On July 8, 2020 World Class Extractions (PUMP.C) announced that its subsidiary Pineapple Express Delivery (PED) has partnered with Spectrum Therapeutics, the medical division of Canopy Growth (WEED.T) to bring same-day delivery to medical cannabis patients in Toronto, Canada.
Pineapple Express offers specialized delivery services for the legal cannabis industry.
In Q3, 2020 Canopy’s Canadian medical cannabis business generated $14.8 million, part of its $124 million Net Revenue, with EBITDA loss of $92million.
With fear of the corona virus pandemic still high, the range of delivery services is expanding. Uber is launching a grocery delivery business in Montreal and Toronto – offering items from Walmart, Rexall and Costco.
Cannabis patients with compromised immune systems have a heightened incentive to avoid public retail spaces – like cannabis stores.
To review, three months ago, WCE announced that it had agreed to acquire a chunk of Pineapple Express Delivery (PED) – a private Toronto-based company offering delivery services to the cannabis sector in Canada.
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 that expire on August 1, 2020.
Pineapple Express Delivery’s objective is 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.
“This investment will allow us to participate in and capture PED’s potential growth on our future financial statements” stated Mondin at the time, “PED’s strategic partnerships enable inter-provincial deliveries across Canada, which we believe will create additional opportunities for World-Class in the future.”
“Patients living in select areas of the GTA from Hamilton to Scarborough can now select same-day shipping when ordering through the Spectrum Therapeutics e-commerce platform,” states WCE, “Today’s announcement builds on Pineapple Express Delivery’s existing services contract with Canopy Growth which offers same-day delivery services for Tweed and Tokyo Smoke retail stores in Manitoba and Saskatchewan.
“Spectrum Therapeutics’ medical patients can have confidence that their legal cannabis purchases will arrive at their door in a safe and timely fashion,” stated Rosy Mondin, CEO of World-Class, “Pineapple Express Delivery has taken precautionary measures to reinforce safety and hygiene procedures of workers and consumers. All drivers have been fully trained on the health procedures to keep both the driver and client safe.”
WCE’s stake in Pineapple Express is only one part of their on-going operations.
On October, 2019 WCE entered into an agreement with Canntab Therapeutics to set-up, manage and operate a cannabis and hemp extraction and processing facility, which includes the deployment of 2 BOSS CO2 Extraction and Processing Systems at Canntab’s licensed facility in Markham, Ontario
On March 3, 2020 WCE announced that its 50/50 Joint Venture (JV) partner Canntab Therapeutics received its cannabis standard processing and sales for medical purposes licences.
“Loblaws’ (L.T) big ass 1300-store pharmacy chain, Shoppers Drug Mart, announced this morning they’re now offering same day delivery of medical cannabis products in the Greater Toronto Area,” reported Equity Guru’s Chris Parry on June 16, 2020, “Delivery will be free for orders over $100, which is most orders.”
“That’s pretty incredible news,” continued Parry, “Even more incredible is who Shoppers is using to make that plan happen. Medical Cannabis by Shoppers has partnered with Pineapple Express Delivery, this shows the enthusiasm the bigger company has for the deal, and is a real shot in the arm for WCE’s credibility”.
“This expansion effort with Spectrum Therapeutics will finally satisfy the need for same-day cannabis delivery to their medical patients in the GTA,” stated Randy Rolph, CEO & Founder PED, “The entire Pineapple team is eager to provide the white-glove services that make it all possible.”
WCE has recently abandoned a variety of pre-revenue ventures, to focus on the part of the business that is generating cash.
- Expanded its services into the Ontario cities of Barrie, Ottawa and London;
- Entered into an agreement with CannaLogic Solutions to provide Canadian cannabis dispensaries a one-stop shop/a-la-carte e-commerce and logistics management software platform;
- Expanded its services to provide same-day and next-day delivery of wine, spirits and beer products from The Saskatoon Co-op, to its retail customers in Saskatoon, Warman and Martensville;
- Began operations of the PED cannabis depot in Ottawa (as of May 14, 2020);
For the month of April, 2020, PED recorded unaudited revenue totalling $819,931, gross profit of $404,084 and pre-tax net income of $188,428.
“It is very important that we continue to provide our customers with expedited access to their medical cannabis products,” stated Amanda Daley, V.P of Medical, Spectrum Therapeutics. “We’ve had excellent feedback about the delivery service that Pineapple Express Delivery has been providing to our recreational use customers, and we are excited to provide our medical patients with the same expedited delivery option.”
Full Disclosure: World Class Extraction is an Equity Guru marketing client.