HEXO (NYSEMKT:HEXO) doesn’t get as much attention as some of its peers, but it probably should. This Canadian cannabis producer has the means to grow 150,000 kilograms annually. Plus, the company markets popular branded concentrates that carry wide profit margins.
HEXO recently made a big acquisition that it thinks can jolt sales by 739% next year. Soaring growth expectations will encourage some investors to run out and buy some shares of this risky marijuana stock. Before doing anything rash, though, we should weigh HEXO’s opportunities against incoming threats…
The case for HEXO
HEXO has production facilities that take up millions of square feet across Canada, and a processing plant in Greece that it hopes will supply EU members with a variety of products that could differentiate the company from its peers. The company’s Hydropothecary subsidiary is relatively popular among light users in Canada who pay a whopping CA$69 for a tiny bottle of its sublingual spray. The amount of THC in the bottle could be squeezed from just a couple of grams of mid-grade flower.
During the three-month period ended Jan. 31, HEXO sold CA$16.2 million worth of cannabis, and operations only lost CA$6.9 million. While investors would prefer a profit now, the losses weren’t nearly as bad as what some of HEXO’s peers experienced.
HEXO’s expanding its product offerings and the number of places they’ll be available for sale. The company has a chance to enter the beverage market through a joint venture formed in partnership with Molson Coors (NYSE:TAP) last summer.
More recently, HEXO acquired…
Continue reading at THE MOTLEY FOOL