On February 6, 2020 World Class Extractions (PUMP.C) released a 2,400-word communique to shareholders and stakeholders, reviewing its 2019 achieved milestones and declaring its ambitions for 2020 and beyond.
The letter was penned by World Class Extractions (WCE) CEO Rosy Mondin.
Last December, Equity Guru principal Chris Parry toured the WCE extractor factory in BC’s lower mainland.
“Mondin’s team is building out BOSS extraction units for sale, and BEAST extraction units for her own company’s use,” reported Parry, “What once was a business model aiming at putting one of their machines in every LP is now a company aiming to take all the cheap weed those companies would like extracted, and doing it themselves, in a return for a piece of the action.”
There are plans to build a facility that can take anyone’s hemp or cannabis, extract it quickly, and even clean up extraction materials that are low quality or dirty. That’s a novel play – Chris Parry
“We believe extraction represents a large – if not the largest – growth sector in the industry,” states Mondin, “Extraction is the fundamental first step to produce these value-added cannabis/hemp-derivative products – and World-Class is poised to capitalize on this shifting consumer preference.”
The merger of World-Class Extractions Inc. and Quadron Cannatech Corporation in 2019 was a significant milestone, as the combination of capital, experience, and technology has laid the foundation for our plans in 2020 and beyond.
We have been working diligently on integrating the two companies,” stated Mondin, “this includes better alignment of our key talent along with recruiting new talent to support our growing company.”
Advantages of concentrates vs. flower
- Superior supply-chain logistics
- Longer shelf-life
- Easier to test analytically
- More convenient to transport
- Diversity of final products
- Including tinctures, capsules, edibles, creams, bath bombs, and beverages
WCE is anticipating “price compression for cannabis and hemp biomass and their extracts,” believing that the “quality and efficiency of cannabinoid extraction will be paramount”.
The lack of processing capacity in the U.S. has led to a bloated inventory of hemp biomass, which will deteriorate rapidly if not processed or extracted.
To address this market opportunity, World-Class has entered into a binding letter agreement with Nutralife Holdings, to establish a JV to develop, manage and operate a hemp extraction and processing facility in Imperial County, California.
Canada is also experiencing bottlenecks of cannabis and hemp inventory, exacerbated by a retail sector that is choked with regulation. The Health Canada chart below illustrates the severity of this problem.
“Without extraction, cultivators are at risk of watching their inventory degrade and spoil,” stated Mondin, “To unlock the value of this biomass and create shelf-stable products, extraction and processing is necessary.”
World-Class 2020 objectives:
- 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.
California has mature supply chains and less regulation on extracted product than Canada.
WCE is in negotiation to expand into the European market. Business operations will include extraction and processing of hemp and cannabis (as jurisdictions allow) and branded product manufacturing.
“World-Class has filed, and will continue to file, patent applications for its proprietary systems in every major industrialized country of economic significance,” stated Mondin, WCE can “process incredibly large volumes of cannabis and hemp plant material, producing extracts that have greater concentrations of target cannabinoids and possess minimal contaminants.
WCE invested in Alkaline Springs, a company that intends to launch a brand of cannabis and hemp-infused beverages on a white label basis in markets outside of Canada.
“We are targeting a multi-billion dollar high-growth market characterized by considerable barriers to entry and increased outsourcing need,” stated Mondin, “World-Class expects to generate rich margins and significant returns on capital, ultimately unlocking shareholder value”.
Parry – who doesn’t suffer fools gladly – thinks Mondin is the jam.
“Mondin is an advisory board member of the Canadian Association of Medical Dispensaries,” stated Parry way back in February, 2017, “She’s who Jodie Emery would be if Jodie Emery was A) not relentlessly self-obsessed, B) not married to a jackass, and C) doing everything right for the industry at large, instead of herself.”
By mid-morning, February 6, 2020, World Class Extraction had traded 1.2 million shares, the share price was flat at .04 with a market cap of $24 million.
Full Disclosure: World Class Extraction is an Equity Guru marketing client.
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