Marijuana Stock HEXO Enters Israel
Last week, HEXO Corp (NYSE: HEXO) (TSX: HEXO) announced its entry into the Israel markets through a two-year contract with Breath of Life International Limited (BOL), a renowned medical cannabis company in the country. The marijuana stock which lost more than 50% in 2020, climbed about 6% last Thursday on the news. Why is HEXO’s Israel entry a big deal for this marijuana stock?
What’s this Deal all about?
HEXO has already transported its first shipment of cannabis products weighing 493 kilograms amid tight international safety checks due to COVID-19. The pot stock has designed its immensely popular flower products in a 10-gram pack exclusively for the Israeli markets. Under the agreement, the marijuana giant’s products will be specially adapted for the medical cannabis patients in Israel strictly as per the nation’s regulatory norms.
Partnering with BOL will widen HEXO’s access to its well-established pharmacy network Israel. This also includes Super-Pharm, the country’s largest pharmacy retailer spread across 258 locations. Upbeat about the company’s expansion, HEXO’s CEO Sebastien St-Louis said, “Launching the HEXO brand in Israel is a testament to the continued work we are doing to expand our international footprint and find new markets for our award-winning products.”
Israel: One of the World’s Strongest Medical Cannabis Markets
Investors are particularly excited about HEXO’s Israeli partnership because the country has immense prospects. Israel is a global front-runner in cannabis innovation and research with government backing. The medical cannabis market in Israel is extremely strong and there is increased clamor for decriminalization of recreational use of marijuana throughout the nation.
Notably, Israel’s climate is extremely conducive to cannabis production and the cost of production is much lesser than North America’s.
According to the Los Angeles Times in May 2019, Israel has nearly 46,000 registered patients for medical cannabis, while the waiting list included thousands more. This indicates a lot of untapped potential in Israel’s medical marijuana market. Moreover, there isn’t a clear market leader in the country. This is primarily the reason why many North American companies are targeting it.
Partnership with BOL Can Help HEXO Move Towards Profitability
HEXO is currently operating under immense pressure. It is exploring various partnerships and it has also shut down one of its facilities in Ontario. However, this marijuana stock, like most other marijuana stocks, still isn’t profitable.
Teaming up with BOL in Israel is likely to open up a massive opportunity for the pot producer to turnaround its position for good. It is likely to boost the company’s international sales and in turn help it to transition to positive EBITDA. We now need to watch out how well HEXO continues to capitalize on this opportunity.
Marijuana Stock HEXO Enters Israel
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