In Rock & Roll, the 3-chord song (tonic, subdominant, and dominant) – sometimes called the “I, IV and V” – is considered the most elegant structure.
If Supreme Cannabis was a Rock & Roll song, here are its 3 chords:
l – grow premium weed
lV – brand premium weed
V– sell premium weed
On March 21, 2019 Supreme Cannabis (FIRE.T) announced that its 100%-owned subsidiary 7ACRES has obtained Health Canada approval for 6 additional flowering rooms totaling 60,000 sq ft of additional production space at its facility in Kincardine, Ontario.
“Today’s announcement is a major milestone, representing a 50% increase in our estimated annual production capacity”, stated John Fowler, President and Founder of Supreme Cannabis.
7ACRES’ hybrid greenhouse combines the best practices in indoor cannabis cultivation with the power of the sun. The result is indoor-quality buds with sun-grown characteristics.
Using a full-spectrum sun HVAC & C02 enrichment system, rather than the limited-spectrum lamps, has helped fuel FIRE’s reputation for growing the best weed on the planet.
The B2B model allows 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.
In the March 20, 2019 Midas Letter interview below, Supreme Cannabis CEO, Navdeep Dhaliwal talks about the company’s international operations and its performance in the Canadian rec market.
Dhaliwal notes that Supreme Cannabis’ run-rate is 8th in the country, despite FIRE’s relative youth.
Having a singularly-focused business model creates one vulnerability.
If you mess up your big project, there’s no where to hide.
You can’t divert investor’s attention away from a bungled endeavor towards a promising one.
Supreme’s future hinges on its ability to establish 7ACRES as a dominant brand for premium cannabis.
Early signs suggest that Supreme is achieving that objective.
Q2 2019 Financial and Operational Highlights
- Revenue of $7.72 million, a 359% increase from Q2 2018 ($1.68 million) and a 50% increase from Q1 2019 ($5.14 million).
- Strengthened balance sheet by raising $100 million through a bought deal offering of 6% unsecured convertible debentures due 2021
- Made its first shipments of 7ACRES branded Cannabis to six of Canada’s provincially regulated adult-use channels.
- Contracted Medipharm Labs to facilitate the launch of cannabis oil products line.
- Partnered with Khalifa Kush Enterprises to launch premium cannabis products for the Canadian and international markets excluding the U.S.
- Net comprehensive loss of $1.55 million, compared to a net loss of $2.03 million in Q2 2018 and a net loss of $5.39 million in Q1 2019.
Total flowering room space at 7ACRES will increase from 120,000 sq ft to 180,000 sq ft and 7ACRES’ annual production capacity estimate increases from approximately 17,500kg to 26,250kg.
Supreme Cannabis expects that with further production efficiencies following the licensing of all 25 flowering rooms, 7ACRES’ capacity could reach about 50,000kg per year by mid-2019.
On December 6, 2018 FIRE and Khalifa Kush Enterprises Canada (KKE) – an affiliate of Khalifa Kush Enterprises – agreed to develop and launch a lineup of premium cannabis products – under a consulting services agreement.
Wiz Khalifa’s (born Cameron Jibril Thomaz) debut single for Atlantic, “Black and Yellow” peaked at number one on the Billboard Hot 100.
“Khalifa Kush kept me up during the day with its cerebral uplifting buzz but at night its mellow relaxation eased me into a peaceful nights sleep,” stated internet reviewer Kush King.
“Great for pain and anxiety! Blasted me right out of a funk I was in,” stated Lesbiangirl.
“Does Wiz own the rights to this strain?” asked Yubby D, “It is the most popular strain at our dispensary!!!”
“Wiz is a globally-recognized cannabis taste maker and connoisseur,” confirmed Fowler, “KKE has established a brand that is synonymous with ultra-premium quality, based on world-leading genetics.”
A couple of months ago, Equity Guru’s Chris Parry hopped on a plane and toured Supreme’s grow facility.
“I had to go see this facility,” confessed Parry, “Had to walk through it, touch it, and look into every corner.”
Saskatchewan and New Brunswick recently became 7ACRES’ seventh and eighth provincial partners alongside British Columbia, Alberta, Manitoba, Ontario, Nova Scotia and PEI.
“With 18 of 25 flowering rooms at 7ACRES now approved by Health Canada, production space at our facility is near the finish line,” stated Fowler, “With our multi-award winning 7ACRES brand now available in 8 out of 10 provinces, cannabis enthusiasts coast-to-coast will be able to enjoy what we believe to be the highest-quality cannabis grown at scale in the country.”
Full Disclosure: Supreme Cannabis is an Equity Guru marketing client, and we own the stock.