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Saturday, Jun 15, 2024
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

Business

Hexo could lose its Nasdaq listing

The firm has been given 180 days to improve its share price

Hexo employee holding small cannabis plant in facility
Photo via Hexo

One of Canada’s largest pot companies has been warned of non-compliance with Nasdaq’s minimum bid requirement after the firm’s closing price fell below US$1 for 30 days straight.

In a statement Monday, Hexo Corp. (TSX: HEXO) (Nasdaq: HEXO) says it has 180 calendar days from the notification to regain compliance.

If Hexo’s bid price of common shares closes at US$1 or more for 10 consecutive days anytime before July 25, the firm will be complaint again.

But if the firm fails to do so by that date, it may be given another 180 days to try again, or its common shares could be delisted from the Nasdaq Capital Market.

There’s no immediate effect on Hexo’s shares on Nasdaq nor its common shares listed on the Toronto Stock Exchange, which the notification doesn’t impact.

Read more: Hexo’s sales spike 31% with $117M loss after steep impairments in Q1

Hexo isn’t the only Canadian cannabis firm that could lose its listing.

Sundial Growers Inc. (Nasdq: SNDL) remains on Nasdaq’s list of non-compliant companies as of Monday. The firm has said it was notified Aug. 9, 2021, that its common shares fell below the minimum of US$1 for 30 consecutive trading days.

According to Nasdaq, a firm is typically added to the list of non-compliant companies five days after it received a notification of noncompliance, and is removed a day after Nasdaq has determined compliance.

It’s been a precarious few months for Hexo, with the departure of founder and former CEO Sebastien St-Louis, subsequent shuffling of top management and shuttering of production sites.

But the firm has been pointing to its “Path Forward” plan as an optimistic roadmap towards cash-flow positivity.

Earlier this month, an update to that plan included cutting costs and selling off non-core assets, as well as right-sizing the company.

Read more: In search of profits, Hexo plans for more ‘right-sizing’ in 2022

Read more: Hexo to shutter 3 production sites in early 2022

On Monday, company stock on the Nasdaq was up around 10 per cent to US$0.55.

Mugglehead has reached out to Hexo for comment.

 

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