LOSSES AND LAYOFFS
Hexo to cut 450 jobs, failed to meet Q3 projections
Despite having the largest segment of market share in Canada, Quebec-based Hexo Corp. announced it will be laying off 450 people after revenue fell 14% in Q3 from the previous quarter, per BNN Bloomberg.
By the numbers
- Revenue was up 101% at $45.6 million compared to a year earlier
- Losses reached $146.6 million, including an $83.1 million impairment charge associated with the closure of its Belleville, Ont. facility
- The company lost another $14.6 million in an inventory write-down
- Layoffs and cost cuts will save an estimated $30.6 million
Following the report on Wednesday, shares were at their lowest ever. Meanwhile, Tilray announced that it will be acquiring Hexo’s senior secured convertible notes at a lower price than previously announced.
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MAKING CANNABIS MAINSTREAM
39% of millennial consumers use cannabis multiple times daily: New Frontier Data
New Frontier Data’s latest report zeroes in on millennial cannabis consumers. Born between 1981 and 1996, they’re the first generation to be “mainstream cannabis adopters.”
- Half of millennial consumers spend between USD $50 and USD $200 per transaction
- 39% of millennial consumers use cannabis multiple times daily
- They also use cannabis for sleep more than any other generation
- Strains are important to 66% of millennial cannabis consumers—20% higher than Gen X
“Millennials came of age when cannabis-related social attitudes and policies were changing rapidly,” said New Frontier CEO Gary Allen. “As young adults, they watched the normalization of cannabis use mitigate negative stereotypes, and they have played a leading role in the emergence of the legal cannabis economy, both as participants in the market and as champions for change.”
COMPETITION IS HIGH
Canadian insiders commiserate over competition at London conference
Citing saturated retail markets and a competitive, bloated cultivation and processing landscape, Canadian cannabis industry insiders commiserated at London, Ont.’s Cannabis-Wiki Conference and Expo, per CTV.
There are approximately 1500 retailers in Ontario, and 868 Health Canada-licensed companies in cultivation, processing and selling.
“There’s a lot of new great brands coming out constantly,” said Wagners marketing manager Ross Hendry. “You have to have a pretty strong offering to compete.”
OFF THE CSE
GoodBody Health de-lists from Canadian Stock Exchange
UK-based wellness company GoodBody announced last week that it will be de-listing from the Canadian Securities Exchange (CSE), per BusinessCann.
The company’s share price on both the CSE and the Aquis market dropped significantly even though it reported its highest profits in Q1 of 2022.
“The small exchanges both here and in Canada in a bear market with a war raging in Europe, they’re just not a great place to be,” said founder and executive chairman Geremy Thomas. “There’s not the liquidity or the appetite for risky small stocks and I can’t see that situation changing anytime soon.”