With the cannabis industry projected to continue growing at a frenetic pace, marijuana companies have conjured up dozens of innovative ways to profit from this rare opportunity. Some, like Aurora Cannabis (NYSE:ACB) spent small fortunes ramping up their production capacity. The Edmonton-based pot grower is expected to be the leader in this category in a few years' time. But when it comes to cannabis products, one small company, namely The Supreme Cannabis Company (OTC:SPRWF), is proving that quantity may not matter as much as quality.

Premium weed

Supreme Cannabis' pompous name aside, it is worth considering just how the Ontario-based pot grower is looking to make a dent in the cannabis space. Simply put, the company plans on giving customers more bang for their bucks. Supreme Cannabis' dried flower products are designed to give consumers a unique experience, from their very appearance and texture to their size and, of course, their taste.

dried cannabis in glass jars

IMAGE SOURCE: GETTY IMAGES.

These products also contain a higher concentration of tetrahydrocannabinol (THC) than average. (THC is the chemical ingredient in weed that is psychoactive, leaving users with a euphoric or "high" feeling.) Focusing on premium weed offers two main advantages.

First, this market is far less saturated than the regular dried cannabis segment. Sure, Supreme Cannabis does have several competitors in this area, including Flowr Corp., (OTC:FLWPF) but overall, there are fewer players in this space, and the illegal market isn't flooded with premium weed either.

Second, premium weed often comes with a premium at the point of sale. This could allow Supreme Cannabis to earn higher margins than most of its peers.

But the company isn't just focused on dried flower products. Supreme Cannabis recently made two important acquisitions to expand its product offerings. The company first acquired Blissco -- a company that focuses on the health and wellness segment -- for about CA$48 million. Supreme Cannabis also acquired privately held medical cannabis company Truvera for about $20 million. 

The goal of these acquisitions -- particularly that of Truvera -- is to manufacture alternative cannabis products with a view to profit from the legalization of derivative products in Canada.

But is it working?

Supreme Cannabis' strategy may sound great in theory, but what matters is whether and how well the company can implement it in the real world. Fortunately, Supreme Cannabis seems to be doing pretty well. During the fourth quarter, the company reported sales of 19 million Canadian dollars, which represented a 90% sequential increase and a whopping 436% year over year. Further, Supreme Cannabis managed to post positive adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for the first time. Note that many pot companies that would dwarf Supreme Cannabis haven't achieved this milestone yet.

Supreme Cannabis isn't showing signs of slowing down, either. The company projected that for fiscal year 2020, its revenues would come in between CA$150 million and CA$180 million.

Something to think about

There is no shortage of cannabis stocks from which to choose, and while Supreme Cannabis seems to be evolving well, some of its competitors have sales and revenues figures that are much higher. That being said, the company has other perks to offer investors. Not only are its shares worth a measly $0.79, but the company also offers a comparatively attractive valuation. No wonder, then, that Wall Street thinks relatively highly of this small-cap cannabis stock.