RE:RE:RE:RE:RE:RE:RE:As always, Supreme gains the LEAST in this rallyAgreed for the most part Dub and it is always good to hear your opinions and ideas, very balanced and grounded...there are no experts here, there are those with opinions/ ideas some pro, some con and of course there are the cupcakes and those that have nothing to offer, pro or con.
I believe, and have from the start, that Supreme is on the right track with quality first and at all times and for the most part they have delivered much of that with the facility design, product produced, quality acquisitions with BlissCo and Truverra, mainly adding their expertise, that they can grow into the areas that like CBD/wellness, oils, vaping etc all to support quite a full range of the cannabis marketplace and without many of the hasstles/ problems of developing/ growing in these areas organically.
On the other hand I feel they have dropped the ball on giving the control of their finished product and QC to others by not packaging and supplying retailers with the product for sale...I will be very interested to see what is in the containers packaged in-house, I have had a couple that looked very thin on quantity? That aside any comapny, producing pretty well any good or service, can not lose control of the final product, what the consumer gets/ sees when they pop open that tub, it is not good business....I was really weighing things out when the vault wasn't full and the grow area completely under crop on legal rec day, to name a few near game changers for me.
The weakness in the rest of the LPs, especially the lack of quality product across the sector...it was clear to me that Supreme would close that gap when they got their product to the shelf, not that they would compete on volume but they could sell everything they produced as long as they got it to the shelf because they have little to no competition. More importantly they were good with their cash, much better than most, and when they shelved the RS plan, which would have been exercised through weakness, and changed course the get revenues to pay their way, add the guidance and packaging in-house it was like a rebirth.
The realization in the sector that quality cannabis is job one and excessive debt will kill you and that if they do not adjust and comply ASAP they will not survive, let alone realize a profit...Supreme should see profit within the next 2quarters and they will be just nicely on their way to full production, the rest of the sector will be lucky if they can figure out how to correct their problems let alone how to grow quality herb at scale?
But this is all contingent on the execution and achievment of the guidance targets and that they maintain that trajectory of growth to full production in CY2020 and expand on their quality menu along the way of which needs to include the ultra premium as soon as practicable and not years down the road, we need to be in on the ground floor with the Rolls Royce of the cananbis world.
I believe that they definately can and will meet guidance expectations or very close at the least, Dhaliwal/ team appear to be well positioned and driven to this end and we will know how successful by the end of June or before. I still expect to realize those handsome rewards for those that own and believe that everyone needs to to their own DD at all times and draw their own conclusions, this is JMHO....Op
DubbyTGF wrote: Thanks for the reponses Opt and BK,
I agree a lot with what you've had to say (BK). I don't necessarily see the negatives as you do, because I haven't been along for the journey of underperformance as you've put it. My research into this industry only started about a month or two ago, and even then there are only a couple that have popped onto my radar. To me, Supreme looks good, and their roadmap is solid, but it comes down to execution. I'm not near as confident as Opt or others about the near guarantee that all will go swimmingly.
"I would (and am) more comfortable diverting funds to the likes of APHA or a a solid extractor."
I'm happy that you said that, because I agree entirely, and everybody should stick to their strategy when diversifying and hedging risk in the sector. I actually edited APHA out of my post when I compared FIRE to other [undervalued] equities in the sector, to remain more neutral. Other than those two, I keep a float between two extractors (MediPharm, Organigram).
That said, averaging down isn't only a reactionary tool. I'm not sure what your allocation goal was for FIRE, but if you haven't met your maximum target, one more dip is perfect for finishing an overweight position, allowing much more freedom to trade capitulations in an upswing. You also said a, "starter position," so I can't be sure of your strategy.
As far as where I see then next quarter, I'm far from an expert. I usually come from the approach of looking for the deviation from the mean. In this case, that's a quarter of uncertainty and hemoraging (the current trend), shaking out the remainders of the past and then returning on the path to all time highs as they meet their guidance. I don't necessarily see them going any higher, and not with certainty as others have stated. I'll be mostly out by then, anyway, if all goes well.
I personally don't see anything that should stop them from meeting their guidance, but I understand your skepticism. It's been hard to see what the real picture is from last quarter, but from the build up in inventory alone by the start of the Q, hitting that 30m mark you mentioned shouldn't be an issue. I think they do have a competitive advantage, but they haven't finished establishing it yet.