Canadian Cannabis Company Hexo to set foot into the US
With the opening of a new Colorado facility, the company will now also be producing weed in America.
The Canadian manufacturer Hexo Corp. (TSX: HEXO) (NYSE: HEXO) makes its first foray into the American pot market by closing a deal to purchase a 50,000 square foot facility in northern Colorado. On Friday, the Ottawa-based company announced it would purchase its first facility in the United States through a wholly-owned subsidiary in the United States. The site will be "zoned for the production of a variety of cannabinoids and will have multiple operational options," Hexo added. With cannabis illegal in America at the federal level, large Canadian weed companies have waited patiently on the sidelines to enter the lucrative market in the states. After months of speculation, Washington D.C. said they will be putting a major cannabis bill in the coming weeks But Hexo appears to have found a loophole to legally enter the emerging state market before major federal reform is passed. CEO Sebastian St. Louis said the facility will allow his company to expand its truss joint venture with Molson Coors to produce CBD-infused beverages. In January, Hexo and Molson launched cannabidiol beverages in Colorado under their Verywell brand to test the products before looking for new CBD markets in the states. St. Louis said the Colorado facility will offer Hexo the opportunity to begin production and forge new partnerships in non-beverage cannabis consumer products. While Hexo did not reveal any financial details about the facility in Friday's statement, the company issued a prospectus on May 7th detailing its plans to purchase and convert a manufacturing facility in Colorado. In the filing, Hexo said it expects the plant to be purchased for $ 6 million, with an additional $ 16.5 million to $ 49.5 million for retrofitting. The company notes that it has formed a new subsidiary, Keystone Isolation Technologies USA, with joint venture partner Chroma Global Technologies Inc. to support its US expansion plans. Not only does the new subsidiary give Hexo a unique opportunity to enter the Colorado CBD and cannabis market, but the company says it also "aims to enter select US states ... to the extent that these activities are fully comply with applicable laws. "