HEXO take a step closer to the top 3

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Yesterday, HEXO Corp. (HEXO-TSX HEXO-NYSE) released its financial results for the third quarter, during which the company generated $ 13 million in revenue.

Beyond these revenues, which are similar to those of the last quarter due to the increase in production in the new greenhouse, CEO Sebastien St-Louis gave more details on the company’s plan to become the world’s top 3 in the coming years.

Intellectual property

One of the most important points is the research and development part of the company that will allow them to stand out from the other producers by creating innovative products and effects.

We now have 25 PhDs on staff. They’re focused on developing new and innovative products for the market, best-in-class technology for our powered by HEXO experiences. Building on our innovative technology is critical in building brands. We believe that brand will be the final moat by which CPG cannabis companies are differentiated, but in the meantime, those products and that moat will be built on distribution and technology, having consistent quick on and quick off cannabis experiences that includes sleep, sport, focus, diets, sex and fun, delivered through a full range of powered by HEXO products is what we’re striving to create.

Hub and spoke

Hexo distinguishes itself from other producers by its business plan of partnership with fortune 500 companies by inserting the technology “Power by HEXO” inside and using their already established distribution channels

So as we’re focused on the technology and supply chain piece, those partners are bringing a deep understanding, a consumer occasion, the international distribution piece. And of course, the base product, which is very important. Because there’s really two parts to creating awesome cannabis products, it has to work and it has to work better than the rest. And so HEXO has got that covered. But I do think one risk that most cannabis companies are ignoring is that, it will be very difficult for a cannabis company to make a better chocolate than the Nestle, to make a better face cream than L’Oreal and a better beer than a Molson. So that’s why I think our strategy fundamentally leads to better products, which will lead to better success in market.

HEXO US in 8 states for 2020

A few weeks ago, HEXO created a company “HEXO USA” to prepare the land for its entry into the territory in 2020 with hemp products

I’m committed to be in the U.S. in 2020. I think we can do multiple states, so the number I mentioned is eight. I think we could do those states legally with powered by HEXO non-THC based experiences, so that’d be focused sport and sleep to start. We think we can enter with our Fortune 500 partners in our hub and spoke strategy.

I think we can use all that in our formulation technology and are powered by HEXO team to gain — to essentially leapfrog the multi-state operators. So instead of being limited to say 60 in individual retail stores, our strategy is to go with non-THC experiences at first through traditional retail where we could get a listing in a traditional retail like our Walgreens or CBS thereby getting thousand plus stores at once

Futur of cannabis

But it’s when CEO St-Louis talks about the future of the cannabis market and his company that all his excitement can be felt

What I’m excited about is the future, right, if I’m excited about a two minute onset, I’m excited about a 45 minute onset, I’m excited about diet experiences, a sparkling water where it reduce your appetite using the ingredients in cannabis that are non-psychoactive. These are all things that R&D teams are working on and I think that’s going to provide really exciting roadmap for the next five years. Today, our starting lineup is best-in-class, it’s better than anything that exists on the planet that I’ve seen and so I’m tremendously excited about that.

This article is written and published by The Cannabis Stock

Disclaimer : The Cannabis Stock wants to promote the cannabis market with the best publication on the market. The Cannabis Stock does not recommend selling or buying any of the company mentioned and is not responsible for any losses that may result.

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