Cannabis stocks have come under intense pressure.
All thanks to HEXO Corporation, which warned to a revenue shortfall thanks to slower sales. The company also pulled its 2020 financial outlook because of unpredictability.
“Slower than expected store rollouts, a delay in government approval for cannabis derivative products and early signs of pricing pressure are being felt nationally,” the company said, as quoted by Reuters. “The delay in retail store openings in our major markets has meant that the access to a majority of the target customers has been limited.”
However, there is a catalyst many are overlooking.
Cannabis 2.0 Launches Thursday, October 17
Just a year after Canada legalized dried cannabis flower, oils, and sprays, the country is expected to legalize edibles, beverages, and topicals on Thursday.
Even HEXO should benefit from that after their curveball took the sector down.
Remember, HEXO’s partnership with Molson Coors Brewing will allow it to profit from cannabis-infused drinks. HEXO has also gotten involved with gummies and premium vapes.
Aurora Cannabis should benefit after expanding into edibles, vapes, and concentrates.
“Aurora is the world’s leading producer of high-quality cannabis and we’re ready to introduce high-value product additions to this improved, federally legal market,” said the Company’s CEO Terry Booth. “From the beginning, we’ve invested in industry-leading production and distribution technology, and in consumer research to drive products to market that consumers will desire. These things, together with the dynamic partnerships we’ve entered into the accessory and technology fronts, position us well for this new market launch in December as per Health Canada’s recent regulatory amendments.”
Canopy Growth may benefit from its launch of edibles, beverages, and vape products.
While the industry is facing considerable headwinds, there are bright spots to be found.
In addition to Cannabis 2.0, we have to remember that many more U.S. states may soon approve cannabis use. Plus, cannabis is also a key topic for many presidential election platforms. Given time, these hiccups should pass, leading to wild opportunity.