Supreme Cannabis Company Sets Another Revenue Record

In this market news, The Supreme Cannabis Company, Inc. (TSXV:FIRE), one of the Canadian marijuana stocks, said its Q1 revenue surged 230% year over year

SmallCapPower | November 27, 2018: The Supreme Cannabis Company, Inc. (TSXV:FIRE), one of the Canadian cannabis stocks, announced its first-quarter fiscal 2019 results recently, which showed revenues hitting a record for the fifth consecutive quarter. For the quarter ending September 30, 2018, revenues jumped 230% YoY and 45% QoQ to $5.14 million, driven by the addition of retail partners, increased capacity and a 33% YoY increase in the average price of premium cannabis flower. Production costs for the quarter were $2.9 million, resulting in a gross profit of $2.3 million. Adjusting for changes in fair value of biological assets, gross profit was $3.5 million compared to $1.8 million in the prior-year quarter.

For Our Complete Coverage Of Canadian Marijuana Stocks Click Here     

Operating expenses totaled $5.9 million, driven primarily by a sharp jump in wages to $1.87 million from $0.7 million in prior-year quarter. Consequently, its operating loss was $2.4 million for the quarter. Net loss for the quarter came in at $5.3 million, adjusting net other expenses of $2.9 million that includes a $3.5 million loss for disposal of property, plant and equipment.

Win Big With Our Small Cap Picks

 

Operating highlights during the quarter included the signing of a guaranteed cannabis supply agreement with Tilray Inc. (NASDAQ:TLRY), six provincial agreements, as well as upgrading to the OTCQX® Best Market in the U.S.

Supreme Cannabis Company CEO Navdeep Dhaliwal said, “Supreme Cannabis’ results in the first quarter mark a solid beginning to a historic year in a competitive, dynamic and rapidly-evolving marketplace. Q1 2019 results are continued validation for the successful execution of our strategy for our 7ACRES business to establish a competitive advantage in quality driven regulated cultivation at scale.  We’ve established valuable intellectual property and laid a strong foundation for 2019 by amassing coast-to-coast distribution for what we believe is the only premium High-End Cannabis™ grown at scale in the country. Moving forward, 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.”

Subsequent to the first quarter, Supreme Cannabis raised $100 million and made the first shipments of 7ACRES branded High-End Cannabis to six of Canada’s provincially-regulated, adult-use channels. In July and September, its subsidiary 7ACRES obtained Health Canada approval for an additional 30,000 sq.ft. and 20,000 sq.ft. of additional flowering rooms, respectively, increasing the total flowering room capacity at 7ACRES to 80,000 sq.ft. for an annual production potential of 13,330 kilograms. The increased capacity coupled with new sales to adult-use markets, could significantly drive the Company’s revenues in the coming quarters.

Supreme Cannabis operates through its ACMPR-licensed subsidiary and flagship brand 7ACRES, which has a 342,000-square-foot facility in Kincardine, Ontario. Supreme Cannabis Company stock currently trades at a market cap of $433 million with a price-to-book multiple of 2.81x.

Disclosure: Neither the author nor his family own shares in the company mentioned above.

To read our full disclosure, please click on the button below: