Has Marijuana Stock HEXO Corp. (HEXO) Found a Bottom?

: hexo | HEXO Corp. Common Shares News, Ratings, and Charts

hexo – This past month HEXO has shown stability, holding onto $2 per share, and many investors are speculating that this could be the bottom.

Get Free Updates

Join thousands of investors who get the latest news, insights and top rated picks from StockNews.com!

For anyone who has been a long-term investor in HEXO, they are probably wondering when the selling is going to subside. This past month HEXO has shown stability, holding onto $2 per share, and many investors are speculating that this could be the bottom.

HEXO released some exciting news this week that enforces their commitment to growing revenues and creating long term shareholder value.

HEXO has made a strong effort to widen its customer base for its Original Stash budget line of dried cannabis flower. The company announced last Friday that they started selling Original Stash in Ontario, which is predicted to be the largest market in Canada for recreational cannabis sales. HEXO’s launch includes OS .220, which is an Original Stash product that blends two indica strains. The products will be sold in a 1-ounce package with a $140 Canadian ($105) price tag. The product will also be sold individually for CA$5 ($3.76) per gram which is substantially lower than many of the LP’s products currently on the market. Regarding the press release, HEXO said OS .220 will be available at all licensed retailers who wish to carry it on the shelves as well as online via the Ontario Cannabis Store.

Statistics Canada recently released data that said the average selling price per gram at retailers currently sits at $9.99. With HEXO offering a product half the price, this could possibly create a huge opportunity for HEXO to stand out and rapidly capture market share in Ontario. Everyone in the cannabis business knows that in order to combat the black market, prices will need to decrease, as licensed producers should be able to undercut the illegal growers and still be able to generate profits due to their low-cost production.

The illegal black market has been a huge concern for licensed producers and the government alike. An estimate from Statistics Canada was released stating that about 40% of cannabis buyers across Canada still resort to the black market. With almost half of the full potential market up for grabs, we feel that this is one great step in the right direction.

“Original Stash is providing consumers with ‘quality weed at legit prices,'” said HEXO in a press release. “Consistent, reliable, and controlled products like this can play a major role in achieving the goals we set out nationally by legalizing cannabis just over a year ago: eliminating the illicit market and protecting public health and safety.”

Other than cheaper cannabis, it’s obvious that the Canadian cannabis market needs to roll out their retail locations at a much quicker pace. If this can happen, HEXO could have a huge advantage as retail rolls out across Ontario.

Many long term cannabis investors are starting to feel that despite the negative environment, there are many catalysts that could very well outweigh the negatives as we head into 2020. With stock prices sitting at 2017 lows, HEXO could be a big winner going into the new year if their new Original Stash is a success. We remain optimistic about HEXO and look forward to a strong recovery for their stock.

(Disclosure: The author owns shares of HEXO)

 


HEXO shares were trading at $2.05 per share on Thursday morning, down $0.08 (-3.76%). Year-to-date, HEXO has declined -40.23%, versus a 26.27% rise in the benchmark S&P 500 index during the same period.


About the Author: Aaron Missere


Aaron is an experienced investor who is also the CEO of Departures Capital. His primary focus is on the cannabis industry. He also hosts a weekly show on YouTube about marijuana stocks. Learn more about Aaron’s background, along with links to his most recent articles. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
HEXOGet RatingGet RatingGet Rating
CGCGet RatingGet RatingGet Rating
ACBGet RatingGet RatingGet Rating
CRONGet RatingGet RatingGet Rating
APHAGet RatingGet RatingGet Rating
TLRYGet RatingGet RatingGet Rating
CTSTGet RatingGet RatingGet Rating
MJGet RatingGet RatingGet Rating

Get Free Updates

Join thousands of investors who get the latest news, insights and top rated picks from StockNews.com!

Top Stories on StockNews.com

NYSE: SPY | SPDR S&P 500 News, Ratings, and Charts

1 Equation Keeps the Bear Market in Hibernation

We just endured our first negative week for stocks (SPY) in quite a while. This article will center your attention on what is truly important to keep riding the bull to new heights this year.
NYSE: SPY | SPDR S&P 500 News, Ratings, and Charts

The Economy Keeps Weakening: 2 Critical Things Investors Need to Know

Today's featured article covers 2 critical tips that investors need to know in light of the weakening economy. Will stocks continue to grow in 2020? Continue reading for more details.
NASDAQ: FB | Facebook, Inc. -  News, Ratings, and Charts

2 Tech Stocks To Consider Buying On Dips

Facebook and Salesforce.com emerged from massive breakouts in late 2019, and are both expecting to see strong earnings growth in FY-2020.
NYSE: IIPR | Innovative Industrial Properties, Inc.  News, Ratings, and Charts

Will Shares of Innovative Industrial Properties (IIPR) Continue Rising in 2020?

Despite the harsh bear market in the cannabis industry in 2019, Innovative Industrial Properties (IIPR) still managed to come out on top.
NYSE: SPY | SPDR S&P 500 News, Ratings, and Charts

When Will This Bull Rally Tire Out?

Typically a stock rally will end when you least expect it. But when you look at the current tea leaves, it does seem like conditions are right for at least a consolidation period. Get the full story below...

Read More Stories


More HEXO Corp. Common Shares (hexo) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All hexo News
Page generated in 1.7475 seconds.