The Supreme Cannabis Company Launches New CBD Product as New Senior Executives Join the Team
December 4th, 2019
App, Exclusive, News, Top Story
2019 has been tough sledding for essentially every public company in the cannabis space. It’s not unlike other times over the last decade when high growth stocks, as they’re colloquially called, have followed large gains with sharp retractions. While unpleasant for market bulls, it is a normal and healthy part of a cycle, particularly for those industries that are still developing.
One sign that opportunities still exist in the industry, is the fact that the industry continues attracting top talent across the entire leadership arc. This includes a couple of recent appointments by The Supreme Cannabis Company. First, Joel Toguri assumes the newly created Senior Vice President of Commercial position as new “Cannabis 2.0”, or cannabis derivative products, are introduced and rolled out across Canada. Given Supreme Cannabis’ reach into Cannabis 2.0, Toguri will be integral to revenue growth as he oversees provincial and retail sales strategy across all of Supreme’s brands, particularly its 7ACRES and Blissco lines and a partnership with Khalifa Kush Enterprises (KKE) Canada.
Meanwhile, Supreme has brought on consumer packaged goods (CPG) veteran John Griese as Chief Operating Officer to streamline its supply chain and operations. As the company moves further and more broadly into commercial operations, Griese will help Supreme manage its growth with an eye toward efficiency and, as always, quality.
A Highly Relevant Background
Both the new SVP Commercial and COO bring highly relevant experience to the table. Toguri’s career spans the cannabis, beverage, alcohol and apparel industries, during which he has gained over two decades of regulated industry knowledge and pertinent cannabis distribution expertise. More specifically, he led sales for cannabis giant Aphria (NYSE: APHA) (TSX: APHA) where he managed medical and recreational sales to patients and consumers.
Before embarking into cannabis with Aphria, Toguri spent four years as VP of Sales and Operations at Southern Glazer’s Wine & Spirits of Canada, helping to build the company into a leading alcohol broker in Canada. Prior to that role, he was Director of Operations at Glazer’s and served in leadership positions at Molson Coors (NYSE: TAP) (TSX: TPX.B) and Beam Global Spirits & Wine. Supreme Cannabis will surely benefit from Toguri’s relevant experience and leadership expertise.
The Company’s new COO, John Griese, sports a somewhat similar background, most recently serving as COO for two cannabis-oriented companies (Creso Pharma and Bloom Farms). Prior to that, he held senior-level supply chain positions with Nestle (OTC: NSRGY), Frito-Lay (PepsiCo NASDAQ: PEP), and large private Canadian company Sofina Foods.
Taken together, one can see Supreme’s focus on consumer goods as cannabis moves from the wholesale niche to a much broader retail market. The Company’s decision to hire individuals with experience in the cannabis space also demonstrate that they care to maintain one of the Company’s key differentiators: Supreme Cannabis is often credited as one of the few Cannabis Companies who maintains respect for the plant and who has a true understanding of cannabis and the consumer.
However, these hires demonstrate that a shift is certainly happening in Canada, with last year’s legalization followed by this year’s expansion into Cannabis 2.0. CPG expertise should allow Supreme Cannabis to establish their brand and maximize operations in Canada preparing the company for larger international marketing opportunities that are starting to form across the globe.
Blissco CBD Oils Launch
Since October 17, 2019, Supreme Cannabis has established a highly successful recreational brand. 7ACRES, is Supreme Cannabis’ brand for the quality-oriented cannabis enthusiast. The company has successfully launched its premium flower products for this consumer and is looking for opportunities to broaden its consumer reach, launching brands for different experiences.
In Supreme’s bid to capture its share of the recreational market, Toguri is being tasked to develop and drive sales strategies, business development and retail growth. This includes supporting the launch of new products under Supreme Cannabis’ wellness brand, Blissco. With a focus on the wellness consumer’s experience, Blissco’s high-quality CBD oils were recently launched into the Canadian market. Founded in 2013 and acquired by Supreme earlier this year, Blissco is a respected brand that has a facility with advanced extraction infrastructure to produce over 7 million tincture bottles by New Year’s Day.
The new Blissco CBD oil, Pūr Dew, further diversifies the Supreme product offerings, which include the Blissco brand, dry flower from 7ACRES and high THC cannabis oils from KKE. 7ACRES was distinguished as “Brand of the Year” at the Canadian Cannabis Awards last quarter. Against that backdrop, Toguri will leverage his experience to maintain growth in the 7ACRES brand and distribution across the country, which includes agreements to sell the brand in 8 provinces.
A Bold Target: $150 Million
“As we grow our team, we believe our focused business and industry leading culture will continue to attract exceptional personnel like Mr. Toguri,” commented Supreme Cannabis CEO Navdeep Dhaliwal in a statement on the new VP of Commercial.
During the first quarter of fiscal 2020 ended September 30, 2019, Supreme reported revenue of $11.43 million. That more than doubled the $5.1 million from the year prior quarter, although it was a contraction from $19 million in Q4 fiscal 2019, as the company underwent a transitory period from a wholesale outfit to a consumer packaged goods firm, as well as coped with (a now-rectified) mechanical failure in three 7ACRES grow rooms and, in general, an extremely challenging Canadian market during the quarter.
Management is not discouraged by one sluggish quarter, maintaining its guidance for fiscal 2020 for revenue in the range of $150 million to $180 million and positive adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).
Furthermore, Supreme entered into a credit agreement with Bank of Montreal for $90 million of senior credit facilities consisting of a term loan of $70 million and a revolving credit facility of $20 million. In an environment where “good” money has been very difficult for cannabis companies to come by, the credit facilities speak to the quality of Supreme’s operations and business model as it moves into being a full-fledged CPG company.
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