Hexo Corp. reported a loss of $20.7 million in the third quarter compared with a loss of $19.5 million in the same quarter last year.
The Ottawa-based cannabis company says the loss amounted to 17 cents per diluted share for the quarter ended April 30 compared with a loss of 26 cents per diluted share a year earlier when it had fewer shares outstanding.
Net revenue totalled $22.7 million, up from $22.1 million in the same quarter last year.
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Hexo has made a series of acquisitions this year in a bid to grow market share.
Last month, Hexo announced an agreement to buy cannabis producer Redecan for $925 million in cash and shares as well as another deal to buy 48North Cannabis for $50 million.
In February, it said it would spend $235 million to buy Zenabis Global and its Namaste, Re-Up, Blazery and Founders Reserve brands.
Eyeing No. 1 market share
“At the advent of legalization, we articulated a plan to become a top-three cannabis player in the Canadian adult-use market,” CEO Sebastien St-Louis said in a statement.
“With the acquisition of Zenabis and the announcements of intent to acquire 48North and Redecan, we are on the verge of surpassing that objective to become the No. 1 licensed producer by recreational market share.”
The Redecan deal will give Hexo a 17 per cent market share, followed by Tilray with 15.5 per cent, Smiths Falls-based Canopy Growth at 14 per cent and Aurora Cannabis at 6.5 per cent, Desjardins Securities analyst John Chu said recently in a note to investors.
St-Louis said he’s happy with the firm’s latest results, although sales were down compared with the previous quarter – a drop the company blamed on production issues and temporary stock limitations in some parts of the country.
“While this was a challenging quarter, we maintained our No. 1 position in the beverage category and increased our net sales outside of Quebec by 169 per cent over last year, including 14 per cent sequential quarterly growth in Ontario, while continuing to maintain our No. 1 position as the preferred supplier to Quebec,” he said.
Hexo shares finished the day down 52 cents to $7.50 in trading on the Toronto Stock Exchange.
– With additional reporting from OBJ staff
