World Class Extractions

Providing Cannabis and Hemp Extraction Solutions

This profile is part of a paid investor education campaign.*

Overview

World Class Extractions Inc. (CSE:PUMP) has developed an innovative cannabis and hemp extraction process that is cost-effective, saves floor space and minimizes plant waste material. The patent-pending technology is capable of producing higher yields of crude cannabis oil from either hemp or cannabis, using the entire plant as an input. This allows processors to reduce waste while optimizing their potential yield, which can be scaled for either large or small batches.

The company offers its extraction system to licensed producers as a mobile solution that can be installed at any facility. World Class Extractions generates revenue through licensing fees and revenue sharing for its technology. The company also intends to develop, produce and distribute end-user products through its own brand.

To date, World Class Extractions has signed a collaboration and license agreement with FSD Pharma (CSE:HUGE) who will provide 5,000-square-feet of space at its facility in Cobourg, Ontario. FSD Pharma is also helping the company secure its extraction license from Health Canada.

World Class Extractions has also signed two organic hemp supply agreements with Canntab Therapeutics (CSE:PILL,OTC:CTABF,FSE:TBF1) and FSD Pharma. The second agreement spans five years and will account for C$5 million.

Company Highlights

  • The CBD extracts market to reach $2.1 billion by 2020.
  • Generates revenue through monthly fees and on-going revenue share agreements.
  • Mobile extraction system saves floor space, processing and utility fees, equipment cost and minimizes plant waste material.
  • Secured 5,000 square feet at FSD Pharma’s facility in Ontario.
  • Five-year, C$5 million supply agreement signed with FSD Pharma and Canntab.

The Market for Extracts

The CBD extracts market is expected to reach $2.1 billion by 2020. Extracts are easily consumed through a variety of delivery methods, enabling users to drink, ingest, or vaporize their product of choice. Extracts are also healthier when compared to smoking dried flower.

Extracts make up the fastest growing segment in the cannabis market in both Canada and the US. According to Health Canada, cannabis oil sales outpaced dried flower sales by 45 percent in 2018. In the US, dried cannabis flower consumption is declining in California, Colorado and Oregon. In Colorado, dried flower sales dropped from 67 percent of total dispensary sales in 2014 to 44 percent in 2018, while concentrate sales have doubled to 31 percent, according to recent reports from BDS Analytics. Similar patterns are evident in other legal US states.

A World-Class Business Model

World Class Extractions operates under a low-cost, high-margin annuity-based revenue model. The model generates revenue through four streams: mobile extraction services, in-house partnerships, end-user products and branding.

World Class Extractions provides its mobile extraction systems to licensed producers for a monthly fee or through revenue splits. The company will also design, build and operate full-scale extraction systems at its clients’ licensed facilities for an on-going revenue share. World Class Extracts is currently in the process of forming agreements with licensed producers throughout Canada.

By providing its extraction services to licensed producers, World Class Extractions allows producers to focus on their greenhouse operations. Additionally, the world-class extraction system has the potential to allow producers to recover up to 30 percent of their floor space.

World Class Extractions also intends to develop, produce and distribute its trademarked end-user products through its own brands. The company is also looking into opportunities to expand its influence outside of Canada.

World Class Extractions’ Mobile Extraction Solution

World Class Extractions has developed a single-step mobile extraction system that saves floor space, processing and utility fees, equipment cost and minimizes plant waste material. The company provides its systems to licensed cannabis and hemp producers across the globe.

The system utilizes a patent-pending technology to produce higher yields of crude cannabis faster than other extraction methods by harvesting the entire plant, including its roots, whether it’s wet or dry. Small and large plant quantities can be processed in batches or continuously.

Partnerships and Agreements

FSD Pharma and Canntab

World Class Extractions has signed multiple agreements with FSD Pharma and Canntab.

World Class Extractions has a definitive collaboration and license agreement with FSD Pharma, who will provide the company with 5,000-square-feet of space at its 620,000-square-foot facility in Cobourg, Ontario. FSD Pharma will also provide the raw cannabis needed to produce cannabis extracts. FSD Pharma also intends to help World Class Extractions obtain its extractions license from Health Canada. World Class Extractions is expected to provide FSD Pharma with royalty rights on any profits made from FSD Pharma’s cannabis.

In February 2019, World Class Extractions, FSD Pharma and Canntab signed an organic hemp supply agreement with a vendor. Under the terms of the agreement, the three companies intend to purchase approximately 1,000 kilograms of hemp. The hemp will then be processed and used in gel capsules and tablets.

Soon after signing the original agreement, World Class Extractions, FSD Pharma and Canntab signed a five-year supply and loan agreement with the same vendor. Under the terms of the agreement, the three companies can purchase up to C$5 million of the vendor’s crop for a period of five years starting in 2019. The purchase price for 2019 is expected to be C$1 million and C$500,000 will be paid as a loan to the vendor in the form of equipment which will be paid back in hemp.

“This is yet another important supply agreement for World Class as it provides us with several years of raw hemp supply that we intend to process into CBD-enriched oil and extracts at the FSD facility. World Class’ continuous flow proprietary extraction technology is perfectly suited to process large-scale hemp harvests into full spectrum oil and CBD. World Class is preparing for the next stage of growth for our company as we await approval for our CSE listing. We will have our equipment in place and expect to be processing alongside FSD and Canntab in the coming few months,” said World Class Extracts CEO Michael McCombie.

Management

Michael McCombie — CEO

Michael McCombie has spent over 15 years in the entertainment industry where he worked with award-winning rap musicians across North America. He is an experienced entrepreneur with expertise in leading marketing and early-stage companies. He has knowledge of the cannabis industry along with direct connections to entertainers with strong brand recognition.

Donal Carroll — CFO

Donal Carroll has over 15 years of corporate finance leadership and public company experience, as well as deep experience in syndicate investing both in equity and debt securities. He is currently CFO of FSD Pharma and is a director of Bird River Resources and Alkaline Springs. He holds a CPA-CMA designation as well as a Bachelor of Commerce degree from University College Dublin.


*Disclaimer: This profile is sponsored by World Class Extractions (CSE:PUMP). This profile provides information which was sourced by the Investing News Network (INN) and approved by World Class Extractions, in order to help investors learn more about the company. World Class Extractions is a client of INN. The company’s campaign fees pay for INN to create and update this profile.

INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.

The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with World Class Extractions and seek advice from a qualified investment advisor.