HEXO Corp (TSX:HEXO) (NYSE:HEXO) has emerged as one of the more popular marijuana stock in the sector and the reasons behind the popularity are not hard to see. One of the most important factors behind the positivity surrounding the company is its dominance in the province of Quebec, Canada. HEXO has managed to capture the attention of the adult- recreational cannabis market and that could be the company’s springboard to success as it plans to expand further.
For much of its existence, lower production capabilities hampered the company’s ability to drive sales but that has now changed with the acquisition of Newstrike Brands. HEXO is boosting its own production as well and once the production from Newstrike is combined, the company expects that it will be able to produce as much as 150,000 kilos per year in the near future.
Newstrike Brands’ Acquisition Holds key
The higher capability comes at a good time for Hexo, as the market for cannabis edibles and other cannabis derivative products is going to be legalized in Canada. It is an up and coming market that could grow significantly and HEXO are well placed to take advantage.It is important to note that HEXO had also teamed up with Molson Coors Brewing to produce cannabis-infused beverages and gums. It is another important partnership in a space that could grow significantly in the years to come.
Additionally, the company is apparently in talks with as many as 60 large companies from outside the marijuana industry about possible partnerships. It remains to be seen if the company announces any major partnerships this year. Lastly, HEXO has claimed that it is going to be a profit-making company by next year and that is certainly a big positive for investors.
After having solid start this year, HEXO stock has corrected 40% from its 52-week peak price in Late April. Over the past couple of months, several cannabis stocks have seen sharp profit-taking amid industry uncertainty. keep an eye on HEXO stock in July. a
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