The Supreme Cannabis Company, Inc. (OTCQX: SPRWF) released its financial and operating results for the fourth quarter and year ending June 30, 2020, as total revenues fell for the quarter, but were up for the year.
“Fiscal 2020 was an important transitional year for Supreme Cannabis where we streamlined our operations, reorganized our team, and expanded our portfolio of brands and products that will drive sustainable revenue growth,” said Beena Goldenberg, President and CEO. “Looking into 2021, we will continue to focus on efficiency throughout the organization.”
In the fourth quarter, total revenue fell slightly to $10.8 million from last year’s $11 million as stores were closed due to the COVID-19 pandemic. The net losses were trimmed to $33 million from last year’s net loss of $73 million. Despite the pandemic issues, Supreme reported that recreational net revenue rose to $7.3 million, an increase of 27% quarter-over-quarter. Recreational sales volumes were 1,449 kilograms, up 10% quarter-over-quarter, while the average selling price per gram for recreational sales in Q4 2020 was $5.00, up 16% quarter-over-quarter. The company said that the increase in recreational sales was due to the company’s strategy to focus on the recreational channel as the primary revenue source. “The quarter-over-quarter increase in the Company’s average selling price for recreational cannabis was primarily driven by lower discounts and return provisions compared to the three months ended March 31, 2020.”
However, overall net revenue decreased 2% to $9.5 million in the fourth quarter from $9.7 million in the third quarter. This was primarily driven by a change in the company’s focus from the domestic wholesale channel to its growing recreational channel. Wholesale net revenue in the quarter was $2.3 million, down 43% quarter-over-quarter.
For the full year of 2020, Supreme delivered total revenue of $44 million versus 2019 revenue of $43 million. The net losses for the year were a whopping $150 million versus the net loss in 2019 of $14 million.
Supreme Cannabis ended the quarter with a total cash balance of $28.4 million. The company refinanced its debt following the end of the quarter and there are no debt maturities for two years, and total debt was reduced by $69.8 million. Supreme said it has substantially completed the right-sizing of its operating structure with the right teams in place to produce a differentiated product line in-house efficiently. The company said it remains focused on cost containment and is fully-funded to execute on all planned initiatives.