
On Friday, Hexo (TSX:HEXO) reported revenues of $1.4 million for the three-month period ending July 31, an increase of more than $500,000 from a year earlier. The cannabis producer’s annual revenues were $4.9 million, up almost $1 million from fiscal 2017.
Hexo’s revenue per gram was up as well, clocking in at $9.26 per gram, an increase of 26 cents from a year ago.
The company posted a net loss of $10.5 million for the quarter, compared with a profit of $935,000 a year ago. In the ramp-up to legal weed, Hexo increased its Q4 operating expenses to $10.7 million, a jump of more than $8 million year-over-year.
The cannabis firm announced a number of major deals in between the quarter’s close and the legalization of pot in Canada. Among the highlights were forming a joint venture with Molson Coors to work on cannabis-infused beverages, purchasing a stake in a two-million-square-foot facility in Belleville and announcing an international expansion to Greece.
Hexo shares were priced around $5.70 in afternoon trading on the Toronto Stock Exchange, a decrease of roughly three per cent on the day. That’s a significant drop from their pre-legalization high of $9.29, but Hexo is not alone in that regard: Cannabis companies across Canada are experiencing similar market declines in the second half of October.