John Fowler founded 7ACRES, a licensed producer of cannabis, in 2013. In 2014, 7ACRES went over to become part of The Supreme Cannabis Company, which today stands as a unique business model in the Canadian medical cannabis sector.
Indeed, The Supreme Cannabis Company operates as a wholesaler, a decision taken after receiving its sales approval in the summer of 2017. It produces dried flowers it resells to other licensed producers in charge of the interaction with the client. For Fowler, Supreme’s approach is a step towards the future. He explains what drove the company to focus on wholesaling: “The first reason was that we were a relatively young player among the licensed producers. Consequently, we had to find a way to rapidly grow our patient network. Through our partner companies we have been able to reach more than 20,000 patients rapidly. Another reason is that we think that the future model of cannabis distribution will move away from the licensed producers selling directly to patients. There will be a similar model as in the beverages and alcohol industry with intermediaries, such as pharmacies, taking over the retail part, while licensed producers will focus on their core strength, which is production.”
By pursuing this focus and not venturing beyond a narrow band of products, The Supreme Cannabis Company also demonstrates it understands the risk of execution attached to an entirely new business sector in which everything still remains to be defined. “Although there are many great opportunities in the cannabis field, it is not about on how many paths you engage, it is about how many paths you walk all the way down from commercialization, to distribution, and eventually revenue,” notes Fowler.
It goes without saying that, as with any business model, profitability remains the goal at the end of the day. Fowler’s company seems to be heading in the right direction in that regard as well: the first quarter sales ending in September 2017 closed at CAD 1.5 million (USD 1.16 million), ranking amongst the top seven cannabis companies in Canada and being by far the best first quarter of any licensed producer. Further growth settled in in the second quarter and is expected as Supreme is also expanding production. With a predicted production capacity of 50 million grams, a conservative wholesale pricing range would predict a top line revenue of CAD 200-300 million (USD 154-231 million) within a two year timeframe.
The Supreme Cannabis Company seems engaged on the fastest path forward. Finally, Fowler sums up what medical cannabis is and should all be about: “I do not want to sound like a maverick, but I believe cannabis can change the world and it can change the way we look at medicine and the ways we look at what it means to be successful.”
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