Continued Expansion Pushes Renewed Focus on Hexo Corp (OTCMKTS:HYYDF)

Continued Expansion Pushes Renewed Focus on Hexo Corp (OTCMKTS:HYYDF)

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Hexo Corp (OTCMKTS:HYYDF) just announced that it has reached a construction and licensing milestone with the first phase of its 1 million sq. ft. greenhouse expansion. According to the release, the expansion is ready and licensed on time and on budget for plants to move in. This is key news with shares battling for key support in the $3/share zone. A move back above the $3.75 area would be a critical technical success.

“Receiving initial licensing on our 1,000,000 sq. ft. facility is a huge accomplishment for the entire HEXO team. We are proud that the construction project is hitting all its milestones while respecting aggressive timelines and staying on budget. The new production facility allows us to continue to scale-up which, once fully operational, will give customers across Canada access to HEXO products,” said Sébastien St. Louis, HEXO Corp’s CEO and cofounder. “Our team has been hard at work for the past couple of months nurturing new mother plants and preparing cuttings. We will start moving plants into the new facility with the pre-prepared mother plants and cuttings in alignment with our continuous harvest methodology.”

Hexo Corp (OTCMKTS:HYYDF) trumpets itself as a company that, together with its subsidiaries, produces and distributes medical marijuana products. The company is headquartered in Gatineau, Canada, and, as noted above, just changed its corporate name from “The Hydropothecary Corporation” to “HEXO Corp.” effective August 29, 2018.

HEXO creates and distributes innovative, easy-to-use and easy-to-understand products to serve the Canadian cannabis market. One of the country’s lowest-cost producers, HEXO is rapidly increasing its production capacity in the lead up to the adult-use cannabis market.

The Company currently operates with over 310,000 sq. ft. of production capacity with construction on another 1,000,000 sq. ft. expansion set to be complete by year-end. HEXO will serve the adult-use market under the HEXO brand, while continuing to serve its medical cannabis clients through the well-known Hydropothecary brand.

According to company materials, “HEXO Corp. creates and distributes innovative, easy-to-use and easy-to-understand products to serve the Canadian cannabis market. One of the country’s lowest-cost producers, HEXO is rapidly increasing its production capacity in the lead up to the adult-use cannabis market. The Company currently operates with over 310,000 sq. ft. of production capacity with construction on another 1,000,000 sq. ft. expansion set to be complete by year-end. HEXO will serve the adult-use market under the HEXO brand, while continuing to serve its medical cannabis clients through the well-known Hydropothecary brand.“

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As noted above, HYYDF just announced that it has reached a construction and licensing milestone with the first phase of its 1 million sq. ft. greenhouse expansion.

Recent action has seen 11% tacked on to share pricing for the stock in the past week. Moreover, the company has witnessed a pop in interest, as transaction volume levels have recently pushed 0% over what the stock has registered over the longer term.

According to the release, “The expansion allows HEXO Corp to further establish its position as one of the largest cannabis producers in Canada. The Company has the single largest legal cannabis supply contract in Canadian history as the preferred supplier to the Société québécoise du cannabis, along with supply agreements in British Columbia, Ontario, a strategic investment in the private cannabis retailer Fire & Flower and Truss, a partnership with Molson Coors Canada to create cannabis-infused beverages once regulations permit.”

Now commanding a market cap of $707.32M, HYYDF has a significant war chest ($176.9M) of cash on the books, which is balanced by about $17.4M in total current liabilities. One should also note that debt has been growing over recent quarters. HYYDF is pulling in trailing 12-month revenues of $9.5M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 414.1%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. Sign-up for continuing coverage on shares of $HYYDF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $HYYDF, either long or short, and we have not been compensated for this article.

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