Canada’s cannabis landscape is slowly changing, with a few established big players followed up by a collection of small-to-mid cap companies moving forward as they strive to join their bigger competitors.
One of these companies with explosive growth potential is HEXO Corp (NYSE: HEXO), which has been making a number of acquisitions as it plans to become one of Canada’s next top cannabis producers. Backed by previous good news, the company’s recent surge increased in today’s markets in response to the excellent financial metrics.
HEXO reported over 16.2 million in gross revenue during the second quarter of 2019. This increase a 1,269 percent increase in revenue in comparison to the same time period back in 2018. Additionally, HEXO’s current revenues have grown by an impressing 144 percent in comparison to the previous quarter. Overall, the company produced almost 5,000 kg of dried cannabis during this quarter, up 39 percent from the first quarter, while around 2,700 kg were sold to consumers.
“This is an exciting time for HEXO as we continue to achieve milestones on the way to becoming a top two cannabis company. This quarter not only saw an exponential increase in gross revenue and production, but also saw us continue to execute on our promises including reaching a construction and licensing milestone on our 1,000,000 square foot greenhouse expansion and listing on the NYSE-A,” said CEO and co-founder Sebastien St-Louis. “Just yesterday, we announced an agreement to acquire Newstrike Brands Limited. HEXO’s future is very promising, I am looking forward to continually driving shareholder value and achieving milestones with our team.”
In response to the news, shares of HEXO jumped 3.5 percent in today’s trading session. This financial announcement comes as a follow up to earlier announcements from the company, including a bargain deal to acquire Newstrike Brands (CVE: HIP) for C$263 million. The deal would see HEXO expand into five additional provinces and will not operate in eight provinces total. At the time, HEXO shares jumped an extra 5.8 percent, and in combination with today’s press release, have seen stock prices increase almost ten percent. Prices have almost doubled since reaching close to all-time lows in December.
Many analysts pick HEXO as a top candidate for explosive growth in the months and years to come. Currently operating with a market cap of $1.6 billion, many see the company skyrocketing to match the size of some of Canada’s top marijuana companies. In one of our recent articles, we went on to mention HEXO’s position within the CBD-infused beverage space, which is expected to be a $4.1 billion submarket by 2022. Once edibles become legalized in Canada mid-October, HEXO will be one of the few companies in the best position to become a market leader in this space. The company also boasts a partnership with major brewer Molson Coors to develop CBD-infused products.
HEXO Corp Company Profile
HEXO Corp, formerly The Hydropothecary Corp creates and distributes innovative, easy-to-use and easy-to-understand products to serve the Canadian cannabis market. The company serves adult-use market under the HEXO brand, while continuing to serve its medical cannabis clients through the well-known Hydropothecary brand. – Warrior Trading News