One stock that has recently been moving sharply to the upside after a relatively lengthy sojourn in the depths of correction in what now passes for the “cannabis revolution” is Supreme Cannabis Company Inc (OTCMKTS:SPRWF). The stock has been ripping, up nearly 40% in the past 7 days. Helping to drive the action, the company just announced its expected revenue for the fiscal fourth quarter ended June 30, 2019, and provided guidance for fiscal 2020.
According to the release, “Supreme Cannabis’ expects to release the Company’s audited fourth quarter and annual results on September 17, 2019. The Company anticipates that revenue from the fourth quarter will be approximately $19 million net of excise tax. Based on preliminary results, fourth-quarter 2019 revenue is expected to mark an increase of approximately 449% over Q4 2018 revenue ($3.55 million) and is expected to be an approximately 97% increase over Q3 2019 revenue ($9.9 million), thereby expecting to nearly double revenue quarter over quarter (see graph). Supreme Cannabis expects continued revenue growth throughout 2020 as 7ACRES scales production, new and higher-margin products are introduced, and additional brands begin generating material revenue. As a capital-efficient operator, Supreme Cannabis also anticipates reporting positive Adjusted EBITDA1 on a consolidated basis for the fourth quarter 2019.”
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 its expected revenue for the fiscal fourth quarter ended June 30, 2019 and provided guidance for fiscal 2020.
Traders will note 22% tacked on to share pricing for the stock in the past month. Furthermore, the stock has witnessed a pop in interest, as transaction volume levels have recently pushed topping 110% over the long run average.
“Our Company has taken deliberate steps to grow in a focused, responsible and compliant manner, building a strong core business and an authentic brand and then expanding into new lines of business and international markets,” said Navdeep Dhaliwal, CEO of Supreme Cannabis. “In a sector dominated by headlines, our measured approach to capital deployment and brand-building sets us apart. We believe our preliminary results demonstrate the strength of our business during an inflection point within the industry, path towards profitability and continued disciplined growth. Looking forward, we remain focused on building our portfolio of premium consumer experience driven brands.”
Currently trading at a market capitalization of $376M, SPRWF has a significant war chest ($75M) of cash on the books, which stands against about $24.3M in total current liabilities. SPRWF is pulling in trailing 12-month revenues of $26.4M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 381.9%. This may be a very interesting story and we will look forward to updating it again soon. 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.