2022 has been a challenging year for the North American cannabis and this is especially true for HEXO Corporation (Nasdaq: HEXO) (TSX: HEXO).
So far this year, the Canadian Licensed Producer (LP) has lost more than 75% of its value and we believe the future of the business is very uncertain. In order for HEXO to remain a viable business, the management team will need to be able to report several major developments and we think this is an unlikely outcome for the company.
Today, we highlighted 3 recent announcements by HEXO so our readers can have a better understanding on the trouble the business might be in. The 3 developments our readers should be aware of are the following:
- August 30th – HEXO formed an exclusive partnership with Mike Tyson to produce TYSON 2.0’s products in Canada. The products are expected to launch soon and include flower, pre-rolls, edibles, and vapes.
- July 27th – The Canadian LP received a 180 calendar day extension from the Nasdaq to regain compliance with the minimum $1 bid price requirement for continued listing on the exchange. We believe HEXO will conduct another reverse split to comply with the $1 minimum bid requirement.
- July 12th – HEXO formed a strategic partnership with Tilray Brands, Inc. (Nasdaq: TLRY) (TSX: TLRY) which provides the embattled Canadian LP with a recapitalized balance sheet and the financial flexibility it needs to accelerate the transformation of the business.
Although we are favorable on HEXO’s relationship with Tilray Brands, we have a cautiously optimistic view on the business as a standalone company. In order to stay viable, we believe the company needs to be acquired by Tilray and will monitor how the story transforms over the coming quarters.
If you are interested in learning more about the strategic partnership between HEXO and Tilray Brands, please send an email to support@technical420.com with the subject “HEXO and Tilray Brands” to be added to our distribution list.