Canada’s Supreme Pharmaceuticals, a publicly traded supplier of affordable medical cannabis, has raised $3.6 million through its first tranche of a non-brokered private placement.
Headquartered in Kincardine, Ontario, Supreme Pharma aims to apply commercial agricultural practices to medical marijuana production at its 342,000 square foot hybrid greenhouse facility that has been designed for maximum production efficiency. Recently licensed on March 11, 2016, Supreme is one of 25 Canadian companies with a Federal MMPR license to produce marijuana. However, Supreme is the first such company in Canada to exclusively focus on the B2B market, selling exclusively to distributors, according to its website.
Although outdoor cannabis production is cheaper, consumer demand weighs heavily toward higher quality hydroponically grown cannabis. Supreme claims that its Hybrid Greenhouse is the first of its kind, combining the benefits of both indoor production with the economies of greenhouse cultivation into a single modular design facility. Such a model provides for a low cost of production, reduces management, operational, and regulatory overhead compared to multi-facility operations, and provides for a low risk of crop failure.
The company plans to use the fresh capital to fund the expansion of its Kincardine facility and for general working capital allocation. The seven-acre facility, located on 16 acres of land at the Bruce Energy Center, can produce more than 50 million grams of medical cannabis per year at full capacity. Its modular design allows for compartmentalization of products, splitting space between medical and recreational production across an eventual 100 3,000 square foot grow rooms, which can also be rented or used for custom contract cultivation.
“One month ago we secured supply agreements with five Canadian medical marijuana Licensed Producers for substantially all of the expected output of ‘Phase 0’ of our seven-acre hybrid greenhouse,” said John Fowler, CEO of Supreme in a company statement. “Given the strong demand, we will begin ‘Phase 1’ expansion of an additional 80,000 sq. ft. of hybrid greenhouse area. The completion of Phase 1 is projected to increase total production capacity to over 10,000 kg per annum, subject to regulatory approval.”
The company told AgFunder that this financing brings the company’s total raising to $15 million to date, and if the company established goals are met, its expects to see annual profits from the Canadian market exceeding $150 million by 2018.
Looking ahead, Supreme expressed in a company statement, that it may consider completing a second tranche of financing which will be extended to both existing and new investor in the near future.
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Lynda Kiernan