The Supreme Cannabis Company, Inc. (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 (see 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,” said Navdeep Dhaliwal, CEO of Supreme Cannabis. “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, 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.
1The 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.
2Truverra and Supreme Heights transactions are subject to customary closing conditions.
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). Follow us on Instagram, Twitter, Facebook and YouTube.
We simply grow better.
Certain statements made in this press release may constitute forward-looking information under applicable securities laws. These statements may relate to anticipated events or results and include, but are not limited to, to report net revenue for the quarter and year end and positive Adjusted EBITDA for fourth quarter 2019, our ability to create shareholder value and other statements that are not historical facts. Particularly, information regarding our expectations of future results, targets, performance achievements, prospects or opportunities is forward-looking information. Often, but not always, forward-looking statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “believe”, “estimate”, “plan”, “could”, “should”, “would”, “outlook”, “forecast”, “anticipate”, “foresee”, “continue” or the negative of these terms or variations of them or similar terminology.
Implicit in forward-looking statements in respect of the Company’s expectations for fiscal 2020 to deliver $150 million to $180 million in revenue and positive Adjusted EBITDA, 7ACRES’ to complete its transition from a wholesale business to premium consumer brand by third quarter fiscal 2020; pursuing debt financing with tier-one banks and other lenders; and being fully funded to execute on all planned initiatives, are certain current assumptions, including, among others, the increase in product volume available for sale while sustaining current selling prices, the transition of all cannabis products to recreational sales channels, the introduction of new products, and cash production costs and operating expenses increasing at a lower rate than revenues due to the realization of efficiencies throughout the Company as resulted of scaled operations. Assumptions also include that the Company maintains its Health Canada licenses in good standing and obtains new licenses as necessary.
In addition, this press release makes reference to certain non-IFRS measures, including certain industry metrics. These metrics and measures are not recognized measures under IFRS, do not have meanings prescribed under IFRS and are as a result unlikely to be comparable to similar measures presented by other companies. These measures are provided as information complimentary to those IFRS measures by providing a further understanding of our operating results from the perspective of management. As such, these measures should not be considered in isolation or in lieu of review of Company’s financial information reported under IFRS. This press release uses non-IFRS measures including “EBITDA”, “Adjusted EBITDA”, commonly used operating measures in the industry but may be calculated differently compared to other companies in the industry. These non-IFRS measures, including the industry measures, are used to provide investors with supplementary measures of our operating performance that may not otherwise be apparent when relying solely on IFRS metrics. Definitions of the non-IFRS measures can be found in the Company’s Management’s Discussion and Analysis for the fiscal year ended June 30, 2019.
Forward-looking statements are current as of the date they are made and are based on applicable estimates and assumptions made by us at the relevant time in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate and reasonable in the circumstances. However, we do not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws in Canada. There can be no assurance that such estimates and assumptions will prove to be correct.
Many factors could cause our actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the factors discussed in the “Risk Factors” section of the Company’s Annual Information Form dated October 2, 2018 (“AIF”). A copy of the AIF and the Company’s other publicly filed documents can be accessed under the Company’s profile on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com. The Company cautions that the list of risk factors and uncertainties described in the AIF is not exhaustive and other factors could also adversely affect its results. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such information.
View original content to download multimedia:http://www.prnewswire.com/news-releases/supreme-cannabis-provides-guidance-for-positive-fourth-quarter-2019-and-fiscal-2020-300900455.html
SOURCE The Supreme Cannabis Company, Inc.
News by QuoteMedia