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 a big jump in revenue as the legal adult-use market in Canada kicked off.
Quebec-Based Hexo's US-listed shares
HEXO, + 3.30%
rose 2.2%, while its Toronto Stock Exchange-listed shares
HEXO, + 4.34%
rose about 3.6%, as most of its rivals fell.
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 $ 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 $ 5.83 a gram, up from $ 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 October quarter. Headcount rose by 32% to 374 employees as the company ramped up production and new facilities came online.
For more, read: Hexo shares rally premarket as losses and revenue soars
Related: Hexo to acquire New Strike Brands in the all-stock deal valued at about $ 197 million
Also in the black Thursday were shares of Cannabis real estate investment trust Innovative Industrial Properties Inc.
which climbed 3.2% after the company posted a 111% increase in revenue in its latest quarter.
The company said it had a quarter-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
fell 1.4%, shedding some of their pre-day gains on the news that it has hired a billionaire hedge fund manager and activist Nelson Peltz as an advisor.
Tilray Inc. shares
TLRY, + 0.74%
reversed early losses to trade up 0.6%. Tilray said on Wednesday that it has hired former Goldman Sachs Managing Director Andrew Pucher as chief corporate development officer, tasked with leading a 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 InBev
to develop THC and CBD beverages, and a global tie-up with Sandoz, a part of the Swiss drug company Novartis AG
CIS, + 0.65%
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 largest 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, + 0.72%
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 could cut ties with California-based MedMen in February, in response to a lawsuit filed by the company's former finance chief alleging that she was exposed to racial, homophobic and misogynistic epithets and slurs, drug and alcohol abuse and personal humiliation, while at the company.
Elsewhere in the sector, Canopy Growth Corp.
was down 1.9% and Cronos Group Inc.
was down 3.0%.
Green Organic Dutchman Holdings Inc.
TGODF, + 0.30%
TGOD, + 0.92%
was down 1%, CannTrust Holdings Inc.
was down 2%, Aleafia Heath Inc.
ALEF, + 1.81%
ALEF, + 1.81%
was up 2.4% and OrganiGram Holdings Inc.
was down 0.8%.
The Horizons Marijuana Life Sciences ETF
was down 0.8% and the ETFMG Alternative Harvest ETF
was down 0.6%.
The S & P 500
was down 0.1% and the Dow Jones Industrial Average
DJIA, + 0.06%
was down 0.01%.
Additional Reporting by Max A. Cherney in San Francisco
For all of MarketWatch's coverage of cannabis companies, click here.