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Hexo Aims To Disrupt Illicit Cannabis Market, Launches New 'Value' Brand Original Stash

Nina Zdinjak

HEXO Corp (TSX:HEXO)(NYSE: HEXO) announced Wednesday the launch of its new value brand Original Stash. The idea behind starting this brand is to confront and beat the illicit market.

Hexo said the latest Statistics Canada’s National Cannabis Survey revealed more than 40% of Canadians buy cannabis from illegal markets mostly because of more affordable prices. Among them are many consumers who aren't aware they're buying illegal cannabis because those illicit distributors are doing a good job deceiving them.

“It is becoming increasingly difficult for the average consumer to distinguish products that are legal, versus those that are not. Illicit cannabis distributors have gone as far as include the mandated Health Canada warnings and THC disclaimers,” Sebastien St-Louis, Hexo CEO and co-founder said in a statement.

“Illegal cannabis websites are well built, allow consumers to purchase online, and products are delivered to their doors. But we know that illegal cannabis products can—and often—contain heavy metals, pesticides, and other contaminants, and that concerns me deeply.”

Click here for more information about the upcoming Benzinga Cannabis Capital Conference Oct. 22-23 in Chicago.

Hexo’s Original Stash will offer consumers 28 grams (1 oz) at illegal market prices, at a retail price in Quebec of $125.70 including sales taxes, equivalent to $4.49 a gram all in, the company said. The new brand’s first product, OS.210, is a hybrid sativa dried flower blend at 12%-18% THC, that will hit SQDC retail shelves on Oct. 17.

“Our aim with Original Stash is to disrupt the illicit market, educate consumers about the value of a regulated and tested product, and drive them to purchase their cannabis legally,” St-Louis said. “We’re now competing directly with the illicit market and providing consumers with an affordable, controlled, quality product. Moreover, we are giving consumers the option of less packaging in a 1 oz format, which we know is a priority for so many.”

Hexo's stock closed Tuesday at $2.56 per share.

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