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HEXO Corp. Contract Should Solidify its Quebec Leadership Position

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In this market news, HEXO Corp. (TSX:HEXO), one of the Canadian marijuana stocks, expects to be the cannabis market leader in Quebec with an anticipated 35% market share

SmallCapPower | September 21, 2018: HEXO Corp. (TSX:HEXO) Wednesday announced that it has signed a contract with the Societe Quebecoise du cannabis (SQDC) for Quebec adult-use web store orders. HEXO, one of the Canadian cannabis stocks, will be collaborating with Metro Supply Chain Group Inc. for operating their first 58,000 sq. ft. Montreal -based warehouse and distribution facility centre. The facility will be storing products from all the licensed producers having contracts with the SQDC, thereby providing 35 new jobs in Quebec.

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HEXO Corp. has chosen Montreal as its location for the distribution centre because of the facilitation of logistics as well as being near to a large Quebec population centre. Together, HEXO and Metro will combine forces to serve consumers via the e-commerce platform, the SQDC online webstore.

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HEXO Corp’s Vice-President of Sales Sonia Isabel said, “We are extremely proud to announce a distribution centre in Montreal, in collaboration with the SQDC and Metro Supply Chain Group, to serve the adult-use cannabis market. Being invited to collaborate on this distribution centre speaks to our proven reputation for exceptional customer service and order fulfillment.”

HEXO has received accreditation from the Autorité des marchés financiers to contract with government organizations such as the SQDC. This accreditation is a mandatory requirement for companies having over one million dollars in business with Quebec government for both services and the supply of products.

“Metro will always have its roots in Quebec. It’s very meaningful for us to be working as a partner with the SQDC and HEXO, another Quebec company,” remarked Metro CEO and Founder, Chiko Nanji.

HEXO expects to be the cannabis market leader in Quebec with an anticipated 35% market share in that province for Year 1 of recreational legalization in Canada.

Headquartered in Quebec, HEXO Corp. is a low-cost producer of cannabis focused on product innovation and quality. The Company currently operates with ~310,000 sq. ft. of production capacity with construction of another 1,000,000 sq. ft. expansion set to be complete by 2018-end. HEXO currently trades at a market cap of ~$1.6 billion with a price-to-book multiple of 4.99x.

Disclosure: Neither the author nor his family own shares in the company mentioned above.

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