This May be the Time to Take a Strong Look at Supreme...

This May be the Time to Take a Strong Look at Supreme Cannabis Company Inc (OTCMKTS:SPRWF)



If you’re scanning through charts in the cannabis space to figure out some options as the sector pulls back, Supreme Cannabis Company Inc (OTCMKTS:SPRWF) may be an interesting stock to check out. This is one of the 6 biggest producers in Canada and a company sporting over 70% revenue growth on a y/y quarterly basis. Technically, shares remain in the structure of a long-term upward trend but have gone net sideways over the past 20 months. That level of consolidation from a point of strength in a growing market space can often precede strong performance.

To further flesh out the picture, the company just announced that 7ACRES branded High-End Cannabis is available exclusively through Canada’s provincially regulated adult-use channels. According to the release, “More information about 7ACRES and its products can be found at 7ACRES’ Jean Guy strain is now available online in British Columbia, and the Company expects that Jean Guy will be online in Alberta, Ontario, Nova Scotia and Prince Edward Island next week, and in Manitoba in early November. The balance of 7ACRES’ full product lineup will be available shortly thereafter online and in brick-and-mortar stores.”

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.

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. 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 consistent long-term value creation to our shareholders.”

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As noted above, SPRWF just announced that 7ACRES branded High-End Cannabis is available exclusively through Canada’s provincially regulated adult-use channels.

The chart shows nearly -10% piled on for shareholders of the company during the trailing week, but that move comes in the context of a larger bearish trend. In addition, the name has benefitted from a jump in recent trading volume to the tune of greater than 110% over what the stock has registered over the longer term.

“In 2013 we started our journey to develop 7ACRES into Canada’s leading brand for premium cannabis flower, delivering on consumer expectations for aroma, visual appeal and flavour,” said John Fowler, President of Supreme Cannabis & Founder of 7ACRES.

“We’re now excited to make 7ACRES available to adult cannabis enthusiasts and consumers looking for a superior sensory experience when consuming cannabis. Our mantra at 7ACRES is ‘RESPECT THE PLANT’.  We believe that by respecting the plant, the people who care for it and the people who ultimately consume it, we have built a culture of continual improvement where consumers can expect that each flower experience is better than the last.”

Earning a current market cap value of $339.53M, SPRWF has a significant war chest ($55.9M) of cash on the books, which must be weighed relative to about $22.9M 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 $8.9M. In addition, the company is seeing recent top-line growth, with sequential quarterly revenues growing at 71.3%. 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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