It doesn’t yet have a sales license, but Supreme Pharmaceuticals (Supreme Pharmaceuticals Stock Quote, Chart, News: TSXV:FIRE) is making real progress, says Canaccord Genuity analyst Matt Bottomley.

This morning, Supreme Pharamaceuticals announced it had received several updates from Health Canada regarding its cultivation licence pursuant to the access to cannabis for medical purposes regulations. Management said Health Canada was in the process of testing its dried cannabis samples and has removed the previous production and storage capacity of the licence, allowing Supreme to store up to $150-million worth of cannabis at any given time.

“We are pleased to be making progress with Health Canada,” said CEO John Fowler. “The forthcoming approval to sell cannabis genetics is one leg of our B2B sales model, allowing us to monetize our genetic inventory. As we await an update on the sales approval, we continue to cultivate and build our inventory in advance of sales approval.”

Bottomley says a sales license for Supreme could be just around the corner, and thinks there are a number of recent positives.

“Although a lack of sales license continues to represent a significant overhang, we consider this update an incremental positive indicator, along with Health Canada’s recent announcement that it will be adding more resources to streamline the ACMPR application process,” the analyst says. “We believe Supreme’s current valuation is attractive ahead of this potential major near-term catalyst, and we would remain buyers at current trading levels.”

In a research update to clients today, Bottomley maintained his “Speculative Buy” rating and one-year price target of $2.10 on Supreme Pharmaceuticals, implying a return of 60.3 per cent at the time of publication.

Bottomley thinks Supreme will post EBITDA of negative $5.4-million on revenue of zero in 2017. He expects those numbers will improve to EBITDA of positive $3.8-million on a topline of $22-million the following year.