HEXO stock is trading almost flat on Tuesday after falling about 18% last week after HEXO Corp (TSX:HEXO) (NYSE:HEXO) released disappointing quarterly earnings.
Partnership with Molson is Important
The cannabis industry may have enjoyed significant growth over the past year or so, but many believe that the next stage of growth is going to be powered by strategic partnerships that push the products into new markets.
The vice president of strategic business development at HEXO Corp, Jay McMillian, said as much regarding his company’s plans of global expansion. In this regard, the executive stated that HEXO’s partnership with Molson Coors Brewing Company (NYSE:TAP) could help in propelling the company towards a global drinks expansion. McMillian made the statement while he delivered a speech at the World Cannabis Conference that was held on Monday.
McMillian said that the distinct advantage HEXO enjoyed over other companies in the United States is that it will be able to create cannabis-infused beverages and sell them at a much bigger scale thanks to its partnership with Molson. Companies that are situated solely in the US without a global partner, on the other hand, can only sell in the states where cannabis has been legalized thus far. He stated that this could prove to be a distinct competitive advantage for HEXO stock.
He said, “Canada is this great experiment, this great place where we can come and establish these high-quality products, this great distribution, be able to see how it works across different demographics, get that feedback from the consumer and then we will move into other jurisdictions whether that’s into the UK, the U.S. or Latin America.”
HEXO stock is trading lower by 0.20% at $5.49.
Rising Popularity for Beverages
The possibility of selling beverages is a particularly enticing one for most companies because it means they can branch into a myriad of products.
Canada, one of the first countries to legalize cannabis, has announced that edibles, beverages, and other cannabis derivative products are going to be legalized in the country on October 17 this year. Many companies are trying to enter the derivative sector to be ready by then, but it is believed that HEXO’s partnership with Molson could prove to be a definite advantage.
Last week, HEXO stock fell as much as 18% after the company reported lower than estimated revenue for the third quarter. Will the derivatives market help to push HEXO stock back up?
Featured image: Canva