Please ensure Javascript is enabled for purposes of website accessibility

Hexo Receives Expanded License to Use Its Main Facility to Produce Cannabis Beverages

By Eric Volkman – Jun 2, 2020 at 4:47PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Ontario site will produce the drinks for Truss Beverages, Hexo's joint venture with Molson Coors.

HEXO (HEXO 5.57%) has cleared a major hurdle for the production of cannabis-infused beverages. The company announced Monday that it has received a license amendment for the range of marijuana products it can make at its production and processing facility in Belleville, Ontario.

The amendment granted to the Canadian marijuana company allows it to market drinks, as well as the previously allowed extracts, topicals, edibles, and dried and fresh cannabis flowers. 

Marijuana infused drinks next to an ashtray containing a marijuana cigarette, with a lighter nearby.

Image source: Getty Images.

HEXO is particularly eager about the beverage category, perhaps because it has a heavyweight partner in that business -- the Canadian wing of brewer Molson Coors (TAP 0.21%). HEXO and Molson Coors have formed Truss Beverages, a joint venture that will develop and sell cannabidiol (CBD)-infused drinks.

Last October, Canada's so-called "Cannabis 2.0" legalization kicked in, sanctioning the production and sale of cannabis derivative products. In the wake of that, it was announced that Truss Beverages was gearing up to produce a line of six CBD-laced beverages for the Canadian market. 

Truss will gain a significant advantage from being able to make these drinks in Ontario. It is by far the most populous of Canada's 10 provinces, and contains both the country's largest city (Toronto) and its capital (Ottawa). 

The company pointed out several other advantages. "HEXO's Belleville facility is a purpose-built manufacturing center," the company wrote in a press release. "By using specifically designed automation and best-in-class cannabis technology to streamline our processes, we are focusing on long-term cost reductions and improvements to our portfolio wide gross margin."

On Tuesday, however, HEXO's share price fell by nearly 5.1%. That was a worse performance than that posted by numerous peer marijuana stocks, and also contrasted with the gains of the major U.S. equity indexes.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends HEXO. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

HEXO Stock Quote
$0.18 (5.57%) $0.01
Molson Coors Beverage Company Stock Quote
Molson Coors Beverage Company
$47.59 (0.21%) $0.10

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.