RE:RE:RE:HEXO Sharecount on Par with PeersKeeler wrote: I agree Rota - and I said from the day Hexo announced the Zenabis acquisition that it was a bad business decision - and that Hexo should have got involved with the cash it had at the time in U.S. vertically integrated MSO's
Instead, they not only wasted the money on Zena (and subsequently closed it's facilities), after doing the same thing with Newstrike - SSL carried on buying 48N (now closed down) and overpaying for Redecan - meanwhile Hexo's own 1 million sq ft B9 sits empty and unused due to lack of demand.
Now, Hexo cant pay it's bills let alone buy a US MSO - Hexo investors only hope for some kind of their investment recovery is US legalization
in the hope that some of it's empty facilities are purchased by US vertically integrated MSOs looking for production space. Hexo itself is finished
Rotaluceps - (2/21/2022 7:18:32 PM) RE:HEXO Sharecount on Par with Peers
The problem is the competition is so stff that they all have problems to generate good revenue. The best option is to be on the side or shorting. There is no growing revenue good enough to support an expansion for them all. We will know in a few years which ones will be the better ones, then again, it will not be the klondike. The Canadian market is not big enough because there are too many competitors to share the pie. Thank to Trudeau lacks of vision. Forget about an expansion in the US that will take years to come (Democrat fooled you) where the competition is already well established.
To enter the US a Canadian company will need cash to buy an US MSO. Even the sales of Fire and Flowers are declining in many stores.
When it is legallised at the fed level in the US, and it will take years, the MSOs will shut down growing facilities to concentrate their production thus saving money. A MSO must grow its cannabis in each state they do business or buy it from a third party because it can't cross the states until it is federally legal. Anyway, with the money Hexo would get selling them, it wouldn't change a thing except saving a few $.
The FED receive a lot of taxes (read the complaint from the companies) where it is legal at the state level .The fed doesn't seem to be in hurry because of this and obviously, opening the border to more competition from Canada will not get the FED more money.
Another point is that if it is legal federally, it doesn't mean that the states will follow. Obviously it will encourage them do to so but some stubborn states could take a lot of time to follow, even years. It is the same where it is legal in a state where many cities don't allow the sales.
In politic, things can take a lot of time. A new mayor or a governor favorable to the legalisation take years to elect unless it is done by referendum.
The way the laws are passed (package deal) is quite inefficient in the US, having to pass both the House and the Senate, and the laws in the package that don't please either of the two parties, including the feuds. Anyway, the legalisation will not save the Canadian companies that don't have cash. To have cash the Canadian companies need profit but the revenue are not there. A small private company will be viable.