Will Molson Coors + HEXO Corp. Dominate Cannabis Industry?

HEXO Corp. is based in Canada. It produces, markets and sells cannabis.  It claims to be one of the “largest licensed cannabis companies in Canada,” with nearly 2 million square feet of facilities in Ontario and Quebec.

And HEXO has established a…

processing, production and distribution center in Greece in an effort to get a toehold in the eurozone.

The company operates in both the adult-use and medical cannabis spaces.

The company has been in operation since 2013 and is headquartered in Gatineau, Quebec, Canada.

HEXO Stock Headwinds

For the first part of 2020, the company struggled.

It faced the same headwinds that hit Aurora Cannabis Inc. (NYSE: ACB) — overproduction.

In the first nine months of the fiscal year, the company sold just 25,000 kilograms of its 90,000 kilograms of annual production.

That led the company to write off nearly $100 million in goodwill, around $31 million in unsold inventory and another $80 million in asset impairments in January.

Be sure to check out today’s video for the full story on HEXO’s financials.

Partnership With Molson Coors

There’s some encouraging news about HEXO:

  • In April, it entered into a partnership with Molson Coors to research and develop non-alcoholic CBD beverages in Colorado.
  • I mentioned the expansion into the eurozone by establishing a facility in Greece.
  • The price of a gram of adult-use cannabis has dropped from $5.29 in April 2019 to $3.19 in April 2020. But HEXO’s sales went from 2,759 grams for the quarter ending April 2019 to 9,338 for the quarter ending April 2020.
  • HEXO has vastly cut its marketing and promotion spend.
  • The company has launched its Veryvell™ line of water-soluble cannabis extract drops in Canada. It was the first product offering under its partnership with Molson Coors Canada (different from the venture in Colorado).

HEXO Stock: Recent Moves

As for its share price, HEXO has seen a lot of lateral trading since June.

Its price has barely moved from between $0.60 and $0.70 per share since topping out at…

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