Canadian cannabis company HEXO Corp. has established its U.S. presence with the acquisition of a production facility in Fort Collins, Colorado.
“This will be the first expansion into the U.S. market,” HEXO general manager of U.S. operations Charles Bowman told Brewbound. “There’s more forthcoming, but this is the bedrock. This is our foundation.”
“The Colorado facility will allow us to successfully execute on our U.S. strategy, which includes supplying high quality Powered by HEXO technology and leveraging our intellectual property portfolio across the United States,” CEO and co-founder Sebastien St-Louis said in a press release. “The facility will also provide us with the necessary infrastructure to continue expanding our joint-venture with Molson Coors to create Truss CBD-infused beverages, while also creating the necessary capacity to support future, non-beverage CPG partnerships.”
HEXO and Molson Coors first partnered in August 2018 on the eve of Canada’s federal legalization of recreational cannabis. They crossed the border into the U.S. with a second JV, Truss CBD USA, in April 2020.
Truss CBD USA rolled out its first product in January 2021 — Veryvell, a line of sparkling waters infused with 20 milligrams of CBD available in three flavors with three intended states after consumption (Grapefruit Tarragon — focus; Strawberry Hibiscus — mind & body; Blueberry Lavender — unwind). In addition to ready-to-drink cans, Veryvell also offers Beverage Drops, bottles of unflavored CBD with the same intended mood states as the canned offerings. Veryvell products are only available in Colorado, both at retail and through direct-to-consumer e-commerce.
“Part of the investment here is to be able to fully support Truss and their expansion plans,” Bowman said.
During a conference call to discuss HEXO’s third-quarter earnings on June 14, St-Louis told investors the company “expect[s] to expand Truss USA to multi-state very soon.”
In addition to the Truss CBD USA partnership with Molson Coors, HEXO plans to expand partnerships with CPG companies as one-third of its three-pronged U.S. strategy, St-Louis said during the call. These partnerships could include collaborating on CBD-infused products with food, pet care and cosmetic companies.
“The third prong is about to bring everything that we do really well in Canada in cannabis 2.0 to the U.S.,” he said.
The new facility, a former warehouse, marks HEXO’s first physical presence in the U.S. and will serve as an extraction, processing production facility. However, no cannabis will be grown on site, Bowman said.
HEXO’s new 50,000 sq. ft. facility in Colorado is “zoned for production of a full range of cannabis products and offers a variety of operational capabilities,” according to the release.
“It’s one of the areas where state and local officials want to expand the industry; they want to bring in high technology and biotech, which we can bring to the area,” Bowman said. “It’s a fantastic site — you cannot have a better site for what we’re trying to do here with the cannabinoid extraction.”
For now, the facility will focus on CBD, rather than THC, said Bowman, who joined the company in February.
“Our first round of this is going to be on the non-THC side for CBD and a couple other minor cannabinoids,” Bowman said. “But we’re well positioned to be able to service the complete cannabinoid range.”
Recreational use of cannabis was legalized in Colorado in 2012.