December 03, 2018 Supreme Cannabis (FIRE.V) announced that its 100% owned subsidiary, 7ACRES was recognized as the Brand of the Year at the 2018 Canadian Cannabis Awards.
Before we toss confetti to the wind– let’s remember: even the most prestigious award ceremonies are prone to error.
Case in point: at the 2005 Oscars – Crash was deemed a better movie than Capote.
Loosely speaking, awards can be divided into two categories: 1. Nominees receive free gala tickets (established) 2. Nominees pay for their own gala tickets (fledgling).
The Canadian Cannabis Awards has many categories and many nominees – typically a strategy to boost gala ticket sales.
Top Twitter Cannabis Influencers anyone?
That said – branding is the most prestigious award.
Why?
Because people with dirt under their fingernails typically reap modest economic rewards. The original wave of licensed marijuana growers is morphing into cannabis retailers and branders.
It’s not a simple trick.
Corporate beverage companies that gobbled up craft breweries have discovered how difficult it is to create a loyal customer base.
Craft beer drinkers – like cannabis consumers – crave new experiences: Milk Stout; White Chocolate Moo-hoo; Monday Night Slap Fight; Mama’s Little Yelper etc. One of the ways to win over craft beer drinkers is with ultra premium-quality branded products.
7ACRES was selected by a panel of industry professionals across a variety of sectors in the cannabis space. The award recognizes the enormous effort behind creating a brand, strategy, culture, image, and impact that resonates in the public consciousness.
“The Team at 7ACRES works incredibly hard and are very proud of the products and the culture we have cultivated since day one,” said John Fowler, President & Founder of Supreme Cannabis.
7ACRES’ 340,000-square foot hybrid greenhouse is situated in Kincardine, Ontario. It combines the best practices in indoor cannabis cultivation with the power of the sun.
The result is indoor-quality buds with sun-grown characteristics.
Supreme has recently signed deals with the Province of Ontario and British Columbia
According to Financial Management Discussion & Analysis (MD&A), “Supreme is focused on developing and maintaining 7ACRES’ position as a leading brand of premium cannabis flowers at scale.
Sales of cannabis are completed via Business-to-Business (B2B) transactions.”
The B2B model is designed to allow 7ACRES to grow its revenue through high value bulk sales while maintaining its focus on cultivation, without the expense of patient acquisition and retention or retail order fulfillment and logistics.
On November 14, 2018 Supreme released its financial and operating results for the three months ended September 30, 2018.
Q1 2019 Financial and Operating Highlights
- Revenue of $5.14 million
- 229% revenue increase from Q1 2018
- 45% revenue increase from the previous quarter
- Supply agreements with other Licensed Producers, including $14 million supply agreements with Tilray (NASDAQ: TLRY)
- Adult-use cannabis to consumers in six Canadian provinces.
- Added 50,000 square feet of licensed flowering room capacity
Supreme booked a Q1 2019 net loss of $5.39 million, compared to a net loss of $2.18 million in Q1 2018.
Net loses always evoke a wince – but remember – Amazon (AMZN.NASDAQ) was founded in 1994, but didn’t turn a profit until 2001.
FIRE is still teething.
Weed sector comparison: MedMen (MMEN.C) booked a Q1, 2019 net loss of $66.5 million (12 X larger than Supreme’s). MedMen has a market cap of $317 million, compared to Supreme’s market cap of $282.
“Our branding and distribution for 7ACRES will accelerate, as we’re confident that consumers will further fuel our growth as they recognize the standard 7ACRES has set in the market for premium dried flower,” stated said Navdeep Dhaliwal, CEO of Supreme Cannabis.
“I anticipate that marketing investment will grow exponentially as companies work to carve out a leading position and capture value in an emerging market,” Tim Calkins, Clinical Professor of Marketing at Kellogg, told Forbes Magazine.
“It isn’t often that you see an entirely new market emerge on the scene. Cannabis will become a market dominated by strong, vibrant brands.”
The 2018 Canadian Cannabis Awards “Best Brand” honour goes to Supreme’s 7ACRES.
We plan to buy tickets for the 2019 gala.
For investors, branding is the category to keep your eye on.
Full Disclosure: Supreme Cannabis is an Equity Guru marketing client, and we own the stock.