Choom Holdings (CHOO.C) has partnered with Vancouver-based merchandise delivery provider ParcelPal (PKG.C) to facilitate cannabis distribution to its Canadian clients.

The agreement will function in the way an online food delivery services such as DoorDash brings meals from a restaurant to the customer, offering an alternative to provincial cannabis home-delivery services come October 17.

Uber-esque home delivery services may be a way for cannabis companies to charge private-sector prices despite a lack of brick-and-mortar locations, though this move has seen some Provincial government pushback.

Provinces like Quebec will operate government-run stores for cannabis sales, disqualifying the private sector altogether from opening dispensaries.

Cannabis companies have long bemoaned Provincial low-balling on their product in areas where recreational cannabis sales are government-run.

The partnership will consist of:

  1. Distribution: ParcelPal and Choom will jointly develop the optimal road map for distribution of both mail order and same day delivery within various provinces for adult-use cannabis.
  2. Accessibility: Using Choom’s and ParcelPal’s platform to enhance user experience and accessibility to products offered.
  3. Compliance: ParcelPal and Choom will ensure that all products will be delivered within the parameters established by all regulating bodies in Canada

ParcelPal: newest addition to the Choom Gang

Choom Holdings’ new distribution partner delivers more than cannabis. Services like Shopify utilize ParcelPal for delivery, with alcohol, clothing and food all within its purview.

ParcelPal’s Q2 financial highlights:

  • The total unaudited gross revenue for the second quarter of fiscal year 2018 is $770,022.
  • Total gross revenue up 270% in Q2 versus the year ended Q4, December 31st 2017.
  • EBITDA increase of 8.2% over the year ended Q4 December 31st, 2017.
  • Total cash on hand of $1,384,835 as at June 30, 2018 with $578,010 in accounts receivables.
  • 6 months Gross profits of $371,953, representing a gross profit margin of 27%.
  • Received $492,000 from exercising of warrants for Q1 and Q2.
  • Net loss of $754,096 in part due to non-cash related expenses of $181,558 in Share-based compensation and amortization of $134,311.

The company only recently decided to expand into the ‘green rush’ in late June when it announced a same-day delivery partnership with Birch + Fog, an online dispensary chain.

“We are redefining the world of delivery by offering a socially responsible technology solution for the cannabis industry. Choom will be able to more effectively reach new customers, engage current customers and have the competitive advantage of instant delivery.”

-Kelly Abbott, president & CEO of ParcelPal

The company currently has a market cap of CAD$25,444,000. On September 18, Tammie Asher of Simply Wall Street wrote that the company has no institutional investors.

She argues that “it’s always possible that professional investors are avoiding a company because they don’t think it’s the best place for their money. Institutional investors may not find the historic growth of the business impressive.”

Asher goes on to say that insider ownership, understood as ownership by directors or officers, can be a good thing, but the company’s share price has seen substantial volatility in the past three months.

Courtesy of

Regardless of ParcelPal’s performance, the deal provides a way for Choom Holdings and other companies with provincial supply deals to avoid selling their premium product to liquor boards for five dollars. How the respective Provinces will react to this circumvention is another story.

Full Disclosure: Choom Holdings is an Equity Guru marketing client and we own stock.

Written By:

Ethan Reyes

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