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Friday, November 27, 2020

The Pullback Could be an Opportunity in Supreme Cannabis Company Inc (OTCMKTS:SPRWF)

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One stock we have been focused on of late is Supreme Cannabis Company Inc (OTCMKTS:SPRWF). The stock was a little late to the recent cannabis stock party but made up for the delay with aggressive momentum to close out last month. Shares have pulled back a little in recent days and we thought it was a good idea to take another look.

Fueling the action, the company just announced that its shares of common stock were approved for trading on the OTCQX Best Market operated by OTC Market Group. According to the release, “The Supreme Cannabis Company stock will begin trading on the OTCQX, effective today, under the ticker symbol “SPRWF.” U.S. investors can find current financial disclosure and Real-Time Level 2 quotes for the company on www.otcmarkets.com.”

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, with shares pulling back a little and the company announcing an uplist in the US, this could be an interesting stock to keep on the radar, especially given its short-list position in the recent Nova Scotia supply lottery. In all, the chart shows 39% during the past month in terms of shareholder gains in the listing, but that move comes in the context of a larger bearish trend.

Moreover, the listing has registered increased average transaction volume recently, with the past month seeing greater than 580% beyond its prior sustained average level.

“We are excited about qualifying for the OTCQX market. Considering the Company’s anticipated growth outlook in the near-term, which includes being on shelves coast-to-coast when the legal recreational cannabis market launches on October 17, 2018, moving up to OTCQX is an appropriate next step in the Company’s growth plan,” said John Fowler, Chief Executive Officer of Supreme Cannabis. “Being traded on OTCQX will allow for greater exposure, accessibility, and liquidity for the investment community as we continue to execute on our strategy of building a global cannabis company.”

Now commanding a market cap of $397.33M, SPRWF has a significant war chest ($78.5M) of cash on the books, which compares with about $12.8M in total current liabilities. One should also note that debt has been growing over recent quarters. 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%. As more color becomes clear on the name, we will review the situation and update our take. 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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