LOS ANGELES, Oct. 13, 2015 (GLOBE NEWSWIRE) -- Pineapple Express, Inc. (OTC Pink:PNPL) (the "Company"), a Wyoming corporation engaged in cannabis industry consulting, (formerly known as Globestar Industries (OTC Pink:GSTI) today issued the following shareholder update letter from Matthew Feinstein, CEO and Chairman.
To our valued shareholders:
First and foremost, I wish to thank you for your continued support. As CEO of Pineapple Express, I am pleased to provide an update on the recent milestones we have achieved in our first full quarter of operations as Pineapple Express, and discuss our vision for the Company’s future. I wish to take this opportunity to recount our recent corporate actions and business activities.
Pineapple Express has achieved substantive progress as we implement plans to create and capture shareholder value. To that end, we are pursuing an expansive growth and rollout program that leverages our integrated platform while capitalizing on our diverse opportunities across the United States. We expect the next six months to mark a major inflection point in our growth. To be sure, our best days are before us as we have amassed the right mix of talent and expertise to realize what we believe will be a promising future.
By way of review, Pineapple Express provides expert consulting, product licensing, and capital to help distinguish and grow new and existing businesses within the cannabis industry. In supplying industry specific technologies and ancillary support services, the Company provides a turnkey operating environment to canna-business managers. Pineapple Express is home to some of the most experienced and well-connected minds in the business, immediately placing its investors and clients at the forefront of an explosive industry. In fact, according to ArcView Market Research in their report “The State of Legal Marijuana Markets 3rd Edition, 2015”, the cannabis industry was the fastest growing industry in all of the U.S. in 2014.
Pineapple Express develops, enhances, and/or expands existing and newly formed infrastructures. Our business strategy is to quickly develop recurring and easily replicable revenue sources, and avoid large upfront investments in infrastructure, escalating payroll costs associated with expansion, and the years of initial losses often typical of start- up companies.
We believe that our unique business model, exclusive proprietary technology, expertise of our employees and consultants and our key industry contacts represent strong competitive advantages for Pineapple Express. We are pursuing a business model that we strongly believe positions us to capitalize on the evolving dynamics of the high-growth cannabis market space both before and after cannabis becomes federally legal. Currently, we are targeting opportunities in two distinct, yet symbiotic and complimentary markets, namely, the Licensed Medicinal Dispensary and Adult Use Cannabis Retail Market and the Licensed Cultivation, or Growers Market. We specifically provide capital to our canna-business clientele in these markets and we also purchase and lease real properties to these canna-businesses in states where canna-businesses are legal. In all cases, we offer consulting and technology to develop, enhance and/or expand existing and newly formed infrastructures and newly formed canna-businesses and we also offer high visibility and strongly branded product licensing. When cannabis becomes federally legal, we have provisions in our agreements with certain of our canna-business clients that allow us to buy their businesses and re-brand them as Pineapple Express locations, thus leveraging the strong brand appeal of our name.
This past quarter, the Company’s common stock traded under new management on the OTC Pink Marketplace. We have made significant strides in shareholder value creation through our significant achievements in branding, management team and staff additions, business development, real property acquisition and the introduction of our proprietary “Top Shelf” display safe system.
RECENT ANNOUNCEMENTS AND MILESTONES
I am excited to report on our recent developments and the milestones we have achieved. Below is a summary of our recent announcements:
- On August 25, 2015 the Company announced its share exchange with Better Business Consultants, Inc. (dba MJ Business Consultants) and rebranding as Pineapple Express, Inc.
- On August 26, 2015 the Company announced the appointment of Christopher Plummer as Chief Compliance Officer and Director. Mr. Plummer has over 16 years of regulatory compliance experience and his appointment shows our commitment to corporate compliance now and for the Company’s expected future transition into a fully reporting company. The Company also announced key legal and accounting advisory engagements and intends to engage a new PCAOB registered public accounting firm in the near future.
- On September 1, 2015 the Company announced that all employees, contractors, directors, officers, affiliates, and consultants for the company are subject to lockup agreements restricting them from selling any of their shares in the public markets for 2 years. This helps convey the company’s priorities to the public markets and sets us apart from other publicly traded companies that are currently operating in and servicing the cannabis industry.
- On September 8, 2015 the Company announced the signing of its very first property purchase and subsequent lease to a canna-business tenant.
- On September 21, 2015 the Company announced its formal name change to Pineapple Express, Inc. and new ticker symbol: PNPL.
- On September 24, 2015 the Company announced it retained CorProminence, LLC to provide investors relations and shareholder communications services.
- On September 28, 2015 I conducted an audio interview about the Company with SmallCap Voice that can be heard by clicking here.
- On October 6, 2015 the Company announced its development of a patent-pending system for use in cannabis dispensaries called the ”Top-Shelf” display safe system that secures and weighs a dispensary’s cannabis inventory in real-time before and after dispensing transactions through an integrated point-of-sale system operated by dispensary employees.
BRANDING
We believe the name “Pineapple Express” is extremely valuable and has an inherent value from which we can benefit. In our opinion, it will prove to be one of our best assets in establishing a lasting presence in the market and in the consumer’s mind that will attract and retain customers.
PROPRIETARY PRODUCT DEVELOPMENT
Among our most notable achievements to date is our acquisition of proprietary technology, the patent-pending Top-Shelf display safe system. The Top Shelf display safe system was exclusively invented and developed for the Company by co-founder and technology consultant Vincent Mehdizadeh. The Top Shelf Display Safe System converts four critical components of the current dispensary model and combines them into a single, technologically advanced and stylish unit. The system allows for a dispensary operator to safely and attractively display cannabis products, secure all products in an armored exterior safe with interior locked compartments, weigh all products in real-time using dozens of electronic scales housed in the locked compartments within the unit, transmit real-time inventory data to an integrated point-of-sale and inventory management system, and authenticate transactions to consumers for legal compliance and record-keeping purposes. The Company believes the Top-Shelf system could be the most powerful management tool available to cannabis dispensaries today. The system will also have the ability to work in concert with popular POS systems currently in use by dispensaries. The Company is targeting Q1 2016 for commencement of product marketing and sales.
INITIAL STRATEGY EXECUTION:
We are especially excited to have executed our first property purchase and subsequent sublease to a canna-business tenant in California We are scheduled to receive rental income of $49,000 per month in year one, $98,000 per month in year two, and $122,500 in years three through ten from the subtenant, although actual rent received may vary and payment cannot be guaranteed.
The Company is also in late stage discussions and negotiations with several other parties to advance the execution of the model which include:
A proposed acquisition of a popular clothing brand and website. This potential acquisition includes a valuable URL address, a branded clothing line, a clothing distribution facility, and the rights to sell clothing, namely T-shirts, hats, beanies, pants, shorts, baseball jerseys, jackets, sweatshirts, polo shirts, and sweat pants displaying a popular industry specific trademarked name and logo.
Proposed relationship with Nature's Treatment of Illinois, Inc. (“NTI”), a dispensary located in Milan, Illinois in which management has a founding interest. NTI has been awarded one of the 60 dispensary licenses issued in Illinois. Construction has just started on the freestanding dispensary operation that is expected to open in early 2016.
Proposed investment in dispensary. The Company recently entered into a non-binding term sheet and is in the process of executing a definitive agreement to invest, expand, and co-brand an existing licensed dispensary in Vallejo, California, which has been in operation since 2010. The term sheet proposes a $600,000 investment and management support of the dispensary in exchange for 18% of gross revenue generated from the dispensary paid as a royalty and payment of consulting fees on an ongoing basis. The term sheet also provides for a buy-out clause of three times earnings for the business at the Company’s option after three years and if recreational legislation is passed in California.
Management is strongly optimistic that it has positioned the Company to capitalize on the high growth segments of the burgeoning cannabis markets. The landscape for growth is firmly rooted in the advancing market dynamics, industry trends and evolving federal and state drug policies. ArcView Market Research recently reported in their “The State of Legal Marijuana Markets 3rd Edition, 2015” research report that “…five states now boast markets greater than $100 million, while one additional state posted sales above the $50 million mark. With innovation occurring in delivery systems, healthier and easier alternative delivery formats are rapidly gaining market share. Opportunities are growing for multistate licensing with strong national cannabis brands finding ways to emerge in a state-segmented market. There are also very positive developments occurring regarding Quality Assurance and Quality Control and Product Testing with product potency and contaminant testing requirements emerging to ensure consumer safety and new laboratories emerging to support these needs. Cannabis brands are no longer hiding in the shadows and the branding bar is rising fast. The landscape of cultivation is evolving as well as licensed cultivation facilities are growing in size, creating opportunities and challenges to meeting their acreage needs and the fast growing demand for legal cannabis.”
CAPITAL STRUCTURE, REPORTING/UPLISTING PLANS
Pineapple Express currently has 53.7 million shares outstanding as of 9/30/15. Our authorized capital stock consists of 500 million shares of common stock and 20 million shares of preferred stock, with 5 million shares of preferred stock designated as Series A Convertible Preferred Stock, of which 1.5 million shares are outstanding.
We intend to take all the steps necessary to become a fully reporting company in 2016 and potentially uplist to a national stock exchange in the years that follow. Our most recent interim report filed with the OTC Markets on September 16, 2015 can be found here.
NEW WEBSITE
We are delighted to report that we have secured www.pineappleexpress.com as our main corporate website domain and we will be launching our new corporate website on November 1, 2015. In addition to a comprehensive description of our products and services and related content, our website will provide links to our financial statements, corporate governance policies, stock price and share information, complete press release coverage, relevant corporate filings, media, events calendar and a subscriber option to receive automatic email alerts upon the issuance of future press releases and filings. We will be releasing further information regarding the launch of the new website in the coming weeks.
On behalf of the entire Pineapple Express management team, I would like to again thank you for your continued support. In closing, we strongly believe that we have the talent, expertise and strategic approach necessary to create the future we envision and we look forward to reporting on our excellent progress as we continue to execute on our ambitious plans.
Sincerely,
Matthew Feinstein, CEO and Chairman, Pineapple Express Inc.
About Pineapple Express Inc.
The Company is based in Los Angeles, California. Through our operating subsidiary Better Business Consultants, Inc. DBA MJ Business Consultants, we provide capital to our canna-business clientele, lease real properties to those canna-businesses, and provide consulting and technology to develop, enhance, or expand existing and newly formed infrastructures. We intend to create a nationally branded chain of cannabis retail stores under the "Pineapple Express" name as soon as federal laws allow, which will be supported by anticipated Company-owned cultivation and processing facilities, and will feature products from anticipated Company-owned manufacturers. As long as cannabis remains federally illegal our operations will be limited to consulting, product licensing, leasing to and investing in existing and new canna-businesses, selling industry specific technology, and providing ancillary support services. We believe that our competitive advantages include our wealth of experience, business model, exclusive proprietary technology, and key industry contacts in an industry that is foreign to most. It is our expectation that these factors will set us apart from most of our competitors.
Forward-Looking Statements:
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Statements that are not a description of historical facts constitute forward-looking statements and may often, but not always, be identified by the use of such words as "expects", "anticipates", "intends", "estimates", "plans", "potential", "possible", "probable", "believes", "seeks", "may", "will", "should", "could" or the negative of such terms or other similar expressions. Actual results may differ materially from those set forth in this release due to the risks and uncertainties inherent in the Company's business, including that we have a limited operating history, are dependent upon key personnel whose loss may adversely impact our business, and some of our business activities and the business activities of some of our customers and counterparties, while believed to be compliant with applicable state law, may be illegal under federal law because they violate the Federal Controlled Substances Act. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement and the Company undertakes no obligation to revise or update this release to reflect events or circumstances after the date hereof.