We all know that in the end there is only going to be two or three major cannabis players that take up a majority of the market. The two clear front runners to do so are Hexo Corp and Aphria currently. Who will be Pepsi and who will be Coke? Time will be the true verdict. But investing in Pepsi or Coke in their early stages netted insane gains for early investors. The same will happen with Hexo and Aphria.
Hexo Will Be Coke
Aphria was actually my first pick to win this race, and I will never sell the shares I got for 7$, but Hexo is beginning to look like they are going to be number one in the global market. Hexo is making big and strategic moves in this race to become the top cannabis brand across the globe. Their joint venture with Molson Coors is the key to their path to global success. Hexo, without a doubt, has control of the cannabis infused beverage market. They currently have the top 4 and number 6 bestselling cannabis infused beverages in the Quebec market right now. Additionally they have hit the ground running with their beverages in US markets, recently releasing their Verywell brand in Colorado. This early move into the US establishes their brand, earlier than competitors, and will give them the advantage when there other products can be brought across the border. Their Original Stash brand is also selling extremely well in Canadian markets right now. I am excited to see their earnings report, which comes out in March. I believe Hexo will have at least 30 million in revenue if not more. People are underestimating how big the beverage industry can be. Hexo is already seeing a rapid increase of market share being taken by beverages. In 3 months. it went from 1% to 2% of the market share. Just a reminder, Canadians are limited by how much THC-infused beverages they can buy. The government is expected to loosen the restriction this year, which will benefit HEXO extremely. Hexo is expecting beverages will take up 15% of the market share. There is a $300 billion global cannabis market, and 15% of that would be $45 billion. If Hexo is right, they are looking at taking $30-$40 B in beverages alone. Keep in mind, Hexo is currently around $1 B market cap. Aphria has them beat on currently on bud sales, but Hexo is catching up fast, and their early entry into the US markets, which establishes their brand, may be what makes Hexo number one in bud as well. 132 institutions are invested in Hexo. Bank of America, JP Morgan, Goldman Sachs, are just some of the big names investing in Hexo. Multiple ETFs are holding Hexo as well. Hexo could take 30%-50% of global bud sales once all is said in done, which would be $90B-$150B of the global market. Add this on to their beverages, Hexo could take $120B-$190B of the global market! Share price would be in the range of $1000- $1600, but there would be multiple splits along the way. This is why I stated in my previous article that I think Hexo could go to $400 and that would be relatively easy. I know your thinking this is bull shit, but people probably thought the same when Coke was under $1 B market cap, and today stands at $220 B market cap. Aphria is a great investment as well, as it will easily pass into triple digits one day, but Hexo is a once in a lifetime investment. I am telling you now, don’t miss out on this investment. This is years and years away from happening, but it will be hard to find another stock that has so much potential long term. We are only at the beginning of the growth of the cannabis industry, and to worry about short term trends in the market, I think is one of the dumbest things I see. Sit back and let things play out. Who knows, Hexo may be hitting 100 B market cap one day.