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Tuesday, November 24, 2020

The Expansion Continues for Supreme Cannabis Company Inc (OTCMKTS:SPRWF)

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As we noted over the weekend, Supreme Cannabis Company Inc (OTCMKTS:SPRWF) is positioned as a strong candidate to start to reassuming a more salient role in the Canadian cannabis patch. This is a player with smaller numbers but growing potential, and the key will be all about how well it can harness acceleration on the topline. The company just took a step in that direction when it announced that its wholly owned subsidiary, 7ACRES, entered into supply agreements with the Nova Scotia Liquor Corporation and the PEI Cannabis Management Corporation to supply recreational cannabis to their respective retail stores beginning October 17, 2018.

According to the release, “Nova Scotia and PEI become Supreme Cannabis’ fifth and sixth provincial recreational partners alongside Ontario, British Columbia, Alberta and Manitoba. Supreme Cannabis joins a select group of leading cannabis companies that have secured supply agreements with five or more provinces to-date, including: Canopy Growth (NYSE:CGC), Aphria (TSX:APH), Aurora (TSX:ACB), Tilray (NASDAQ:TLRY), and Organigram (TSXV:OGI).”

Supreme Cannabis Company Inc (OTCMKTS: SPRWF) trumpets itself as a Canadian publicly traded company committed to providing premium brands and products that proudly reflect its consumers, people, and uniquely innovative culture. The Company’s portfolio includes its wholly-owned subsidiary and flagship brand 7ACRES.

7ACRES is a federally licensed producer of medical cannabis operating inside a 342,000-square-foot facility in Kincardine, Ontario. 7ACRES is dedicated to providing consumers with a premium-quality product that recognizes its customers are informed, discerning and value a brand and culture that aligns with their principles. 7ACRES brand success has been reflected in provincial supply agreements, where 7ACRES’ product is consistently listed in the highest brand category available to recreational consumers.

The Company’s growing portfolio also includes an equity investment and long-term global distribution partnership with Lesotho-based Medigrow for the exporting of medical-grade cannabis oil.

The Supreme Cannabis Company has consistently set the standard for innovation in the sector, including the design of growing facilities and development of operational excellence metrics. We are confident that together with our flagship brand, proprietary technology and products, truly unique culture, and industry-leading team, we will deliver our shareholders consistent long-term value creation.

According to company materials, the company focuses on the production and sale of medical marijuana in Canada. The company was formerly known as Supreme Resources Ltd. and changed its name to Supreme Pharmaceuticals Inc. in February 2014. Supreme Pharmaceuticals Inc. was incorporated in 1979 and is headquartered in Vancouver, Canada.

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As noted above, SPRWF shares have started to come to life a bit as the company marks out some increased distribution agreements. In all, we’ve witnessed 25% piled on for shareholders of the company during the trailing month, but this action is running counter to the larger trend in the name. What’s more, the company has seen a growing influx of trading interest, with the stock’s recent average trading volume running just shy of 290% above the average volume levels in play in this stock over the longer term.

“We are excited to finalize these agreements with the provinces of Nova Scotia and Prince Edward Island,” said John Fowler, CEO of Supreme Cannabis. “We expect to be one of Canada’s few producers who will be in stores coast-to-coast when the Canadian recreational market kicks off on October 17th, and the only major producer to be listing exclusively as a premium offering. We’re eager for cannabis enthusiasts in both Nova Scotia and PEI to discover 7ACRES’ offerings and experience what we believe to be the highest-quality cannabis being grown at scale in Canada.”

At this time, carrying a capital value in the market of $359.71M, SPRWF has a significant war chest ($78.5M) of cash on the books, which must be weighed relative to virtually no total current liabilities. SPRWF is pulling in trailing 12-month revenues of $5.3M. In addition, the company is seeing recent top-line growth, with sequential quarterly revenues growing at 23.1%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. Sign-up for continuing coverage on shares of $SPRWF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $SPRWF, either long or short, and we have not been compensated for this article.

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