MJ Biz reports….
Canadian cannabis producer Hexo Corp. lost almost 21 million Canadian dollars ($17.3 million) in its third quarter on revenue that came in substantially lower than expected, in part, because of increasing competition from craft marijuana companies.
Net revenue for the three months ended April 30 was CA$22.7 million, 31% lower than the previous quarter, and about one-third lower than analysts’ predictions.
“Craft has absolutely surprised us,” St. Louis told analysts, adding that it was “mostly a one-time thing.”
The company’s CA$20.7 million net loss was about the same as the previous quarter’s deficit, bringing the year-to-date loss to CA$45.7 million.
“Q3 was our fault,” Hexo CEO Sebastien St. Louis said on a conference call with analysts, citing cultivation decisions made by the company and production issues relating to hash.
The CEO said the company removed some strains from its catalogue that were doing well in Quebec, planning to replace them with “incredibly promising” strains.
“What happened, nine months later when we actually cultivated … is we did not hit the same quality. We could not replace our strains that were now out of inventory with better or like-quality (strains),” St. Louis said on the call.
Read the full analysis of the investor call here..