Hexo extends gains to add 37% on rising volumes

panida wijitpanya

The shares of Hexo Corp. (HEXO) are surging for the second straight session in the pre-market trading on Friday, adding ~37% on above-average volume extending a rally following rival Canadian cannabis player Organigram's (OGI) Q1 FY23 results.

The company shares once spiked ~52% pre-market before paring gains minutes later.

~4.0M of Hexo (HEXO) shares have so far changed hands compared to the 65-day average volume of ~505.2K shares.

The company's rivals in the cannabis space, Flora Growth (FLGC), Aurora Cannabis (ACB), and Village Farms International (VFF), are also among notable pre-market gainers.

Hexo (HEXO) shares added ~15% on Thursday on above-average volume leading other cannabis stocks such as Tilray Brands (TLRY), Aurora Cannabis (ACB), Canopy Growth (CGC), and Organigram Holdings (OGI), which also made sharp gains.

The uptick followed Organigram's (OGI) Q1 FY23 results which beat Street forecasts for revenue but, according to Bloomberg estimates, well exceeded the consensus for adjusted EBITDA.

Seeking Alpha contributor Hunting Alpha argues that "the cannabis sector still has much untapped potential." However, the author opines that investing in its long-term potential without paying attention to current headwinds can lead to failure.