HEXO (NYSE:HEXO): A Downward Momentum Despite Expansion

Despite the plans of expansion, the shares of HEXO (NYSE:HEXO), a company engaged in creating and distributing products to serve the Canadian cannabis market, has not been able to pull the chart.

The company has issued financial results in favour of the acquisition of Redecan Pharm. The companypreviously announced a definitive share purchase agreement to acquire Redecan, Canada’s largest privately-owned licensed producer.Hearing from the CEO and co-founder of Hexo, Mr. Sebastien St-Louis, Redecan has the top consumer loyalty in Canada, impressive market share and leading products in key categories. Today, we are excited to finally share additional financial information with HEXO shareholders.” The decision is largely directed by the effort the company is taking to gain the market share in the resurging consolidation in the cannabis sector. Further, it would help make Hexothe third largest cannabis operator in Canada.

Discussing of numbers, the first quarter reports of 2021 shows that the company generated C$24.7 million (US$19.4 million) in revenue, a jump of 146% compared with the same period the previous year. However, this too could not work much in favour of Hexo as the shares graduallytrooped downward for the rest of the week, closing yesterday in New York at $4.20, losing another 4% on the day. A lot of this could be because of the fact that the long-anticipated US legislation did very little to boost cannabis stocks after it was finally unveiled last week. Thus, what was presaged to be a game changer dampened the enthusiasm of many.

Market Reaction:

On Tuesday, HEXO stock jumped 3.80% at $4.36 with more than 3.31 million shares, compared to its average volume of 3.72 million shares. The stock has moved within a range of $4.0800 – 4.4100 after opening the trade at $4.20. Over the past 52-week, the stock has been trading within a range of $2.3200 – 11.0400.