HEXO stock is gaining slightly this morning after HEXO Corp (TSX:HEXO) (NYSE:HEXO) announced the launch of its new value brand Original Stash.
Key Development
The cannabis industry may have gone through a bit of a downturn over the past few months, but that has not stopped companies like HEXO Corp from exploring new ways of continually expanding their businesses. One thing that has become abundantly clear since the legalization of marijuana in Canada is that the ‘black market’ still remains a significant threat to legalized companies.
In a new development, HEXO launched its new offering called Original Stash that seeks to provide marijuana at highly affordable rates. As a matter of fact, during the unveiling of the new brand, HEXO stated that customers will now be able to buy cannabis at black market prices.
HEXO Corp revealed that the product is going to be available for adults for $125.70 CAD for on ounce. This works out to $4.49 CAD per gram, and it goes without saying that this is a highly competitive price. The Chief Executive Officer of HEXO, Sebastian St. Louis, spoke about the brand during the launch.
HEXO stock is up 2% at $2.62 on the NYSE, so it seems investors are reacting positively to the news.
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St. Louis continued, “Our aim with Original Stash is to disrupt the illicit market, educate consumers about the value of a regulated and tested product, and drive them to purchase their cannabis legally." This is an inventive new initiative from HEXO and one that is going to be closely watched by the market.
HEXO Stock Fell Last Week
The news comes as a positive for many investors in HeEXO stock and the larger cannabis sector after the company set off a wave of panic over last week. HEXO cut its projections for this year's fourth quarter and blamed a range of factors for the development. HEXO stated that the establishment of retail outlets grew at a slower pace than expected.
On the other hand, the regulatory delay with regards to derivative products from the government and pricing pressure nationally were also blamed. The announcement had a much wider effect. It not only resulted in a significant drop in the price of HEXO stock but also resulted in deep falls in the stock price of many other stocks in the sector.
However, it remains to be seen if the Original Stash announcement can help in any kind of recovery for the stock.
Featured image: Canva
