At the beginning of 2019, the cannabis industry looked as the pace had begun to pick up to become one of the largest industries prior to the legalization and commercial sale of cannabis in Canada. Unfortunately, with hurdles like that of high tax rates in some select states, lack of physical stores in the key market place and supply issues in Canada. The industry already seemed to be falling apart as soon as the Q1 came to a close.
However, cannabis 2.0 already underway with the launch of edibles, vapes, and drinks back on Jan 6. Investors are looking forward to the next phase of cannabis legislation with hopes of better performance from pot stocks and the industry as a whole. This brings investors to look past the shambles for beaten-up pot stocks with promising opportunities.
Does This Pot Stock Have The Right Strategy?
HEXO Corp. (HEXO) (HEXO Stock Report), a pot stock to watch and leading cannabis supplier in Quebec, might be one such company. While back in April 2019, the stock was trading at a price of $11 per share, it currently HEXO trades at around $2 which is surprising considering how the company has done what they needed to dominate the industry. The company also has an agreement for supplying the state’s online marijuana sales.
The company has been introduced into the market of the home state as well as Ontario. Through Ontario’s HEXO has a production and distribution hub for cannabis-infused drinks along with having partnered with Molson Coors Canada. Hexo has also managed to acquire Newstrike Brands. This will expand the company’s production into eight provinces.
A Pot Stock Focusing on The Future
With things working in their favor, the company has even projected that revenues will increase to the sum of$400 million in a year. Unfortunately, the company failed to meet this expectation and had to consequently do away with 200 jobs, closing facilities.
2020 could prove to be a promising year for Hexo, especially through cannabis-infused beverages. These have the potential of being the most propitious opportunity, and if it does go favorably then Hexo would be at a great advantage. However, the market of edibles is quite competitive with no guarantee of success.
Furthermore, there is an added pressure with stories of children possibly getting their hands on these products. While vaping products were expected to be hit. When it comes to the health concerns of vapes the government is likely to not only intervene but also possibly ban vaping altogether. There is hope for Hexo and other pot stocks to bounce back, however, for now many of us are on watch.