Although the ancillary cannabis opportunity is significant, it is often overlooked by the market due to the increased interest in North American based cannabis producers or retail companies.
During the last year, we have seen a significant increase in the number of Canadian Licensed Producers (LPs) and United States multi-state-operators (MSOs). Many of these LPs and MSOs have multi-billion-dollar valuations and we are of the opinion that most of the easy money has been made.
The increased interest in LPs and MSOs has impacted publicly traded ancillary cannabis companies and we have noticed that these companies have been trading lower on lighter-than-normal volume. We believe that this impact is transitory and continue to monitor the ancillary cannabis opportunities.
One ancillary cannabis company that we have been following is ParcelPal Technology Inc. (PKG.CN) (PTNYF) and we believe that this is an opportunity to be watching. During the last quarter, the shares have been under considerable pressure and we want to provide an update on this opportunity.
Growing Through Strategic Relationships
Last month, ParcelPal reported a major milestone and started to delivery cannabis products in the province of Saskatchewan as part of its relationship with Kiaro. This represents a strategic relationship for ParcelPal and we are favorable on the previously announced cannabis distribution agreement between the two companies from March.
Kiaro is a Vancouver based cannabis retailer and we will monitor how these relationships adds value on a go-forward basis. The companies reported to have completed an additional cannabis distribution agreement for the delivery of cannabis products through Kiaro’s physical and digital retail channels. The initiative will consist of:
- Distribution: The companies will jointly develop an optimal roadmap for the distribution of adult use cannabis
- Accessibility: The companies will integrate their technology platform to enhance the user experience and improve product accessibility
- Compliance: All cannabis products delivered will be within parameters set by all the relevant regulatory bodies.
- Safety: Both companies are dedicated to socially responsible cannabis retail through its cannabis delivery service
Kairo represents ParcelPal’s second strategic partnership and previously announced a similar agreement with Choom Holdings, Inc. (CHOO.CN) (CHOOF), a leading cannabis retailer in Canada. We are bullish on the growth prospects associated with this relationship and believe that each company adds strategic capabilities to the partnership.
ParcelPal wants to be the Uber of cannabis for Canada and believes that these strategic relationships will enhance its national cannabis distribution and delivery strategy. We are very excited about the Choom relationship due to it having a strategic partnership with Aurora Cannabis (ACB.TO) (ACB), whereby Aurora owns a significant portion of Choom and we are favorable on the impact this could have on ParcelPal.
Another relationship that we are excited by is the one with Amazon.com (AMZN). This relationship has already proven to be a major value driver and the company has a contract for Vancouver, British Columbia and Everett, Washington and has expanded its regions within the current cities significantly. We are monitoring how ParcelPal continues expand on its relationship with Amazon and this is something to watch.
An Emerging Opportunity to be Watching
ParcelPal is a company that has significant catalysts for growth, and it is in the final stages of launching medical and recreational cannabis delivery platform with Choom and Kiaro. This delivery initiative is expected to be a massive growth driver and is expected to open new markets and drive additional users to the platform.
Although the cannabis delivery company has significantly improved its growth prospects, the shares have been under considerable pressure and have been trending lower. If you look at a company like Eaze, which is a cannabis delivery service in the United States, you will see that it has a massive valuation. We believe that the market underappreciates ParcelPal’s growth prospects and this is an opportunity we are watching.
ParcelPal represents an emerging ancillary cannabis company and we are excited about it due to the relationships it has in place, the valuation, the growth prospects, and the management team. The company is well on their way to becoming a leading on-demand delivery business in Canada and its go forward plan includes: continuing to expand their technology, completing more symbiotic join ventures, and expanding the platform into new consumer verticals while rapidly expanding their service across North America.
To learn more about this emerging ancillary cannabis opportunity, please send an email to email@example.com.
Pursuant to an agreement between StoneBridge Partners LLC and ParcelParl Inc. we have been hired for a period of 180 days beginning December 11, 2018 and ending June 11, 2019 to publicly disseminate information about (PKG) including on the Website and other media including Facebook and Twitter. We are being paid $6,500 per month for marketing services. We may buy or sell additional shares of (PKG) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.
Published at Mon, 20 May 2019 12:04:27 +0000