HEXO Equities Warrants Exp 2 Apr 2024 T.HEXO.W.A

RE:RE:RE:NewStrike Summary (Mar 13, 2019)

[quinlash]

Dog, the numbers you are referencing are over a year old, get with the program, HEXO has more than doubled it's sales since then, released top-selling drinks that are beating out Canopy Growth for the top position in Canada and are now being sold in the US through a jv with HEXO's Fortune 500 partner, Molson-Coors.  HEXO is not in a postion where it can expand the operation and product offering through the acquistion of smaller companies which it is picking up for pennies on the dollar.  They are expanding into the US with the recent purchase of the production facility in Colorado.

You are, absolutely and 100%, living in the past and missing the full potential of the Canabis sector moving forward and how well HEXO is getting positioned to not only succeed in that sector but to be a top player, certainly in Canada, likely in the US and potentially even globally through the expansion it is doing into Europe.

Q 

quinlash wrote: NewStrike was a good deal back then and it has proven itself every year afterwards through the sale of the UP! products, no one can dispute that

quinlash wrote: As noted, the Newstrike deal was back in 2019.  Back then the store rollout in Canada was expected to take place at a much higher rate than it actually did, there was also news out speculating on US Legalization within a year or two, making that 2020 / 2021.  In 2020 we seen C-19 occur and this turned federal attention away from everything except for addressing the concerns of the public related to the virus.

Due to slow store rollouts and delays in larger markets coming online HEXO opted to sell off one of the NewStrike Greenhouses.  In early 2021 there was talk about US Feds legalizing Cannabis and the markets responded, including the SP of HEXO.  Again we are hearing more on US legalization which may actually see progress in the coming days.  HEXO appears to be making the moves necessary to enter the US Market with it's purchase of the facility in Colorado and is expanding the product offerings by picking up companies such as Zenabis and 48 North at substantial discounts due to these companies being in financial distress.

The times they are a changin'  I expect the US will indeed legalize and HEXO will be positioned in time to exploit the new opportunities that the US market will present.

Q

quinlash wrote: The purchase of NewStrike occurred on March 13, 2019

Link to Original News Release (March 13, 2019)
https://www.globenewswire.com/news-release/2019/03/13/1752363/0/en/HEXO-Corp-to-acquire-Newstrike-Brands-Ltd.html

The deal provide HEXO immediate access to an addition 8 provincial supply agreements across Canada including Alberta that had the highest number of stores rollout in the shortest period of time.   IMHO that was a great move on the part of HEXO in order to ramp up sales in the shortest period of time.

NewStrike also brough in the Tragically Hip as a partner, which, at the time, was a great way to get exposure for the company.  Since then all indications is that the Tragically Hip and NewStrike parted ways.  In addition to the supply agreements and the marketing aspects and the provincial supply agreements NewStrike provide HEXO with the UP! product line of smokables.  This brand today is one of HEXO's top selling products and continues to bring in healthy margins.

Many speculated that the NewStrike deal was undervalued (at the time) as the Cannabis sector was red hot bad in 2019 however HEXO negoatiated a discount deal on the merger

Link to Article Indicating that HEXO / NewStrike Deal Massively Undervalued
https://seekingalpha.com/article/4249310-hexo-corp-acquires-newstrike-brands-is-massively-undervalued

Due to slower than expected store rollouts in Canada and a lower need for Cannabis production space, HEXO opted to sell off one of the NewStrike facilities so that the money could be used for other operational purposes.  Selling the facility also allowed HEXO to avoid the cost of maintaining the facility as it was not needed.

Times change, now HEXO has drinks rolled out and is making moves to expand operations into Europe and the US, additional growing space could very well be needed to support these new developments hence the moves to pick up smaller companies (again at discount prices) as well as expanding its product offerings.

The new acquistions on the part of HEXO will increase their sales figures and hence demand higher prices from the market once the Zenabis and 48 North Deals complete.  With the US talking about legalization now and so many states already having some level of legalization already in place it is not hard to say that it is just a matter of time before Federal level legalization is in place.  HEXO is entering this market and appears to be ready to take this on... with award winning products, a diverse product offering and with the backing of it's partner Molson-Coors.