Hexo Corp (OTCMKTS:HYYDF) Gains Momentum On Acquisition Target Prospects

Hexo Corp (OTCMKTS:HYYDF) is skyrocketing amidst acquisition target talks, on the company strengthening its prospects in burgeoning Canada’s cannabis market. The announcement that the company is set to manage a warehouse and distribution operation for the provincial government is one of the developments that has caught investor’s attention.In addition, the company has embarked on an aggressive expansion drive as it looks to strengthen its operations in both medical and recreational marijuana markets. Europe expansion plan is another development that continues to enhance investor sentiments in the stock.

Hexo Corp Price Analysis

Renewed investor interest in the stock has seen the stock climb higher as the upward momentum continues to gain pace. The stock is currently flirting with record highs, as underlying fundamentals support further movement on the upside. HYYDF Daily ChartThe stock has pulled down to $6.50 after registering a new 52-week high of $7.06 a share. The minor correction faces immediate support at the $6 a share handle, on further sell-offs. A breach of the $6 a share handle could see the stock plummeting to the $4.20 level, regarded as the next support level.Further movements on the upside should experience resistance at the $7 a share handle. A breach of the resistance level should see the stock climbing high, on its way to registering a new 52-week high.

Hexo Corp

Hexo Corp together with its subsidiaries cultivates produces and distributes Marijuana as well as its by-products. The company’s main goal is to create and distribute innovative easy to use and understand products, for the Canadian cannabis market. The company is planning to expand its wings into the Canadian recreational marketplace.

$1 Billion Distribution Contract

Hexo Corp meteoric rise in the market does not come as a surprise but at the backdrop of strengthening underlying fundamentals. Renewed investor interest in the stock follows the signing of a three year deal with Societe Quebecoise du Cannabis (SQDC). The deal paves the way for the company to manage warehouse and distribution operations for the provincial government’s adult use store orders.The company has already signed a five year $1 billion contract with the province having also secured an online distribution contract. Ontario and British Columbia are other provinces that the company has set sights on, as it eyes a bigger share of the recreational use cannabis market.In addition, Hexo has confirmed it is expanding its reach in Ontario through a 25% interest in a two million square facility in Belleville. The company intends to use the facility for the manufacture of its advanced cannabis product lines including cosmetics, beverages, and edibles.Hexo boasts of more than 300,000 square feet of production space which is set to expand by an additional 1 million square feet by the end of the year. The increased production capacity should allow it to be in prime position to pursue opportunities in the recreational use marketplace in addition to the medical marijuana marketplace.

European Expansion Drive

North America is not the only marketplace where Hexo Corp is pursuing opportunities in the burgeoning cannabis marketplace. The Company has also set sights on Europe cannabis marketplace that is also growing at an impressive rate.Hexo is in the process of setting up a production processing and distribution facility in Greece. The company has since inked a partnership with Greek company, Qannabos for the development of a 350,000 square foot facility that it is to use to pursue growth opportunities in Europe.

“By bringing brands powered by HEXO, our infrastructure and our know-how to Europe, we will be well prepared to serve a burgeoning market. This new capability will allow us to bring even more value to our hub and spoke partners in the beverage, cosmetics, and food space by giving them access to licensed cannabis infrastructure and brands in Europe,” said Sebastian St-Louis

Establishing operations in Greece Is the first step in Hexo Corp’s push for first-mover advantage and market share in the regions adult use marketplace. The marketplace is poised to be worth $110 billion by 2028, Greece had already legalized recreational use.

Bottom Line

Hexo Corp prospects and sentiments have strengthened a great deal in the second half of the year. The company moving to strategically position itself as a key player in Canada’s recreational use marketplace continues to excite investors. Setting sights on European cannabis marketplace has also strengthened the stock’s sentiments in the market.The stock looks set to continue powering high as the company emerges as an acquisition target as large firms look to gain and strengthen their prospects in the burgeoning sector.We will be updating our subscribers as soon as we know more. For the latest updates on HYYDF, sign up below!Disclosure: We have no position in HYYDF and have not been compensated for this article.