HEXO stock is up over 12% in pre-market trading. Selling at present for $7.83 CAD on the TSX, the climb was almost inevitable. HEXO Corp’s Q2 fiscal 2019 results were released a few hours ago, and with spectacular numbers, investors are happy with the news.
Let’s check in with HEXO stock.
HEXO Stock: Q2 2019 Fiscal Results
Highlights from the results include a whopping increase in gross revenue of 1,269% when compared to the Q2 2018. And a further 144% growth when compared to Q1 fiscal 2019. Overall, the company reported $16.2 million in total gross revenue for the quarter.
The massive difference between 2019 and 2018 is impressive but not surprising. The company has capitalized on the legalization of recreational cannabis, which came into effect in October last year. With cannabis now legal across all Canadian provinces, sales have skyrocketed. But this is a massively competitive market, and with a market cap of only $1.6 billion, HEXO has managed to prove itself a leader in the field despite being significantly smaller than some of its peers such as Aurora Cannabis (market cap of $12.2 billion) (NYSE:ACB).
HEXO Stock: Production
For its size, HEXO Corp (TSX:HEXO) (NYSE:HEXO) has always been rather impressive in its production capabilities. The Q2 results showed it’s on track to be a “six-figure-yield-annually” company with a 39% increase in dried cannabis production over Q1 of 2019. The total dried cannabis produced in Q2 was 4,938 kg.
This was also the quarter where HEXO stock uplisted to the NYSE. Uplisting has increased liquidity by introducing the shares to a wider pool of potential investors. Not only securing the “legitimacy” of this cannabis company, but uplisting has also seen HEXO stock value rise by roughly 80% since January.
HEXO sealed a successful quarter by announcing its acquisition of Newstrike Brands Ltd.
According to the Motley Fool:
“HEXO’s acquisition of Newstrike Brands […] gives HEXO a shot at being one of the biggest second-tier marijuana companies.”
One of the most exciting aspects of this deal is the markets that are now open to HEXO Corp and HEXO stock. The company will be able to market marijuana in eight of Canada’s ten provinces. As it stands, HEXO operates in only the three provinces of Ontario, British Columbia, and Quebec.
The new deal, once closed, gives the company access to over 95% of Canada’s population. It also increases annual output; now HEXO is aiming for 150,000 kilos of cannabis annually.
HEXO stock is reacting well to the Q2 results, and it’s not surprising. HEXO has been a strong contender in the marijuana industry and continues to go from strength to strength.
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