While cannabis producers pumped in millions of dollars to increase production capacity, the lower-than-expected rollout of retail stores in major Canadian provinces impacted consumer demand severely.
However, as HEXO and peers were posting consistent losses, they had to keep raising equity capital, which diluted shareholder wealth.
However, it has since burnt massive investor wealth to trade at its current price of $8.02.
HEXO has gone on an acquisition spree this year and first announced the buyout of Zenabis Global for $235 million in an all-stock deal.
Prior to the acquisition, HEXO already held a leadership position in Quebec’s recreational marijuana market and was the top player in Canada’s cannabis-infused beverages space.
48North’s products in the health and wellness space are rising in popularity and the company is focusing on niche items such as cannabis-infused bath salts, intimacy oils, and body creams. Further, Zenabis and HEXO expect to derive $32 million in cost synergies in the 12 months after the acquisition.
The online investing service they’ve run since 2013, Motley Fool Stock Advisor Canada, has beaten the stock market by over 3X.
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