Cannabis stocks have had pretty tough times over the course of the past year or so, and the coronavirus pandemic induced selloff further worsened the situation. HEXO Corp’s (TSX:HEXO) (NYSE:HEXO) stock had also been punished in recent times, but on Monday, the stock rose by as much as 19% after the company made a major announcement.
License For The Processing And Manufacturing Unit
The company announced on Monday that it had been awarded the amendment to its license for the processing and manufacturing unit located at Belleville, Ontario. It is a significant development for Hexo, since due to the amendment to its license, it will now be able to sell a wider variety of products.
The company can now sell tropicals, edibles, extracts, and dried cannabis flowers at its Belleville facility. In addition to that, the amendment also accounts for a production area for beverages. The company tied up with Truss for the production of cannabis-infused beverages.
In other words, Hexo will now have a much higher capability with regards to the production of high margin ‘Cannabis 2.0’ products, and that is a significant positive for Hexo. Considering the fact Hexo has been struggling in recent months, this has come as a major boost for the company and also the investors.
Despite the latest rally in the stock, Hexo has other issues to take care of. Earlier on in May, the company had a major setback when it failed to meet the compliance standards of the New York Stock Exchange. The price of the Hexo stock had gone below $1 a share, and that had resulted in the warning letter from the exchange.
On the other hand, the company has stated that it is considering all possible options, including that of the share consolidation, in order to prop up its share price. Hexo has been six months within which it has to regain compliance, and it remains an issue for the company in the near term. Sign Up below for breakout alerts on $HEXO and other fast-moving stocks.