HEXO (NYSE: HEXO) is one major cannabis producer that’s had a wild past week or two. The Canadian pot stock has seen its shares tumble after warning that its Q4 revenues were going to be below expectations, a piece of news that has sent the company into a bearish spiral.
However, HEXO found itself with a piece of good news on Thursday now that Canada’s 2.0 legalization has just entered into effect. Specifically, HEXO’s joint venture with Molson Coors (NYSE: TAP), Truss Beverages, announced that they had launched six CBD-infused beverages into the newly legalized cannabis derivatives market.
Ever since HEXO and Molson Coors came into an agreement back in 2018, the plan has always been to launch a CBD-beverage lineup once the Canadian government legalized CBD-derivative products, which include beverages. While this announcement was a surprise to no-one, it is still was seen as an excellent piece of news.
“As a cannabis beverage specialist we’re excited to partner with the team behind Flow Alkaline Spring Water, a beverage brand Canadians know and love, on a CBD-infused spring water to round-out our product portfolio for launch,” said Brett Vye, CEO, Truss Beverage Co, in an official press release. “The newly formed Flow Glow™ Beverages Inc. will produce products that are an important part of our Truss beverage line-up. We can’t wait to bring Flow Glow™ and our other Truss cannabis beverages to market.”
However, this announcement doesn’t necessarily mean that the CBD-beverage product line will end up as a success. Other competitors have also taken the past year to plan their own beverage lineups as well, and time will tell whether or not HEXO will emerge on top of this niche. However, considering how starved investors have been for a piece of good news in the cannabis sector, they took this announcement as a refreshing change of pace.
In response to this news, shares of HEXO jumped by as much as 17% over the course of the day. Shares of the Canadian cannabis company, which previously were considered to be one of the most promising pot stocks in the entire industry, have reached an all-time low in the past couple of weeks. Since May, when HEXO hit an all-time high at $8.4, shares have slid by 65.6%. Other cannabis companies might have seen similar declines over the past few months, but HEXO fall has been a bitter pill to swallow for overly bullish cannabis investors, who expected better from one of Wall Street’s most promising pot stocks.
In addition to HEXO’s rise, the rest of the cannabis market saw a general increase as well following the official legalization of CBD-derivative products in Canada. However, it’s uncertain how long this small upswing will last.
HEXO Company Profile
HEXO Corp is a consumer packaged goods cannabis company that 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. The company offers dried cannabis; Elixir, a cannabis oil sublingual mist product line; and Decarb, an activated fine-milled cannabis powder product. – Warrior Trading News