The Supreme Cannabis Company, Inc. (TSE:FIRE) said last week it acquired privately-held Toronto-based Truverra Inc. in a $20 million all-stock deal that will help the pot firm produce cannabis derivative products when they are legal and available to be sold in Canada later this year.
The move will give Supreme Cannabis access to Truverra’s Canadian Clinical Cannabinoids Inc. (CCC) subsidiary which includes a 5,000 square-foot Health Canada licensed facility in Scarborough, Ont. that the company plans to re-purpose into a state-of-the-art extraction facility. At the site, Supreme said it will produce high-quality cannabis extracts, including concentrates and vaping liquids.
“The recent introduction of Health Canada’s amended cannabis regulations creates a distinct opportunity for Supreme Cannabis to establish a leading position in the cannabis extracts markets. With the acquisition of Truverra, we secure a Toronto-based facility equipped to extract our high-quality inputs for concentrates and vaping liquids in the near-term,” said CEO Supreme Cannabis, Navdeep Dhaliwal in a release.
The deal will also give Supreme Cannabis a foot in the door into the European market by gaining control of its Truverra’s other subsidiary Truverra Europe that is located in the Netherlands and sells a broad portfolio of hemp-based CBD products in several EU markets, particularly in the UK.
“Truverra’s operations also provide an additional entry point into Europe’s CBD wellness market, where Truverra Europe has successfully launched multiple CBD products in various jurisdictions,” Dhaliwal added.
Supreme also said Truverra’s management team will bring diverse global experience that spans pharmaceuticals, medical cannabis, life sciences, natural health and food industries. The acquisition is expected to close by the end of August 2019.
Just Announced: Supreme Cannabis has acquired established medical #cannabis brand @Truverra! We expand our portfolio to produce cannabis products ready for Canada's Cannabis 2.0 and will serve as a global medical brand. Click here: https://t.co/ElcSPJ6zb1 #FollowTheFire $FIRE pic.twitter.com/7VYMms6qYJ
— SUPREME. (@TheSupremeFIRE) July 17, 2019
Supreme seeing green in vape segment
Supreme Cannabis was one of four major Canadian pot companies that partnered last month with vape industry giant Pax Labs to develop premium vaporizers. (The other three companies include: Aphria Inc. (NYSE:APHA)(TSX:APHA), Aurora Cannabis Inc. (NYSE:ACB)(TSX:ACB), OrganiGram Holdings Inc. (NASDAQ:OGI)(TSX-V:OGI))
According to BDS Analytics, in California vapes accounted for $282 million of sales in 2017 while all other cannabis concentrated products accounted for $77 million of sales.
In Canada, “Legalization 2.0” will begin on Oct. 17, but vaporizers and other next-generation products won’t hit store shelves by mid-December once licensed producers like Supreme Cannabis prove to Health Canada their new products meet with federal regulations.
Supreme said its new CCC extraction facility will also be used to produce concentrate products under its subsidiary 7ACRES and through its partnership with Khalifa Kush Enterprises Canada ULC (KKE). The company announced last month it teamed up with American rapper Wiz Khalifia and KKE introduced its first product called KKE Oils, a high-potency THC oil.
Supreme Cannabis’ portfolio also includes its subsidiary Cambium Plant Sciences, a plant genetics and cultivation intellectual properties company, and Medigrow Lesotho, a cannabis oil producer located in a small, southern landlocked African nation.
Supreme Cannabis shares jumped 13 per cent to $1.56 on Wednesday on the Toronto Stock Exchange after the news of its Truverra acquisition broke. But the company shares have dropped back to $1.41 when markets closed Monday.