On April 1, 2020 World Class Extractions (PUMP.C) announced that it has signed a definitive investment agreement to acquire a chunk of Pineapple Express Delivery (PED) – a private Toronto-based company offering delivery services to the cannabis sector in Canada.
World Class Extractions (WCE) spiked 25% today – but let’s be clear – that’s a half-penny jump.
On April 29, 2019 PUMP.C was trading at .21.
Yesterday, PUMP.C closed at .02.
Today, it closed at .025 on 2 million shares traded.
In an ER room crammed with banged-up cannabis companies, WCE stands out for the viciousness of the beating it has taken.
We believe this company has a good chance to heal its broken bones and re-gain muscle mass.
- To design, build, and operate full-scale extraction and processing centres
- Create more revenue-sharing partnerships
- Develop, produce, and distribute cannabis and hemp concentrates
- Create value-added products.
- Reduce investment risk
- Leverage existing infrastructure and core commercialization that competitors lack
- Provide fee-based services including
- biomass storage
- oil production (biomass preparation and extraction technologies)
- crude oil processing and refinement (premium concentrates and isolates, including THC, CBD and full-spectrum oils)
- End-product manufacturing (formulation, hardware and packaging).
To date, WCE has announced the deployment of three cannabis processing centres – two in Canada and one in California.
WCE/PED Deal Highlights:
- WCE purchased a $500,000 secured convertible debenture from PED, convertible at the option of World-Class at $0.15 per common share of PED.
- The Convertible Debentures have a two-year term and bear interest at 12% per annum.
- WCE also purchased 8.33 million units of PED, at a price of $0.15 per Unit for aggregate gross proceeds of $1,250,000.
- The common shares of PED held by WCE represent approximately 21.55% of PED, valuing PED at about $5.8 million dollars.
- PED utilized a portion of the financing to buy 25 million shares of WCE at a price of $0.05 per share. These shares are subject to a holding period expires on August 1, 2020.
Background: on January 7, 2019 Namaste (N.V) upped its equity stake in Pineapple Express from 15% to 49%. The purchase agreement cost Namaste $3.06 million, and the plan was for Namaste’s CEO Sean Dollinger to join the Pineapple Express board of directors.
That decision was re-assessed after Sean Dollinger was terminated from his role as Namaste CEO for cause.
Six weeks ago, Mr. Dollinger began a new job as President and CEO of New Spark Media – a tech company that offers “integrated solutions to optimize user engagement.”
Namaste will be able to convert its outstanding debt (approximately $1.6M) into the same value of WCE common shares in 11 months time,” stated Namaste on April 1, 2020, “Namaste has granted WCE the option to acquire Namaste’s common shares of PED” allowing Namaste “to increase their focus on Namaste’s core business.”
Pineapple Express Delivery is targeting to become the delivery company of choice for Business-to-Consumer (B2C) and Business-to-Business (B2B) companies associated with medical and recreational cannabis, including all provincial organizations which manage cannabis distribution.
March, 2020 PED revenues increased 265% from those in January, 2020 – as the company’s operations ramp up to satisfy growing demand.
Pineapple Express Delivery has also partnered with a US organization to assist in establishing joint ventures for distribution in California, Nevada, and Oregon in the near future.
PED is in the process of submitting its evidence package to Health Canada to obtain a ‘Sale for Medical Purposes’ license for its facility located in Toronto.
If successful, this license gives PED the ability to store inventory for other LPs at its licensed facility, by way of supply agreements.
Due to stay-at-home COVID-19 protocols, PED has seen a substantial increase in volume throughout the provinces. To meet the increased demand, PED is hiring 90 additional drivers, bringing its total driving-force to 200.
“With the unfortunate outbreak of COVID-19 and the cannabis sector deemed an ‘essential’ service in Ontario, the need for a legal, proven and reliable solution for cannabis delivery in Canada is evident now more than ever,” stated Rosy Mondin, CEO of World-Class.
“We will now be able to focus 100% on the growth of PED and rapidly differentiate ourselves across the market,” stated Randy Rolph, CEO and Founder of PED, “Our goal is to provide the whole cannabis industry with an exceptional safe, secure and compliant same day and next day service both in the B2C and B2B market.”
“This investment will allow us to participate in and capture PED’s potential growth on our future financial statements” stated Mondin, “PED’s strategic partnerships enable inter-provincial deliveries across Canada, which we believe will create additional opportunities for World-Class in the future.”
– Lukas Kane
Full Disclosure: World Class Extractions is an Equity Guru marketing client.