HEXO stock started the year so well. However, in the last couple of months, it (along with many of its peers) was hammered by an uncertain cannabis market. HEXO Corp (TSX:HEXO) (NYSE:HEXO) share price is now 40% off its highs from earlier in 2019.
The stock is currently selling for $4.91 USD on the NYSE, and at this price, there is growth potential ahead.
Investors must ask; this far from its highs, is it the right time to look at HEXO stock?
HEXO Stock Opportunity?
Noting HEXO Corp's astronomical growth in the last year, it is most likely that these shares will still generate sizeable returns in the year ahead.
Quebec
The pure-play marijuana stock is a leading cannabis producer in its home province of Quebec. It claims a leading market share here in the provinces adult-use recreational market. This gives HEXO stock a clear advantage.
Quebec is Canada's second-largest province in terms of population. The company's long-term supply agreement means it should remain a market leader here for, at least, several more years.
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Partnerships
But what really has investors on their toes is the potential for a major partnership. If HEXO picks up another major partner, then these shares will likely jump.
And CEO Sebastien St-Louis hasn't been shy on the matter. In the company's Q3 conference call in June, he told investors that HEXO Corp is talking with over 60 Fortune 500 companies. The idea is to forge another meaningful relationship with a major player from outside the cannabis industry.
Another potential partnership is made sweeter when we already know that HEXO has a joint venture in place with drinks giant Molson Coors (NYSE:TAP). The pair will develop cannabis-infused beverages for the Canadian derivatives market expected to be legalized later in 2019.
HEXO Stock and the US
Significantly, another major partner could be HEXO's way of entering the US market. It has only begun to make tracks in this direction by forming a US subsidiary in May that focuses on the hemp cannabidiol market. But an additional partnership would help the company grab a share of the US market and lend itself, overall, to securing HEXO's dominance in the cannabis sector.
The Takeaway
There is a lot of competition out there, and this brings risk, but it's hard to not see HEXO Corp generate sizeable returns over the next 12 months while its share price is this far off its highs.
What are your thoughts on HEXO stock?
Featured Image: Canva
