Canadian marijuana stock HEXO (NASDAQ:HEXO) wasn't a winner in 2020, to be blunt: $1,000 spent on its shares on the first trading day of 2020 would have shriveled to only $628.90 today.

Hexo's decline is due both to the tough conditions of the marijuana industry in general and the company's often clumsy attempts to navigate it specifically.

To mention some of the former in passing, despite some recent improvements, the Canadian government has been turtle-slow in granting dispensary licenses. Meanwhile, that country saw an explosion in marijuana production, which cranks up supply and pushes down prices. And black market weed remains competitive, therefore a continuing threat to licensed producers and retailers.

Marijuana flower on Canadian currency.

Image source: Getty Images.

Like many peers, Hexo used to spend lavishly on unpromising assets, and has since been forced to book significant impairment charges. Cash flow is negative, so the company keeps issuing new stock to bolster its finances, diluting existing shareholders in the process.

Such factors had driven Hexo's share price down below $1, which is another headache because New York Stock Exchange companies have to essentially maintain that level (at a minimum) to keep their listings. Thus Hexo is effecting a reverse share split, a desperate piece of financial engineering that'll lift that per-share price without adding any real value at all.

So yes, 2020 had plenty of dire moments for Hexo. Yet there were glimmers of hope in the company's recently reported first quarter. Although it's still in its early days, the company's Truss joint venture with Molson Coors seems to be doing well, grabbing quite encouraging market share. And its revenue is going up nicely; it rose by 14% quarter over quarter to hit a new record.

Still, Hexo has many challenges awaiting it in 2021. 

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