Hexo Reports C$5.2 Million For Just Two Weeks Of Adult Use Cannabis Sales

HEXO Corp. (TSX: HEXO) (OTC: HYYDF) reported its financial results for the first quarter of the 2019 fiscal year with gross revenue of  C$6.7 million versus last year’s C$1.1 million for the same time period. The revenue figure includes C$5.2 million from legal adult-use cannabis sales during the first two weeks of legalization.

Still, the company delivered a net loss of C$14.7 million versus last year’s net loss of C$381,000. Hexo said that the increased loss was mainly due to higher expenses needed for expanding the scale of the operations as it prepared for the legalization of the adult-use market and the realization of stock-based compensation expenses in line with the increased headcount and market share price value of the company.

“HEXO hit tremendous milestones in the weeks following the legalization of adult-use cannabis,” said HEXO’s CEO and co-founder Sebastien St-Louis. “The company continues to honor its commitment to executing on its plans, which has led to a significant portion of our first quarter’s $6.7 million in revenue generated in just two weeks and represents more than a 500% increase over last quarter.”

Hexo said that it sold approximately 1,110,000 total gram in the quarter versus 539,000 in total fiscal 2018. Despite the new adult-use market, the company still experienced a 2% increase over last quarter in its medical cannabis sales.

“HEXO’s first quarter financials highlight the remarkable pace of its adult-use cannabis sales and put HEXO on-track to generate significant revenue this year”, added Mr. St-Louis.

Adult Use Sales

Hexo said that its adult-use sales totaled C$5.1 million during the quarter, which is a 371% increase over the C$1.1 million of medical sales in the first quarter of 2018, and a 5% increase over the C$4.9 million of total medical sales in all of fiscal 2018.

The sales volume in the first quarter of 2019 was 952,223 gram equivalents sold. With a limited ability to sell other forms of cannabis, dried flower represented 81% of gram equivalents sold during the period.

The company reported that adult-use revenue per gram was approximately C$5.45. Hexo said that this was reflective of the bulk of sales attributed to dried flower which commands a competitive market sales price. The remaining balance was made up of oil sales which get a higher revenue per gram equivalent.

The company statement said that 90% of all adult-use sales were realized in Quebec through the SQDC with the remaining 10% derived in Ontario and British Columbia via the OCS and BCLDB respectively.

Medical Cannabis Sales

Even though the focus has been on the new adult-use cannabis market, medical sales continue to be an important part of the equation. Revenue increased 30% to C$1.4 million compared to C$1.1 million in the same period last year. Hexo said that the higher revenue was driven by increased sales volume as well as higher Elixir oil sales which get a higher revenue per gram when compared to dried gram sales. Sequentially, revenue increased 2% reflecting a lower revenue per gram on the dried flower sales which decreased $0.22/gram due to the current period’s sales mix of products.

The sales volume for medical cannabis increased 30% to 157,504 gram equivalents, compared to 120,844 in the same prior year period, due to an increase in oil-based products as the product mix purchased by customers shifted towards smoke-free alternatives. Total dried grams sold increased 10% when compared to the same prior year period. Revenue per gram equivalent remained at $9.12 as compared the same prior year period. On a sequential basis, sales volume collectively increased 3% across both dried and oil sales.

Geographical sales in Ontario and Quebec increased 8% and 16% respectively.

 

 

Debra Borchardt

Debra BorchardtDebra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Masters degree in Business Journalism from New York University.


Leave a Reply

Your email address will not be published. Required fields are marked *

You may also like


About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


READ MORE



Recent Tweets

@GreenMarketRpt – 19 hours

Our biggest fans this week: WallandBroad, buhlreports, RosieMattio. Thank you! via

@GreenMarketRpt – 19 hours

Green Market Report’s Marijuana Money December 6, 2019

@GreenMarketRpt – 1 day

My week on Twitter 🎉: 6 Mentions, 108 Mention Reach, 15 Likes, 6 Retweets, 26.8K Retweet Reach. See yours with…

Back to Top

You have Successfully Subscribed!