In the US alone, ArcView Market Research and BDS Analytics project cannabis users will spend US$2.9 billion on concentrates in 2018.
MediPharm Labs, a subsidiary of MediPharm Labs Corp. (LABS.V), will be contributing their processing license to the effort.
The company is an industry leader which is entirely focused on cannabis extraction and the production of pharmaceutical-grade extracts. The company also received its sales license from Health Canada yesterday.
The partnership will not incur any capital costs to Supreme Cananbis, while its partner will be paid through a processing fee relative to the amount of cannabis oil produced.
We expected market segmentation as the Canadian cannabis industry evolved and the emergence of dedicated experts focused on downstream activities. Partnering with product experts, such as MediPharm, allows Supreme Cannabis to launch oil products quickly.
-Navdeep Dhaliwal, CEO of Supreme Cannabis
Through its subsidiary, 7ACRES, Supreme has agreed to supply the material necessary to produce the concentrated cannabis oil.
7ACRES will supply a minimum of 1,000 kilograms of high-quality cannabis trim per year for the extraction and production of, at minimum, 200,000 40-mililitre units of high-terpene cannabis oil extracts.
These products will be expressly targeted towards the adult-use recreational markets.
Additionally, all of the concentrated produced as a result of the partnership between Supreme and MediPharm Labs will be sold through Supreme’s network of branded products, including one brand which has yet to be announced.
Supreme Cannabis’ 7ACRES brand, named after its subsidiary, is the company’s flagship and a producer of premium cannabis product.
Supreme to acquire communications firm
In its second piece of news today, Supreme has announced its intent to acquire Bayfield Strategy, a communications and stakeholder relations firm.
Supreme first solicited the services of Bayfield in September 2017. The company was hired to better engage with shareholders and stakeholders alike.
Bayfield’s CEO, Riyaz Lalani, will assume the position of COO within Supreme Cannabis once the acquisition is complete.
I believe it speaks volumes that in Bayfield’s best year ever, our team believed so strongly in Supreme Cannabis’ mission and growth prospects that we jumped on the opportunity to join their team full-time.
As a communications and stakeholder relations firm, Bayfield will be providing its expertise in government relations, financial reporting and advising in mergers and acquisitions.
The firm’s clients include Abercrombie & Fitch (ANF.Z), Jamba Juice (JMBA.Q) and Benchmark Electronics (BHE.Z).
Lalani brings a wealth of experience to Supreme, having advised public companies and hedge funds across North America over the last two decades.
Before founding Bayfield Strategy, Lalani was the COO of a leading shareholder services firm in Canada. Before that, he was an international asset manager in New York and Toronto.
We believe Bayfield’s unique offering of investor relations, public relations and government relations is an ideal combination for a public company in the highly regulated nascent cannabis industry in Canada.
-John Fowler, CEO of Supreme.
Branding is an important aspect of the cannabis industry which has been much discussed in these pages.
In a crowded cannabis market, LPs need to do everything they can to reach the consumer.
While brands are crucial, but having an experienced communications firm like Bayfield on-side which can craft a message consumer connect with is a significant upside which can’t be overlooked.
With this acquisition, Supreme has taken an enormous step to creating its brand, one which won’t be found on any shelf but, rather, in the mind.
There’s something to be said about that.
Full disclosure: Supreme Cannabis is an Equity Guru marketing client.Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.