Supreme Cannabis Company Inc. (OTCMKTS:SPRWF) has reported its second-quarter 2020 financial and operating results and also provided an update on its outlook and strategy.
Supreme Cannabis’ Q2 2020 revenue misses estimates
The company posted disappointing Q2 results with revenue coming in at CA$9 million missing on consensus revenue estimates of CA$10.1 million. Revenue dropped 10% from Q1 2020 and around 52% from June last year when the company reported revenue of CA$19.1 million. The drop in the company’s net revenue can be attributed to the planned transition from focusing on wholesale sales to retail sales. Similarly, actual and projected price adjustments of $0.5 million affected the company’s revenue.
Supreme Cannabis has been undergoing a challenging transition from wholesale to recreational sales. The change from wholesale to recreational retail sales has had a huge impact on sales, but retail sales are on the rise, which matches the overall market growth of 14%, an indication that the company is not losing its market share.
Supreme Cannabis to expand its product brands portfolio in2020
Recently the company indicated that it was implementing a new operating structure that included the reduction of staff to boost efficiencies and support long-term growth to profitability. The Interim President and CEO of Supreme Cannabis Colin Moore affirmed that the company is trying to align its structure and expectations with the industry outlook. He added that the company is well-positioned to accelerate its CPG-focused transition because of its strong cash position.
In the second quarter, the company continued to build on the success of the 7ACRES brand and launched its first pre-rolls under the Sugarleaf by 7AC. This will help the company in addressing mid-tier price points as well as continue with the introduction of products offering convenient consumption experiences.
The company plans to expand its brand portfolio this year to help in capturing more market share as well as boost revenue growth. The products Supreme Cannabis will launch under the brand will boost sales volumes through growth and sourcing of more cannabis inputs not meant for 7ACRES products.