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Cannabis Summary for March 17, 2020

2020-03-17 18:33 ET - Market Summary

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by Stockwatch Business Reporter

The S&P/TSX Cannabis Index rose 3.43 points to 107.78 Tuesday, while the Canadian Securities Exchange Composite Index rose 3.4 points to 235.1. Sebastien St-Louis's Quebec-based Hexo Corp. (HEXO) plummeted 33 cents to 65 cents on 12.33 million shares after announcing that the company is preparing its late Q2 financials "on a going concern basis." It has missed the March 16 deadline to file its fiscal second quarter results because of a "complex" calculation to a significant impairment loss, which Hexo expects to be in the range of $265-million to $280-million.

Desjardins analyst John Chu expects the impairment charge to be related to Hexo's $263-million acquisition of Newstrike Brands last year. Hexo recently announced that it intends to sell the Niagara Falls, Ont., facility that it acquired through the Newstrike deal.

On Hexo being a going concern, the company says: "The company's ability to continue as a going concern is dependent upon its ability to generate funds from profitable operations and raise additional financing in order to meet current and future obligations ... These conditions combined with the accumulated losses to date indicate the existence of a material uncertainty that may cast doubt on the company's ability to continue as a going concern."

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