It is now a well-established fact that 2019 was a disappointing year for cannabis stocks as the sector suffered from a range of structural issues, and those issues still exist. HEXO Corp (TSX:HEXO) (NYSE:HEXO) had its share of suffering too, as HEXO stock tanked from $8.40 a share back in April to below $1.30 at the time of writing.
Will the company be able to bounce back by leveraging the cannabis 2.0 opportunity? So far, HEXO has taken many of the right steps to become an important player in the 2.0 industry.
Key Developments
However, things have not worked out as well as one would have thought. The company has emerged as the biggest supplier of cannabis in the province of Quebec, but to HEXO’s dismay, the authorities raised the minimum age for cannabis use to 21.
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On the other hand, the company has teamed up with Molson Coors Canada to create a joint venture named Truss, which will be involved in making cannabis-infused beverages. Lastly, the acquisition of Newstrike Brands last year managed to expand HEXO’s footprint considerably.
At the time of writing, HEXO stock is down 7.25% at $1.28 on the NYSE.
Experts believe that with the advent of cannabis 2.0, HEXO Corp could find an opportunity to grow substantially and deliver on the faith of its current shareholders. The cannabis beverage market is expected to be quite big, and through its joint venture with Molson Coors (NYSE:TAP), HEXO stands a great chance of making a mark.
The edibles space presents a great opportunity for HEXO as well. However, competition in the edibles niche is going to be quite intense, so the company has its work cut out for it. In such a situation, experts believe that contrarian investors could take a small position in HEXO stock this year. A bounce from the emergence of cannabis 2.0 could help the stock later this year.
What do you think?
Featured image: Canva
