Supreme Cannabis Ready for Legalization 2.0 with Truverra Acquisition

The Supreme Cannabis Co. [stock_market_widget type="inline" template="generic" color="default" assets="FIRE.TO" markup="(TSE: {symbol} {currency_symbol}{price} ({change_pct}))" api="yf"] announced on July 17 that they have entered into a definitive agreement to acquire privately-held Truverra in an all-stock deal. In return, Truverra will receive 14.7 million shares of Supreme, valuing the company at $20 million.

Since the announcement, shares of Supreme have risen 8% as of market close today.

Since the announcement, shares of Supreme have risen 8% as of market close today, reaching gains as high as 14% mid-day. Investors clearly like the deal — here’s why.

Value Extracted from Truverra

Truverra is a Toronto, Ontario based company focused on the development, production, and marketing of cannabis-derived medical products. They have two wholly-owned subsidiaries: Canadian Clinical Cannabinoids (CCC) and Truverra Europe.

Their CCC facility is a 5,000 sq. ft. Health Canada licensed research and extraction facility. Supreme intends on refocusing CCC to produce high-quality concentrate and vape extracts. Their European branch is located in the Netherlands and is focused on producing hemp-based CBD products.

Supreme Position for Success

Ultimately, this is a prudent move by Supreme before cannabis Legalization 2.0 (edibles and extracts). Utilizing Truverra’s extraction expertise allows them to focus on what they do best — growing exceptional product. With Supreme’s high-quality flower as an input, you can expect the final product to be equally as impressive.

This also provides Supreme with exposure to the European CBD market. With Truverra’s heavy medical focus, the backstop of research results they have gathered is very valuable. Supreme sees the Truverra acquisition as a key component of their global medicinal cannabis strategy.

The deal is expected to close before the end of August upon approval from Truverra shareholders. Given Truverra is a private company, it seems unlikely there will be any challenges closing the deal. It’s clearly a solid opportunity for both companies.

The Supreme Cannabis Co. is a Market Awareness Client of Capital 10X

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Supreme was a market awareness client of Capital 10X.

The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

Evan Veryard
Evan Veryard has a Bachelor's of Chemical Engineering from McGill University and a MaSc. of Chemical Engineering from RMC. He has over 6 years of research experience focusing on industrial materials. Address: 682 Indian Road, Toronto, Ontario, M6P 2C9. Phone: 416-721-8257.
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