Supreme Pharmaceuticals Builds Marijuana Production Facility in Canada
VANCOUVER, BC / July 10, 2014 / Members of the Cannabis Campaign for Legalizing Marijuana in D.C. marched into the Board of Elections headquarters this Monday with 57,000 signatures demanding an initiative on the November ballot.
Initiative 71 will allow a D.C. resident to possess 2 ounces of marijuana for personal use, to grow up to six plants and to share marijuana with friends, though not to sell it.
Fighting the legalisation of marijuana is like fighting slavery, women’s-right-to-vote or gay marriage. You are going to end up on the wrong side of history.
Canada’s conservative government has woken up to this fact and has begun regulating and taxing medical marijuana production – which many industry observers believe is a precursor to full legalisation.
Supreme Pharmaceuticals (SPRWF-OTC) (SL-CSE) is a green rush leader, pursuing multiple medical marijuana facilities in Canada and applying for several Marihuana for Medical Purposes Regulation (MMPR) production licenses.
"Health Canada reviewed our 400 page application for the Southern Ontario facility and told us that everything checks out," stated Supreme President and CEO, David Stadnyk in an exclusive interview with Financial Press, "we’ve been pre-approved for 24,000 kilograms of marijuana production per year, which is the largest license they’ve granted in Canada. The only contingent is to make sure our security is in place."
Recent successes in the medical marijuana space include producers Tweed (TWD-TSX.V) which has a market cap of $117 million, Windfire Capital (WIF-TSX.V) whose stock has increased 300% in the last 12 months and Affinor (AFI-CSE) which has experienced 1000% share price increase in the last two months after declaring its intention to diversify into medical marijuana and industrial hemp.
The new Canadian system licenses commercial producers to grow and distribute medical marijuana to meet the expected demand growth. There are about 40,000 qualified patients today. In ten years the number of qualified patients is expected to be over 450,000 (source: Health Canada).
"Supreme Pharmaceutical’s facility is the size of six football fields," stated Stadnyk, "The security systems will cost will be about $3 million. We need fences, cameras, alarms and a Level 9 vault that can hold $15 million worth of marijuana. It’s like Fort Knox. We have a staff of 15 engineers and construction workers there right now installing this state-of-the-art security system."
Supreme is currently providing Health Canada additional documentation relating to security measures, site survey, aerial photographs, principal and technical employees and record keeping.
"There are a lot of companies currently applying for a government licence to produce medical marijuana," stated Stadnyk, "but we are already approved which is the first major hurdle."
Stadnyk expects to be in Phase One of production with the next six months, growing in about 60,000 square feet. On the revenue side the company anticipates $10 million revenue the first year, ramping up to about $120 million in year three. The profit margins are estimated at 35%.
"I’ve been making deals in the capital markets for 25 years," stated Stadnyk, "but I’ve seldom had a situation like this one where everything lined up so smoothly. We needed $1.5 million in the bank to secure the production facility and we happened to have that money in the back. We’ve assembled the best team I’ve ever worked with, and the stars are lining up."
Construction has begun on the core production and processing rooms and the high security areas of the facility, including a 1200 square foot custom-designed vault, with insulated walls and steel security doors. The vault will be designed and installed to meet Health Canada’s requirements to store dried marijuana.
"The path to production is clearer and less capital intensive than the mining industry," stated Stadnyk, "You don’t need $300 million to remove a mountain top, or build a system of shafts into the ground. There are great opportunities in the medical marijuana industry, and should marijuana become legal, which many are predicting, that will put us in an even stronger position."
Supreme has also secured an option to purchase a South Okanagan based Medical Marijuana company which is currently producing and selling Marijuana under the older MMAP licence. The Okanagan Company has applied for a commercial MMPR license to produce and sell commercially grown medical marijuana.
Medical Marijuana is currently being prescribed to treat pain, neurological disorders, mental health, back spasms, and gastrointestinal disorders. There are currently 12 companies in Canada that have a license to grow marijuana commercially. Exploding demand and morphing regulatory environment are creating a once-in-a-lifetime investment opportunity for early movers into government-sanctioned production facilities.
Supreme is in the final stages of gaining a license to build out and operate a 342,000 square foot facility capable of producing up to 24,000 kilograms of medicinal marijuana per year. At $5 per gram, the facility would generate about $120 million a year in revenues running at full capacity.
Supreme is currently trading at .07 with a market cap of $10.1 million.
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SOURCE: Financial Press