Sunday, October 13, 2019

Hexo poor outlook taints all pot stocks - HEXO.t

Gatineau cannabis producer HEXO.t provides Quebec with roughly a third of its legal supply. The SP tumbled after the co announced its fourth-quarter revenue for 2019 fell far below expectations, and at the same time withdrew its 2020 outlook. Hexo's revenue problems are common to an industry going through a major shakeup as cannabis sales in Canada have not lived up to highly bullish forecasts.

Hexo's revised fourth-quarter outlook was between $14.5m and $16.5m, far less than the $26m in its previous outlook. Statistics Canada had put the value of the cannabis market in Canada at $5.7 billion. The reality has turned out to be $1 billion.
A federal government report suggested that the total amount of dried cannabis held by cultivators, distributors and retailers stood at 347,171 kilograms at the end of July — more than 30 times the amount of total sales.