As of June 22, Hexo (TSE: HEXO) will no longer be listed on the S&P/TSX composite index.
The Ottawa, Canada-based company had recently entered the U.S. market. It disclosed a third-quarter revenue spike, but could not prevent its shares from pricing below $1. As a result, Hexo will be delisted from the index.
Investor's Point Of View
Benzinga spoke about Hexo with Dan Ahrens, portfolio manager of the first and only cannabis ETF with U.S. MSO exposure, AdvisorShares Pure Cannabis ETF.
"It's being dropped from that composite strictly due to its size. It has been shrinking gradually from quite some time now," Ahrens said. "It shouldn't come as any great surprise, a company's market cap shrinks when its stock is down 80% over the past year. While all cannabis stocks have been down over the past year — at least virtually all — Hexo certainly's been among the worst."
Along with Hexo, Ahrens holds stakes in several cannabis companies, including Tilray and Aurora.
"Cannabis sales are up across the board in Canada and in the US. a great search connected to the COVID in ways but that's only partial, sales are up, sales are growing," Ahrens said. "But nobody should have been that kind of excitement over Hexo, they are way too far from profitability and they combine with a week balance sheet that says it will probably even more dilution of Hexo in the future when they need money."