FIRE Stock Climbs: Why is Supreme Cannabis Up When Market is Red?

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FIRE stock is up almost 6% at the time of writing. Selling for $1.99 CAD on the TSX, The Supreme Cannabis Company (TSX:FIRE) (OTCQX:SPRWF) is in a precarious position.

Operating in the ever-expanding cannabis sector may lead investors to believe that lower-priced stocks offer substantial buy-in potential. And some do, but does Supreme Cannabis?

Penny stocks are notoriously risky investments. Is that any different in the cannabis sector?

FIRE Stock

The Toronto-based company produces and distributes consumer-centric cannabis products. Its flagship brand is 7ACRES—which holds the title for being the first licensed producer in Canada for high-quality cannabis.

The company’s model is “business-to-business.” This means The Supreme Cannabis Company sells 7ACRES products to other businesses and doesn’t worry about packaging, retail sales, or clinical usage.

Its unique model has delivered; in the last year, FIRE stock has risen by 27.3%. Okay, but so have a lot of cannabis stocks—with recreational legalization across Canada, the entire cannabis industry has exploded, not only across the country but internationally as well.

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7ACRES is Strong for Fire Stock

Interestingly, what investors might take from Supreme is consistency from its 7 ACRES brand. With a market cap of $500 million, Supreme is not the biggest cannabis company out there. But I’m not sure that’s the point here. FIRE’s low price offers value for money because 7ACRES is steadily doing good business.

In January, Supreme completed a new phase of construction for a greenhouse facility in Canada. It now has 19 out of a planned 25 flowering rooms operating and producing 7ACRES products. Further to that, 7ACRES secured supply agreements with the New Brunswick Liquor Corporation and the province of Saskatchewan.

Province supply deals offer companies consistent and lucrative revenue streams. It also shows that the 7ACRES name is a respected and trusted brand while at the same time exposing the product to a new consumer base.

Fire Stock: The Takeaway

All this is undeniably a good sign that business should continue to be consistent if nothing else. Coupled with the unstoppable trend that is legal cannabis, well-positioned companies such as Supreme Cannabis are likely to reward investors.

Of course, penny stocks will always remain risky, so deciding on whether FIRE stock offers quality for the low price-tag remains up to you.

>> Read More Supreme News

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