TORONTO, August 13, 2019 – The Supreme Cannabis Company, Inc. ("Supreme Cannabis" or the "Company") (TSX: FIRE) (OTCQX: SPRWF) (FRA: 53S1) today announced its expected revenue for the fiscal fourth quarter ended June 30, 2019 and provided guidance for fiscal 2020. Supreme Cannabis' expects to release the Company's audited fourth quarter and annual results on September 17, 2019.
The Company anticipates that revenue from the fourth quarter will be approximately $19 million net of excise tax. Based on preliminary results, fourth-quarter 2019 revenue is expected to mark an increase of approximately 449% over Q4 2018 revenue ($3.55 million) and is expected to be an approximately 97% increase over Q3 2019 revenue ($9.9 million), thereby expecting to nearly double revenue quarter over quarter (graph). Supreme Cannabis expects continued revenue growth throughout 2020 as 7ACRES scales production, new and higher-margin products are introduced, and additional brands begin generating material revenue. As a capital-efficient operator, Supreme Cannabis also anticipates reporting positive Adjusted EBITDA1 on a consolidated basis for fourth quarter 2019.
Our Company has taken deliberate steps to grow in a focused, responsible and compliant manner, building a strong core business and an authentic brand and then expanding into new lines of business and international markets.Navdeep Dhaliwal, CEO of Supreme Cannabis.
Dhaliwal went on to say that "in a sector dominated by headlines, our measured approach to capital deployment and brand-building sets us apart. We believe our preliminary results demonstrate the strength of our business during an inflection point within the industry, the path towards profitability and continued disciplined growth. Looking forward, we remain focused on building our portfolio of premium consumer experience driven brands."
Brands, Partnerships and Operations
Over the last year, Supreme Cannabis has built a focused portfolio of brands and operating assets to serve diverse consumer experiences and emerging product categories.
- 7ACRES: Growing premium cannabis at scale from a 440,000 square foot indoor hybrid facility.
- Blissco: Established premium wellness brand expected to produce over 7,000,000 tincture bottles annually by December 2019 and focus on Global CBD markets.
- PAX: Partnership to launch premium 7ACRES oil pods for the PAX Era in Canada.
- Truverra2: International evidence based medical brand with Health Canada-licensed facility for research and development.
- KKE: Ultra-premium lineup of cannabis products for the Canadian and international cannabis enthusiasts, developed in partnership with Wiz Khalifa and Khalifa Kush Enterprises Canada.
- Medigrow: Producing full spectrum CBD and medical cannabis oil products for international markets from a low-cost jurisdiction in Southern Africa.
- Supreme Heights2: Investment platform focused on early stage brands in the UK and European CBD health and wellness market.
- Cambium Plant Sciences: Research and development facility focused on developing the next generation of premium cannabis genetics and proprietary cultivation processes.
Supreme Cannabis believes that the Company is well positioned to take significant steps forward in fiscal 2020, including:
- Expected net revenue of between $150 million and $180 million.
- Expected positive Adjusted EBITDA1 on aggregate over the course of the year.
- 7ACRES' to complete its transition from a wholesale business to premium consumer brand by third quarter fiscal 2020, with complete in-house packaging capabilities for all flower products under the 7ACRES' brand.
- Pursuing non-dilutive financing with tier-one banks and other lenders to provide financial flexibility for future growth initiatives.
- Fully funded to execute on all planned initiatives.
In addition to the above outlook, the Company has determined not to exercise its option to pursue a consolidation of its issued and outstanding Common Shares.
See "Forward-Looking Information" below for assumptions and risks.
Fourth Quarter Earnings Release
The Company will release its audited financial results for the fourth quarter and fiscal year ended June 30, 2019 after financial markets close on September 17, 2019.
The preliminary estimated financial results and other data for the three months and year ended June 30, 2019 set forth above are subject to the completion of the Company's financial closing procedures. This data has been prepared by, and is the responsibility of, the Company's management and audit committee. Supreme Cannabis' independent registered public accounting firm, MNP LLP, is in the process of performing year-end audit procedures with respect to the accompanying preliminary financial results and other data, and accordingly does not express an opinion or any other form of assurance with respect thereto. The Company currently expects that its final results of operations and other data will be consistent with the estimates set forth above, but such estimates are preliminary and Supreme Cannabis' actual results of operations and other data could differ materially from these estimates due to the completion of its fiscal year-end audit procedures, final adjustments, and other developments that may arise between now and the time such annual audited consolidated financial statements for the twelve months ended June 30, 2019 are released.
1 The Company defines Adjusted EBITDA as net income (loss) excluding interest income (expense), accretion, income taxes, depreciation, amortization, fair value changes on growth of biological assets, realized fair value changes on inventory sold or impaired, share-based payments, changes in fair value of financial instruments, gains and losses on disposal of assets, and impairment of goodwill and intangible assets. A reconciliation of Adjusted EBITDA to Net Income (Loss) will be provided in the Company's Management's Discussion and Analysis for the year ended June 30, 2019.
2 Truverra and Supreme Heights transaction is subject to customary closing conditions.
Disclaimer: Past performance is not an indicator of future performance.
Disclaimer: past performance is not an indicator of future performance.
About Supreme Cannabis
The Supreme Cannabis Company, Inc., is a global diversified portfolio of distinct cannabis companies, products and brands. Since 2014, the Company has emerged as one of the world's fastest-growing, premium plant driven-lifestyle companies by effectively deploying capital, with an emphasis on disciplined growth and high-quality products.
Supreme Cannabis' portfolio includes 7ACRES, its wholly-owned subsidiary and multi-award-winning brand; Blissco Cannabis Corp., a wellness cannabis brand and a multi-licensed processor and distributor based in British Columbia; Cambium Plant Sciences, a plant genetics and cultivation IP company; Medigrow Lesotho, an cannabis oil producer located in southern Africa; Supreme Heights, an investment platform focused on CBD brands in the UK and Europe and a brand partnership and licensing deal with Khalifa Kush Enterprises Canada.
Supreme trades as FIRE on the Toronto Stock Exchange (TSX: FIRE), SPRWF on the OTC Exchange in the United States (OTCQX: SPRWF) and 53S1 on the Frankfurt Stock Exchange (FRA: 53S1)
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