RE:Not about size - it's about efficiencyAgreed Trans, can't say this is good news for WEED but they can weather this....this is good news for FIRE, or it definately should be, and the SP should be heading north at tomorrow's open, that is if any of the analysts know/ understand what is going on.
Moore and team will not be far off original guidance, within reason, and as they start generating north of $40mil a quarter, maybe even this quarter, and they are closer to double that by the last half of FY2021 with the full FIREmenu shelved across the country.
FIRE has been on the right path from the jump, not without some issues along the way but nothing compared to the rest in the sector. The the adjustment on direction in Dec will allow for sustainable growth for some time, enough time to tweek where needed along the road ahead and the experience will allow for any other changes required to allow for moving forward successfully.
Being cashed up here until they are generating profit will not only be a first in the industry but more importantly supply any funding and/ or the leverage they need to fund whatever they need going forward...if the existing operation is not big enough and they need to expand they can start another cookie-cutter 7acres where needed....maybe south of the 49th? You mention the California market, we need to see that ultra premium facility under crop as soon as practical, need to be in on the ground floor there as well.
Much obliged for the info Trans, and you sound positive, JMHO....Opt
theTransporter wrote: Looking at the news Canopy put out tonight shutting down over 1M square feet of greenhouse space in order to "right-size" for the real supply/demand in this market, it confirms that the race to get the largest number of square feet was a losing one. I remember a couple of years ago where the bigger the facility a company announced, the higher their stock price went.
Supreme, although having a respectable size greenhouse, wasn't the largest, but at this point I believe it's just the perfect size they need for this market. They didn't have to invest billions and write down billions like some of these big behemouth companies are doing. Despite the setback in recent quarters due to adjustment in startegy from B2B to CPG, Supreme is of a size that can navigate through these murky waters more nimble than the big guys. With the compartmentalization of the greenhouse in 10,000sq.ft isolated and independant rooms, they can granualy scale the production on current demand in a cost effective manner.
I believe in the end of the day it will be the smaller companies that will prevail. Supreme delivers quality product that the consumer demands, has already taken "right sizing" measures to control costs, and has demonstrated adjustments in price to ensure they move product. They will be offering products at the right category mix proven in California focusing on dry flower, vapes, convenience products (pre-rolls) and shatter/resin. Edibles and especially beverages make up only a small market segment yet require significant tooling and investment. Look at how much Canopy spent on their beverage production lines only to have issues with the aluminum cans absorbing the THC out of the fluid, for a product category that makes up 2% of the entire market demand.
The next few quarters are very critical for Supreme to demonstrate that it has made the right adjustments in strategy and being executed properly by an expereinced CEO (Colin Moore) and demostrate growth QoQ going forward.
They don't have to sell as much volume of product as the big boys out there, but sell out the max they can produce out of their cultivation capacity in the various product mixes, and be profitable at it. That's what will win going forward.