VANCOUVER, British Columbia, Aug. 8, 2014 (GLOBE NEWSWIRE) -- According to Canadian employment lawyer David Whitten, medical marijuana patients have a legal right to ingest their prescribed drugs at work.
"Employers are going to ignore Mary Jane at their own peril," Whitten told CTV News, "She's coming to the dance whether they like it or not."
Supreme Pharmaceuticals (OTC:SPRWD) (CNSX: SL ) is a leader in this space, pursuing multiple medical marijuana facilities in Canada while evaluating medical cannabis investment opportunities within the State of Arizona.
Medical Marijuana is currently being prescribed to treat pain, neurological disorders, mental health, back spasms, and gastrointestinal disorders. Surging demand and a rapidly changing regulatory environment are creating a once-in-a-lifetime investment opportunity for early movers into government-sanctioned production facilities in the U.S. and Canada.
"We intend to mitigate market and legislative risk," stated a Supreme Director, in an exclusive interview with Financial Press. "Arizona is a promising market and we have begun investigating opportunities there to complement our Canadian property."
Recent successes in the medical marijuana space include producers Tweed, which has a market cap of $98 million, Windfire Capital whose stock has increased 300% in the last 12 months and Affinor, which has experienced 700% share price increase in the last four months after declaring its intention to diversify into medical marijuana and industrial hemp.
Supreme recently announced a 1 for 5 share consolidation, which is expected to be a major catalyst for the company going forward.
"Now that the shares are consolidated it prepares us to attract institutional funding and move forward with the project," stated the director. "Because our facility is so big, it does require capital expenditure."
Many institutional investors have internal rules forbidding them from investing in companies trading at less than .10. Supreme's consolidation opens the door to raise money at a higher price, with less dilution, while putting the stock in the hands of strong long term investors. Likely financing participants include brokerage firms, boutique investments banks and merchant banks.
"Prior to the 1 for 5 share consolidation, we had 290 million shares outstanding, trading around .08.," confirms President and CEO, David Stadnyk. "That was a lot of shares to continually eat through. Now we have 59 million shares outstanding, trading around .35. It is a much tighter structure and it puts us in a position of strength."
Without the consolidation, the company believes it could have raised $3 million without institutional investment, and now a target of $5 million is achievable – which is what the company needs to complete the construction of the Southern Ontario facility.
"Security is the biggest single cost we are facing," stated Stadnyk. "You can imagine the public relations nightmare if a government-sanctioned marijuana facility was robbed. So - with good reason - the security protocols are rigorous."
To receive final approval from Health Canada the facility needs to be ready for a full grow cycle. The nursery, the vault, the grow rooms – everything has to be completely operational.
"As vigilant protectors of shareholder value," stated a Supreme Director, "we would not be doing this if we were not in possession of a preapproved license which basically says: 'assuming you do the following things, we will approve your license after the audit.'"
The Supreme greenhouse was originally a joint venture with Agriculture Canada used to grow tomatoes.
"The government spared no expense," stated Stadnyk. "Our civil engineers inspected the facility and said, 'Wow, this is a first class industrial facility that is over-built, in terms of construction, water supply, agricultural standards.'"
Supreme's key 'de-risking' factor is the preapproved letter. Without that, it is just one of 600 greenhouse companies applying for a license. A second significant de-risking factor is the size of its facility. At 342,000 square foot, the production facility is the size of six NFL football fields.
"Supreme has the potential to supply a significant percentage of the total Canadian market at full capacity," stated Stadnyk. "The government's agenda is to regulate fewer operations and collect tax. Is it more efficient to regulate and tax one 342,000 square foot facility – or sixty-eight 5,000 square foot facilities? From the government's point of view, bigger is better – and we are big."
Arizona is one of 23 states where marijuana is now legal for medical use. The state has 52,731 licensed users, with approximately 70% using marijuana for the treatment of chronic pain.
There are about 40,000 qualified medical marijuana patients in Canada today. Those patients include children suffering from epilepsy. In ten years the number of qualified patients is expected to be over 450,000 (source: Health Canada).
"An employer is not required to accommodate a secret prescription," Whitten told CTV News, "so you only really engage the protection of the legislation, of the Human Rights Code, by disclosing to your employer that you have a prescription. "
Supreme Pharmaceuticals is currently trading at .32 with a market cap of $18.7 million.
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Supreme Pharmaceuticals Suite #430, 580 Hornby Street Vancouver, BC V6C 3B6 Email: Phone: 604.674.2191
