HEXO (HEXO) has undergone a big change inside its C-suite. The company announced on Friday that CFO Michael Monahan had stepped down, effective immediately. He has been replaced by a fellow HEXO executive, Stephen Burwash.
HEXO quoted Monahan as saying that he resigned to be closer to his family. Nevertheless, he will continue to work with the company as a consultant, at least through the period of transition to Burwash's reign.
Image source: Getty Images.
Monahan had not been in his post very long; his hiring was announced by the company in late May. HEXO was founded in 2013.
Previous to his advancement to CFO, Burwash had served as HEXO's vice president of strategic finance. The company did not publicly name a replacement for his vacated position.
Burwash will be taking the financial reins at a tough time for the industry, since marijuana stocks haven't performed well lately. That said, HEXO has held up better than most of its peers. In fact, year to date, its share price has risen nearly 20%, while those of many competitors are underwater.
This is partially due to a recent development. In mid-September, MKM Partners analyst Bill Kirk, initiating coverage on eight cannabis stocks, singled out only two as buys. HEXO was one of the pair, due largely to the company's strategy of trying to partner with more traditional businesses to make and sell cannabis-related goods.
"We believe HEXO's approach to be the working component of expert partners' products has the best chance of creating a defensible brand ('Powered by HEXO')," Kirk wrote in his analysis. By contrast, most of the larger marijuana stocks rely on more or less complementary acquisitions to build scale, which, of course, eats up capital.
Another advantage pointed out by Kirk is HEXO's balance sheet, which on a relative basis is tidy for a marijuana company. At the end of its most recently reported quarter, it had nearly 189 million Canadian dollars ($142 million) in cash and short-term investments, against just over CA$30 million ($23 million) in long-term debt.
In tune with many other marijuana businesses, however, HEXO is chronically unprofitable. Its bottom-line loss in said quarter was CA$7.8 million ($5.8 million) on $CA13 million ($9.8 million) in net revenue.
