An overlooked cannabis stock has several advantages over leading stock Cronos Group
While Cronos Group Inc TSE: CRON has enjoyed steadily rising stock prices, a very similar stock has not seen nearly as much attention. Supreme Cannabis Company Inc CVE: FIRE is considered a smaller cannabis producer, although it currently grows around twice as much cannabis as Cronos group. Here is a look at the advantages it has over Cronos.
Despite price increases over the past two months, Supreme Cannabis stock is still down year-to-date. It currently grows 13,000 kilograms of cannabis per year to Cronos Group’s 6,500 kilograms and has big plans to grow more. By the end of 2018, Supreme Cannabis expects to complete the buildout of additional flowering rooms to boost its growing capacity to 50,000 kilograms.
While Cronos has supply agreements with British Columbia and Ontario, Supreme Cannabis has supply agreements with six provinces including Ontario. Supreme Cannabis also has a supply agreement with leading marijuana stock Tilray, though the agreement may be limited to the medical marijuana market.
Supreme also has a global distribution deal that rivals Cronos’ international ambitions. Supreme partnered with Lesotho-based Medigrow, a company that exports medicinal cannabis oil.
According to analysts, even Supreme’s poor stock performance can be seen as an advantage over some of its peers. It indicates the stock valuation has not become as exaggerated as other stocks in the industry. Its market cap of $420 million is significantly lower than that of Cronos Group at nearly $2 billion.
However, one major advantage Cronos Group has over Supreme Cannabis is its deal with United States marijuana retailer MedMen. The two companies plan to launch a string of cannabis retail outlets throughout Canada.