New Cannabis Ventures hosted Supreme Cannabis (TSXV: FIRE) (OTC: SPRWF) CEO Nav Dhaliwal for a webinar conducted on October 22nd. Dhaliwal, who was promoted from President to CEO last month, discussed the company’s accomplishments, strategy and outlook. The slides can be downloaded here.
Supreme has a differentiated business model, focused exclusively on the B2B market, selling branded products under its 7Acres label as well as white-labeled offerings, like the recent $12 million supply agreement with Tilray, where the product is targeting the medical market. Going forward, Dhaliwal said the company’s goal is to focus exclusively on the adult consumer market. Supreme hasn’t invested in a call center and believes the market will become less vertically integrated over time.
The company has defined its targeted consumers as “legal aged cannabis enthusiasts” (LACE), with an average age of 20-30 and roughly equally mixed between males and females. The LACE customer is extremely focused on quality and rejects products that don’t have the right smell, flavor or look. Director of Product Development Pete Shearer recently discussed some of the attributes of the 7Acres product.
Supreme’s products have received strong ratings to date, and the company has brought on several partners to carry its products in the medical market in Canada and has added six provinces for the consumer market. Dhaliwal suggests that the company’s $6-7 per gram realized wholesale pricing, which is about 33% higher than the average wholesale price from other LPs, reflects the premium nature of its offering.
While Supreme is focused on flower, it expects to enter the market for extracts as these new forms are permitted in Canada. It may sell some of its trim to a third-party for production into oils, but Dhaliwal expects the company to manufacture its own extracted products targeting the cannabis enthusiast.
The hybrid greenhouse should be fully operational with a targeted annual output of 50 million grams by early 2019, and Supreme is planning an indoor cultivation facility adjacent to 7Acres.
Finally, Dhaliwal touched upon the company’s international strategy. Supreme has already made an investment in Lesotho for a company, Medigrow, that will be producing oils for the export market, but he sees German exports as an opportunity as well.
Supreme Cannabis is a client of New Cannabis Ventures. Watch and listen to the entire webinar: