HEXO reports $116.9-million loss, launches new Path Forward plan
Quebec-based HEXO reported a $116.9 million loss in its first quarter and announced a new strategic plan called A Path Forward, reports Yahoo Finance.
CEO Scott Cooper replaced co-founder Sebastien St-Louis last fall. Cooper formerly led Truss Beverages, an infused drinks joint venture between Molson-Coors and HEXO. The company has also made three major acquisitions this past year: Zenabis Global Inc., Redecan and 48North.
Check out our June interview with Scott Cooper.
A Path Forward has five (seemingly obvious) goals:
- Reduce production costs
- Streamline organizational structure
- Find synergies from acquisitions and plant closures
- Better revenue management and pricing
- Accelerate growth with increased market share
“The days of unprofitable cannabis companies are numbered,” Cooper declared on a call with analysts. Notice, he didn’t say “over” but “numbered”…
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The cannabis wins and losses of 2021
Just like New Cannabis Ventures chimed in this week with big cannabis surprises in 2021, Forbes weighed in on this year’s wins and areas for improvement in the cannabis industry.
- More states went legal, including New York and New Mexico
- Decriminalization of psychedelics in some regions like Oregon
- Cannabis delivery allowed in some jurisdictions (like Ontario!)
- Despite raking in $1 billion in tax revenues, California’s regulated retail market is shrinking while the illicit market grows
- Limited licensing in newly legal states
The 2022 wishlist
- Justice reform
- A more diverse workforce
- Better support for small businesses
- Cannabis lounges
We are anxious to see if the Forbes’ list changes dramatically at the end of 2022 – that will be the sign of progress.
California regulators could face the heat for ‘burner licenses’
After a lawsuit filed by Catalyst Cannabis Co. CEO Elliot Lewis alleged that illicit cannabis sellers have bought distribution licenses through the regulated system using “front men,” several regulators could be deposed, reports MJBizDaily.
There’s a hearing scheduled for Feb. 14, 2022 in Orange County Superior Court to decide whether or not regulators in charge of monitoring the state’s seed-to-sale system should vacate their jobs.
The Department of Cannabis Control and the state’s Attorney General oppose the request. Lewis, however, is determined.
“It’s going to be trench warfare,” he said. “It’s going to play out over time. We’re eventually going to depose them.”
California is often where trends start. That’s what worries regulators in other parts of the country.
Details on the future of CBD coming soon
The UK’s Food Standards Agency says the (long overdue) details on which CBD products and companies will be allowed to remain on the market is coming in a matter of weeks, reports BusinessCann.
- 210 applications are still being considered
- FSA CEO said two lists will be published: one of approved products, and one “on-hold” list for applications that will be approved eventually
- 600 applications have been rejected with more likely to come
More hurdles to come
Full authorization won’t come until they’ve been further assessed, warned the CEO.
“For the products that are on the two lists we need to be clear that these products are still not formally authorized for sale and neither have they yet been assessed for safety.”