Shares of HEXO (NYSE:HEXO) headed higher Wednesday morning after the cannabis company's joint venture with Molson Coors (NYSE:TAP), Truss CBD USA, announced the U.S. launch of a new line of nonalcoholic CBD-infused beverages. As of 11:31 a.m. EST, the stock was up by 13.8%.
There's one important detail to consider regarding Truss CBD's U.S. launch of its CBD beverages: They'll only be available in Colorado. In light of that, some might view HEXO's Wednesday gains as excessive.
However, Truss has achieved considerable success in Canada. It's the No. 1 cannabis beverage brand in the country. HEXO reported that sales of Truss beverages soared 54% year over in the fiscal quarter that ended Oct. 31.
Truss' Veryvell line of CBD-infused beverages also has another thing going for it. Molson Coors, which has a major presence in the Colorado beer market, will be the exclusive distributor of the beverages.
This is just the beginning of HEXO's plans to expand into the U.S. market. CEO Sebastien St-Louis stated that the company intends to invest more heavily to support the joint venture. He also said that the company is pursuing partnerships with other players in the consumer packaged goods industry beyond the beverage segment.
HEXO is also undoubtedly hopeful that the Democratic Party's control of the White House and both congressional chambers could lead to federal cannabis reform. That could pave the way for the company to move even more aggressively into the massive U.S. market. 2021 just might be a breakout year for this Canadian marijuana company.