The Supreme Cannabis Company Inc. (TSX: FIRE) (OTCQX: SPRWF) (FRA: 53S1) Launches Cambium Plant Sciences

• SPRWF has remained at the center of the cannabis space since 2014
• The company has a licensed producer subsidiary in Ontario
• Supreme Cannabis recently launched new subsidiary Cambium Plant Sciences
• Bank of America recently initiated coverage with an initial ‘Buy’ rating

The Supreme Cannabis Company Inc. (TSX: FIRE) (OTCQX: SPRWF) (FRA: 53S1) is Canada’s only large-scale premium cannabis producer. The company formed its wholly owned 7ACRES subsidiary as the first licensed producer (“LP”) centered on growing high-quality cannabis in high quantities. 7ACRES provides enthusiasts with handcrafted cannabis flower that delivers a premier experience. Headquartered in Toronto, Supreme Cannabis has supply agreements in place throughout eight of the 10 Canadian provinces.

Supreme Cannabis’ 7ACRES operates a 440,000-square-foot facility in Kincardine, Ontario, including licensed flower room space totaling 180,000 square feet. 7ACRES is on course to become Canada’s foremost cultivator of consistently first-rate commercial cannabis. With its recently-expanded flowering room, 7ACRES’ yearly production capacity estimate increased from roughly 17,500 kg to 26,250 kg. The company expects that, with additional production efficiencies following the licensing of all 25 of its flowering rooms, 7ACRES’ potential capacity could reach about 50,000 kg annually (http://nnw.fm/bjb0B).

In addition to 7ACRES, Supreme Cannabis’ brands include wholly owned subsidiary Cambium Plant Sciences, a cannabis genetics firm. The company recently announced the launch of Cambium Plant Sciences, which is located in Goderich, Ontario (http://nnw.fm/2AQLy). Additionally, its brands include a worldwide partnership with Khalifa Kush Enterprises (“KKE”), led by musician Wiz Khalifa, and its investment in Medigrow Lesotho.

Supreme Cannabis’ strategic agreement with KKE is for cannabis-related consulting services and the development and commercialization of distinct product lines (http://nnw.fm/8jCY8). KKE will provide cannabis-related consulting services to Supreme Cannabis, while SPRWF will be the exclusive producer of KKE-branded products in Canada and, subject to certain approvals, globally, excluding the United States (http://nnw.fm/hed9A).

In 2018, Supreme Cannabis entered into a definitive agreement to complete a $10 million strategic equity investment in Medigrow Lesotho (PTY) Limited. Medigrow Lesotho is a federally-licensed producer of cannabis in the Kingdom of Lesotho in southern Africa. Via this distribution partnership, CBD (cannabidiol) oil is expected to be exported to Canada and other global markets in the European Union and South America. Medigrow is licensed by the Lesotho Ministry of Health to cultivate and manufacture medical cannabis and cannabis oil products (http://nnw.fm/mMd1h).

In conjunction with Supreme Cannabis’ recent launch of Cambium Plant Sciences, the company is investing approximately $14 million in the construction of a state-of-the-art, 34,000-square-foot research and development facility in Goderich. Cambium’s aim is to lead the agricultural revolution of cannabis genetics, redefining consumer experiences and cultivation economics across the international cannabis industry.

“Cambium will develop cultivars that benefit our in-house brands, as well as our domestic and global cultivation and manufacturing partners,” Navdeep Dhaliwal, Supreme Cannabis’ CEO, stated in a news release. “Initially, Cambium is expected to benefit from 7ACRES’ established genetics, existing infrastructure and unparalleled plant knowledge of its team.” The expectation is that Supreme Cannabis will begin the retrofitting of the Cambium facility in early summer of this year. Moreover, Cambium Plant Sciences has begun the Health Canada licensing process.

In addition, on April 17, 2019, Bank of America Merrill Lynch (“BofA”) announced the initiation of coverage of the company with a ‘Buy’ rating and a C$2.50 price objective, according to an official coverage initiation announcement issued by the investment bank.

According to BofA, there are several factors that contribute to the attractiveness of Supreme Cannabis. Approximately 80 percent of the Supreme Cannabis production is sold in Canada. Supreme is selling in bulk at a similar price range to that of its peers in retail. This means that the Supreme Cannabis pricing model is the same, but the margin delivery format is higher. Moreover, Supreme Cannabis trades at the low-end of the BofA coverage group on E/V sales, which makes it attractive on DCF. BofA estimates that Supreme Cannabis sales will grow from C$9 million in 2018 to C$234 million in 2022. The growth on an annual basis will be 234 percent in 2020, slowing down to 64 percent in 2021 and 36 percent in 2022. Gross profits are also set for growth, from C$2 million in 2018 to C$131 million in 2022, at a rate of over 263 percent in 2020, 91 percent in 2021 and 44 percent in 2022, according to BofA estimates.

For more information, visit the company’s website at www.Supreme.ca

NOTE TO INVESTORS: The latest news and updates relating to SPRWF are available in the company’s newsroom at http://nnw.fm/SPRWF

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