A Congressional infrastructure bill passed on to President Biden this past week includes a proposal to allow cannabis scientists to purchase product from local dispensaries for research, rather than relying solely on government-grown cannabis.
Hexo touts itself as an award-winning licensed producer, offering cannabis products, including dried flower, pre-rolls, oils, topicals, edibles, and CBD-infused beverages.
So, the opportunity is there for Hexo to grab a share in that market through its joint venture — Truss CBD Beverage Company — with American-Canadian multinational beverage company Molson Coors Beverage Company.
production facility in June, located in Colorado, where it will create Truss CBD-infused beverages and have the capacity to produce a full range of cannabis products.
Being a top producer resulted in the company’s fiscal year fourth-quarter earnings report on October 29, highlighting its best quarter of sales to date, reaching $38.7 million, a 71% sequential quarter increase, and a 43% increase over the same period in 2020.
Where the news gets scary for investors is in analyzing — from Q3 to Q4 — revenue and operating expenses.
More fear set in among investors due to comments made by the company’s auditor PriceWaterhouseCoopers LLC .
Ultimately, Hexo stock could benefit from being a buyout target for a larger competitor or possibly an increased stake from Molson Coors, as we’ve seen with Canopy Growth Corp in its relationship with Constellation Brands, which owns 38.6% of Canopy.
Two of the leading cannabis producers in Canada, which could make a move for Hexo, are Canopy Growth and Tilray — the latter of which became the biggest Canadian producer by revenue when it joined forces with Aphria.
As the stock price claws its way above an all-time low of $1.46, current investors probably want to hold on at this point, looking for a stronger boost in stock prices across the broader cannabis market, which has been happening of late.