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In 2020, HEXO Corp (TSX: HEXO) (NYSE: HEXO) captured the attention of the market and proved to be a turnaround strategy in the making. Due to the success of the business in 2020, the stock market rewarded the Canadian cannabis company, and this is a trend that we are closely following this year.
One of the primary reasons to explain HEXO’s turnaround in 2020 is related to the advancements that it made on the US side of the business. Another key reason for the turnaround is related to its joint venture agreement with Molson Coors Beverage Company (TAP) to capitalize on the cannabis beverage market. We are bullish on HEXO and Molson’s potential to capitalize on the global cannabis beverage market and are favorable on the recent additions that it made to the team.
Yesterday, HEXO reported a significant development as it relates to the opportunity in the US and appointed Charles Bowman as General Manager of its US operations. He will immediately join the team and adds nearly three decades of experience to the HEXO USA team. We consider his appointment to be a strategic addition and will monitor how he is able to advance the US side of HEXO’s business.
As General Manager, Bowman will be responsible for implementing all aspects of HEXO’s operations in the US. These responsibilities include but are not limited to the commissioning of production facilities, overseeing operations, managing the supply chain as well as logistics, and making strategic additions the team.
With Bowman’s addition to the team, Truss Beverages (the name of the joint venture between Molson and HEXO) is better positioned to ramp up production capacity and support the growth initiatives of the US CBD beverage brand. In Canada, Truss Beverages sells THC beverages, and we expect this product to be sold in the US once the federal government legalizes THC.
We expect the addition of Bowman to support the advancement of HEXO’s focus on identifying potential non-beverage consumer packaged goods (CPG) partners. We are favorable on the potential impact that Bowman could have on the US side of HEXO’s business and believe that our readers need to be aware of this.
Throughout his career, Bowman has proven that he can strengthen customer partnerships, customize innovation through his extraction expertise and accelerate growth in customer facing operations. An executive known for talent and leadership development, we expect Bowman to add a level of credibility to the business and find this to be an important aspect of the brand.
Bowman’s experience in commercial growth and operations are expected to be instrumental as HEXO continues to expand its US footprint. Over the coming months, HEXO plans to begin deploying capital to start to build state-of-the-art production and processing facilities in Colorado. We expect the Colorado asset to serve as a long-term growth driver for the entire business and consider the location to be of strategic significance.
HEXO is executing on a multi-national growth strategy and we are favorable on how the story has been advancing. The recent trend for HEXO has been to the upside and we will monitor the trend from here.
If you are interested in learning more about the growth prospects that are associated with the US side of HEXO’s business, please send an email to support@technical420.com with the subject “HEXO’s US Business” to be added to our distribution list.
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