One of the companies sitting outside of Canada’s “Big Five” producers is getting tired of being overlooked. So it’s heading to the largest stock exchange in the world as early as next month.
U.S. trading exchanges are back open this morning, even if for an abbreviated session.
Through the end of the year, cannabis stocks bear watching as closely as ever. That’s because historic cannabis stock price surges – two of the top five ever – occurred in the last two years during the window between Thanksgiving and the first trading day of the new year. And those happened without the kind of feverish IPO atmosphere we’re seeing now.
One company looking to take advantage of this, and a ton of expected newfound liquidity, is Hexo Corp. Hexo, the Quebec-based producer formerly known as Hydropothecary, is about to list on the New York Stock Exchange within weeks or even days, as long as its application process doesn’t hit an unforeseen snag with regulators.
The move makes sense for the largest cannabis companies in the world as long as they have no operations in the United States – that would eliminate them from NYSE eligibility due to lingering federal prohibition. After all, it is the largest equity market in the world.
That’s part of why four of the five largest Canadian producers have “uplisted” on the NYSE or Nasdaq. And Tilray Inc. actually debuted directly on the latter and enjoyed one of the quickest price surges in cannabis IPO history.
In market cap, Hexo sits just outside of the top five, which sticks in the craw of company CEO Sebastien St-Louis. He seems more than a little preoccupied with the fact that Hexo has not had the same kind of price run-up as Cronos Group, which used to own a significant percentage of the company, and Canopy Growth Corp., among others. I’m not sure that should be a motivator, but it certainly is with St-Louis.
That said, the move will help Hexo with its global ambitions once it can start consistently delivering product. Hexo already has some great product supply agreements, with a huge branding advantage in its home province filled with buy-local loyalists.
As we get closer to an expected early December debut on the NYSE, don’t expect St-Louis to be bashful or close to the vest with Hexo’s plans. More than perhaps any other cannabis CEO, he acknowledges that Hexo – which already has a partnership with Molson Coors Canada, though not to the level of Constellation Brands‘ mega-deal with Canopy – could be fodder for a buyout.
“In five years, there may be four global cannabis companies, and whether Hexo is a buyer or a seller on that journey, what matters to us is for our shareholders to participate in that to become one of the four,” St-Louis said.
If his frank comments seem to stick out like a sore thumb a bit, it’s because they do – he does. And I like that.
I find it refreshing to hear from the small number of CEOs who speak their mind and give real takes rather than go through something they clearly rehearsed with a legal team or PR staff.
Thanks for being an important member of the National Institute for Cannabis Investors,
Executive Director, National Institute for Cannabis Investors
P.S.: Hexo’s migration to the NYSE is big news for the cannabis community, but here at NICI, we know there is a bigger trend you should be focusing on. While the new cannabis craze might be uplisting to a U.S exchange, the real moneymaking champions are still going to be on smaller exchanges like the Canadian Securities Exchange (CSE). That’s where investors have the real opportunity to make the biggest returns off this exploding new industry. Just click here to find out more.