Supreme Pharmaceuticals Inc. A New Entrant To MJ In Canada 12 comments
Apr 5, 2014 10:19 AM | about stocks: SPRWF
With all the excitement over Tweeds new listing, many less known names are springing up with stated intentions of entering the medical marijuana industry. The green rush attracts a wide assortment of interest but one that stands out is Supreme Pharmaceuticals Inc.
www.supremepharmaceuticals.com/
Let's start with the CEO because investing in a company is often an investment in people and the management.
Three years ago, David Stadnyk went from the front pages of the Vancouver Sun as that daily newspaper's acclaimed "Sports Mogul" to personal and financial downfall. Those days are over. Today, Stadnyk, now Director, President, and Chief Executive Officer of Patch International Inc., (PTII) runs one of Canada's fastest growing junior gas and oil exploration companies with major interest in the Biomedical research company Pharmaxis, the #1 performing stock in the pharmaceuticals area on the Australian Stock Exchange.
Over the past twenty years David Stadnyk has accumulated a diverse background in corporate management and finance. The former tennis pro (he played Pete Sampras when Pete was only 14 years old) graduated from the University of British Columbia and went on to become a licensed stockbroker with Midland Walwyn Capital Inc., Yorkton Securities Inc., and Georgia Pacific Securities Corp. from 1988 to 1991. Stadnyk served as the chairman, president, secretary and a director of Goanna Resources, Inc., a publicly listed mining company from its inception in June 1997 to March 1999.
In 2000, David Stadnyk invested his impressive profits from the stock market in a series of community projects close to home and in sports. Stadnyk created and served as the chairman of Grand Slam Radio which launched Team 1040, Vancouver's first 24-hour sports radio station. He also created and was the chairman of Starlight Sports & Entertainment, a sports entertainment company that owned the professional soccer teams Vancouver Whitecaps and Vancouver Breakers and created the lacrosse team the Vancouver Ravens from October 1999 to May 2002.
That was then: "Then" being before 9/11. "I went from being in the spot light and making lots of money to having the stock market crash and having my wife leave me taking my kids with her. The market crashed and I crashed," remembers Stadnyk, who won Business in Vancouver's Under 40 Outstanding Achiever Award in 2001. "I wondered if I'd see the same people I saw on the way up back on the way down, and I did. Luckily, I was able to go to them during those frustrating times and get back on my feet again. I had unfinished business that I personally had to get to, that being in the form of charity work for children and for sports, and it fueled me."
David Stadnyk had been the president of A.C. Global Capital Group Corp. from July 1999 to September 2001 where he partnered with successful oil and gas entrepreneur Mike VanDale. VanDale was the owner of the Calgary professional soccer team whom Stadnyk had become acquainted with during his many meetings while he was heavily into the sports business arena. Together, VanDale and Stadnyk created Arsenal Energy Inc. which started with very little oil production and now produces more than two thousand barrels of oil per day. Stadnyk's positive experience with VanDale and Arsenal Energy would become invaluable in his future business ventures.
Come backs are always a thing to marvel and Stadnyk's is nothing short of miraculous. Taking $200,000, a wing-and-a-prayer, Stadnyk went to Australia and began convincing a Bio-medical team that he could fund their research if they allowed him to license their technology and list a company on the U.S. Bulletin Board, a move Bio Tech companies never make. But Stadnyk was convincing and came home with the deal. Next Stadnyk needed to fund his new company, Praxis, so he went to the top. He got back on a plane and knocked on the door of Rothschild International. Normally Rothschild would have never have put their century old money in some Wild West show junior market but again, Stadnyk was convincing. He came home with his deal fully funded. With a $200,000 initial investment, Stadnyk has built a small fortune of approximately 30 million dollars today with an expected increase up to 50 - 100 million dollars in the next 12 months and has positioned his Bio-Med Researchers with a company that not only became the all time leading Bio-Med stock trading on the ASX (psx on the ASX), but Pharmaxis (initially a Praxis subsidiary) has just announced that it is now listed on the NASDAQ Main Board (psxl on the NASDQ). More importantly, these Bio-Med Researchers have been able to advance some of their research medicines to Stage Three clinical trials and may one day soon have the answers for a cure on such debilitating illnesses as Diabetes and Cystic Fibrosis.
Sensing the emergence of the Energy Market, David Stadnyk was able to take his position in Pharmaxis and leverage it into a new company (Patch International Inc. trades in North America on the OTC:BB-Symbol: PTII and in Europe on the Berlin Bremen Stock Exchange - Symbol: PQG.) centered on oil and gas exploration. His first step was to immediately buy positions in 19 oil properties out of Alberta. By slowly acquiring positions in oil and gas properties located in strategic areas around the World, Stadnyk has begun to position Patch International to become one of the premier junior gas and oil exploration companies and has done it just at the time when oil prices have hit record-breaking barrel prices with countries like China and India fighting to pay as much as 8 times the value for Alberta oil companies.
"The capacity to come back is right there in each and every one of us," explains Stadnyk. "Along with many others, I have experienced the feeling of failure but it's not defeat unless you stop trying. Like any of us, I can definitely feel challenged at times but when you get knocked down, the only thing to do is pick yourself up and come back stronger. I could not be happier right now. I have a new partner in life and all of my children are back home with me."
Stadnyk is also picking up where he left off by contributing to the local community in general and the sports scene in particular. He is hosting a Gala event (The Gala of Golden Dreams) December 1st of this year where he will be raising funds for Canadian Olympic athletes at this black tie affair held at one of Vancouver's premier venues, The Sutton Place Hotel. Stadnyk plans to host this event annually for the next five years, raising $210,000 in the lead up to the 2010 Winter Games in Vancouver.
"It feel so good to be back in the position where I can make this kind of community investment and support causes that are important to me, let alone see my business interests shining," says Stadnyk.
He adds, "If I had to sum it up in a sentence it would be 'I'm coming back!'"
Source:
www.thevoyageurs.org/index.php?/topic/74.../
What's new
Past the initial investment in the management, the next place to focus is on the direction. Mr. Stadnyk is in a period of DD on a grow operation that has been operating under the previous (before April 1st, 2014 switch to MMPR) licensing requirements somewhere in the Okanagon region of British Columbia. Full details have not been released to identify the subject of his diligence but on April 4th pictures were posted on the company's website of the greenhouse.
The photo uploaded to Supreme's website drew comparisons to this growing operation in Kelowna depicted in the video. (Speculative but fun pursuit)
www.castanet.net/news/Kelowna/103696/Leg...
As investors we do not have all the answers to what operations Mr. Stadnyk is perusing but I see the CEO as a smart business man who likely has a solid plan. Time will tell and he has asked patience in this regard and a time window of about another 10 days to complete his due diligence on all the workings of this anticipated acquisition. He may even be looking at grouping several smaller operations together and an eye to our Southern neighbor (US) as a possible theater for the new business to operate in.
Another important tool for an investor is communication. In this regards Supreme Pharmaceuticals has been excellent in timing PR as real news becomes available. Not daily like some would like, but very soon after the news is relevant and concrete. The website is updated often and shows many characteristics not often seen on venture exchange companies that operate in the dark.
A couple of the press releases that have been attained at the website are shown here:
March 26, 2014
www.supremepharmaceuticals.com/index.php...
April 4th, 2014
www.supremepharmaceuticals.com/index.php...
Licensing question
The growing operation Mr. Stadnyk is currently reviewing has operated with a MMAP license under previous legislation and continues to do so while the new laws are being reviewed through the judicial process. Supreme has indicated their offer to purchase is contingent on receiving MMPR status and would take steps to insure the operations meet those standards. So also, one has to believe any other opportunities the CEO would consider in the future would be similarly focused.
Due Diligence period
The reason for the delay has been conveyed to investors through the website but briefly, the offer to purchase has a lengthy timeline attached with a $100,000 deposit and a $1,000,000 dollar plus stock price tag. Mr. Stadnyk wants to make sure the operation will be able to operate legally under the new guidelines before completing the transaction is my understanding.
Share structure
There are some 80 mm warrants outstanding @5 cents to be concerned about and 128 mm OS. (I welcome anyone who can find different)
Market Cap
Currently stands at 6-8 million depending on the trading day. This is microscopic in comparison to most MJ valuations. Supreme Pharmaceuticals has the potential to be the value play in the sector in exchange for the risk associated with the developing story. There is downside risk but the upside potential is enormous.
Pending deal
www.supremepharmaceuticals.com/index.php...
Tweed vs Supreme
I will concentrate on the pro argument for Supreme because I think the pro argument for Tweed is obvious (long TWD too).
The growing operation that Supreme is pursuing is bound to be much smaller in size but that may be a positive in a time when there are still too many growers and not enough customers affecting profitability of behemoths like Tweed. Lots of capacity to grow at Tweed but not enough customers yet. The delay in completing a move to MMPR legislation will hamper the bottom line of larger facilities and they also will rely on full legalisation before maximum profits can be realized.
The amount you pay for Supreme is substantially less. Most of that is because it is very speculative at this time but it also does not yet garner the headlines it could if the pending deal goes through.
Conclusion
Strong Buy but speculative. Buy because you believe in the management, buy because you see the potential and exuberance of investors in the sector, and buy because its a good trading stock too.
Disclosure: I am long SPRWF.
Themes: Marijuana grower Stocks: SPRWF
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0 Comments (12) Track new comments
Mikie713
Comments (56)
Looks like Stadnyk is a man who gets what he wants and knows how to persuade. Still the question of demand. I suppose it all has to start somewhere. The cannabis industry that is. Good work, Kuala, excellent DD, let's keep our eye on Supreme.
5 Apr, 10:47 AMReplyLike2
Kuala Kaimi
Comments (337)
Author’s reply » Thanks Mikie. I was happy to find out more about his background! The demand is the key. It's very weak vs supply at this time. I invest in the space because investors look more at the possibilities than the present realities. Always have to hold your breath when you invest in trending stocks!
5 Apr, 10:51 AMReplyLike0
Mikie713
Comments (56)
It's great to have your perspective in the mix here on SA. Those of us south of your borders need to know things may appear to work the same way as they do here, but there are differences. Some are subtle others not so subtle. I believe the major difference is the demand (at least for the time being). I also think full recreational use in the entire US is not necessary for many companies to thrive, whereas I believe that's not the case in Canada. For instance, it's very likely Oregon and California will go recreational by 2016 (if not sooner). Population wise from the Mexican to the Canadian border (California, Oregon, Washington), that rivals if not surpasses the population of the entire country of Canada. Companies like $XTRM and $CBGI already have potential (land use, demand) that far exceeds the likes of $TWD and $FITX. But let's never forget, as you point out, "present realities" don't factor into investor enthusiasm.
