Hexo’s partnership with Molson Coors appears to be paying dividends as the Ottawa-based cannabis producer says rapidly rising sales of THC-infused beverages helped it more than double its revenues in the first quarter of fiscal 2021 compared with a year earlier.
Hexo posted net revenues of $29.5 million for the three-month period ending Oct. 31, up from $14.5 million in the first quarter of 2020. Sales of adult-use beverages grew 54 per cent from the previous quarter to more than $3 million as Hexo continues to expand the line of cannabis drinks produced by Truss Beverage Co., its joint venture with brewing giant Molson Coors.
Hexo CEO Sebastien St-Louis said the company focused on “better matching supply to forecasted demand” in the first quarter, prompting “tough decisions” such as delaying the relaunch of its UP brand until later in the fiscal year.
“Despite this, we were able to achieve record sales, and I am delighted at the progress we have made to date,” he said in a statement.
Hexo slashed its net loss to $4.2 million from $66 million a year ago, when the company took significant writedowns. Thanks to aggressive cost-cutting measures, the firm also significantly reduced its operating expenses from $39.5 million in the first quarter of 2020 to $20.8 million this year.
Last week, Hexo unveiled its “centre of excellence” in Belleville, where it is bottling its cannabis-infused beverages. Earlier this year, Hexo and Molson Coors announced five brands in a bid to capture market share in the rapidly emerging cannabis drink space.
Hexo shares ended the day unchanged at US$1.01 on the New York Stock Exchange.