On October 12th, 2016, a Company subsidiary’s rights under a purchase contract with United Pentecostal Church of Desert Hot Springs (UPCDHS) to purchase 3.78 acres and existing building structures was terminated by UPCDHS. The subsidiary was unsuccessful in recouping any of the $1.5m in costs associated with deposits to UPCDHS towards the acquisition of the parcel as well as paid and unpaid development costs expended regarding the parcel. The subsidiary was attempting to resolve the matter in an amicable fashion with UPCDHS as well as the ultimate acquirer of the parcel that had gained the benefit of the development costs expended by the subsidiary in improving the value of the parcel as well as the conditional use permit tied to the real estate. As a result, the subsidiary was sold by Pineapple Express Inc. and the new owner has stated that they will address the matter with UPCDHS as well as the purchaser of the parcel, and also resolve any debts to vendors that went unpaid in the aftermath. “Our former subsidiary paid over $800,000 in development costs prior to the parcel being sold to a 3rd party by UPCDHS, without our knowledge. To that point, the subsidiary had also accumulated upwards of $700,000 in unpaid development costs for the parcel. A dispute exists about whether the new owner of the parcel and ultimate beneficiary of the development costs should pay for them,” stated Matthew Feinstein, CEO at Pineapple Express. “Pineapple Express has identified a more cost effective alternative so that the Company’s contracted clients and future tenants can take possession of rental spaces within the next few months.”
On February 16th, 2016, Pineapple Express announced that it had finalized an acquisition of the business and assets of THC Industries, Inc. (“THC”), the web domain www.thc.com, and the trademark THC®. THC has been an operating business and was incorporated in California since 1996, making THC one of the first internet based cannabis related businesses in the nation. On June 13th, 2016, Pineapple Express announced that it had entered into an agreement with licensing agency The Sharpe Company to develop brand strategy, positioning, and lifestyle merchandise for the Company's THC® brand. On June 20th, 2017, The Company announced that it had licensed its THC.com web domain to The Hit Channel, Inc. [THC], a media production and marketing company that has stated it has exclusive use of a proprietary social media and e-commerce technology platform. The THC.com website is slated to re-launch in Q3 2017. The Company also licensed its THC trademark to Putnam Accessory Group, Inc., (PAG) a leading accessory design, product development, production and logistics company for private label and branded fashion. They specialize in young men’s, women’s and junior’s headwear; cold weather beanies, scarves, gloves, an array of both fashion and technical bags as well as small accessory items.
On January 27th, 2016, Pineapple Express announced that its client, Nature's Treatment of Illinois ("NTI"), became one of the first licensed Medical Cannabis Dispensaries in the State of Illinois. It also announced that it had executed a management and consulting agreement with NTI. After Pineapple Express' consulting subsidiary assisted with a rigorous conditional registration approval process and inspection, NTI is now able to engage in the distribution of cannabis for medical use in Illinois and is the only medical marijuana dispensary in Illinois’ District 7. The dispensary opened for business on February 12th, 2016. Pineapple Express will provide NTI with its industry first inventory weighing, product securing, product display, and point-of-sale system dubbed the “Top-Shelf”. The Company also advises NTI regarding ongoing business activities and dispensary license renewals.
In its development of a patent-pending “Top-Shelf” Display Safe System, Pineapple Express is converting four critical components of the current dispensary model into one technologically advanced and aesthetically pleasing solution. Dispensary operators will finally have a single industry-specific technology that allows them to: safely display product, secure product in an armored safe, weigh all product in real-time, and dispense product using a fully integrated Point-of-Sale (POS) system that unlocks dozens of storage compartments as transactions occur at the POS. This proprietary technology is scheduled to become available in the third quarter of 2017.