Let’s look at the pros and cons at supreme stock Hey guys, I think we all appreciate an honest and genuine of someone who is not a useless pumper or an excessive basher. I think being blindly optimistic about a stock without have a balanced outlook can leave many in the red for much longer than they anticipated and may never recover . So with being said let me take a stab at it:
pros:
7Acres - by far the MAIN reason invested in supreme cannabis. This is a true quality product that stands out with some of the premium industry leaders such as broken coast and San Rafael. This is our crown jewel of the operation and wait until more products come out from the 7acres family of brands.
focus on premium bud vs value - I like that we are not trying to complete in the value segment too much, although we have our Hi-way brand I don't see it as anything huge other than having a footprint in different segments for brand building purposes. As the above point mentions, we are the BEST known for our amazing 7acres brand.
beena goldenberg- former CEO of Hain-Celestial Canada- she knows on how to build health brands and she's well on her way to make us a fulll fledge CPG company. Strong ceo at the helm and although the raises are diluting us i believe she's got good sense of how to use the money effectively for long term growth.
strong cash position on hand - cash is king in huge growth industries such as cannabis and again not loving the dilution but if used correctly can be very fruitful.
2 quarters in a row in + adjusted EBIDTA- were definitely heading in the right direction and the last ER proves it.
Cons:
700+ million shares - leaves us extremely exposed to shorting and "barcoding" as many see it. Hard to attract any serious institutional investment when you have such a huge share count. Cant see a buy back anytime soon so a reverse maybe be actually not a bad thing long term
bad reputation - previous management has really tainted fires reputation to be trusted and even though beena is turning it around, it's going to take time. Apha is a perfect example and also why they have chosen to take the tlry name instead.
have 70 million in debt that needs to be managed - we still have tons of debt on our book and even with our cash position this is a concern that we need to address overtime. Maybe part of beenas plan is to pay back some debt.
lastly a weaker sales quarter coming- if you heard Beena and listed carefully she tells us that we are going to experience lower sales as a result of the shutdown so even though I believe it's a temporary issue that impacted all LPs, it's a delay in our quarter over quarter improvement . We may not see improvement until 2 quarters from now.
Final thoughts:
I still strongly believe that supreme will do well. My opinion is that we get bought out like Zena did and my hope it's above 0.50 at the very least because I believe our strong brand positioning will be key for a big player who will be able to accelerate sales instantly. My thoughts cronos or another big boy will do a reverse acquisition.