Hexo shares plunge after revenue warning
Pot stocks crumbled to their lowest level since 2017 after Hexo Corp. became the latest cannabis company to lower earnings expectations.
The Horizons Marijuana Life Sciences Index ETF fell as much as 6.9 per cent Thursday to the lowest since November 2017 and has now lost 55 per cent since its recent high in March. The U.S.-traded ETFMG Alternative Harvest ETF slid to a record low.
The whole sector came under pressure after Hexo said its fourth-quarter and full-year revenue will be come in well below analyst expectations and withdrew its guidance for fiscal 2020. Hexo shares plunged as much as 26 per cent to the lowest since April 2018.
Hexo will report earnings on Oct. 24 and appears set to join other Canadian pot producers including Canopy Growth Corp., Aurora Cannabis Inc. and Tilray Inc. in disappointing investors. The company blamed slower-than-expected store openings, a delay in government approval for new products like edibles and vapes, and “early signs of pricing pressure.”
Tilray fell as much 12 per cent, heading for a record low. Canopy slid 9.7 per cent, Aurora lost 5.9 per cent and Cronos Group Inc. fell 6.7 per cent.
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