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Xtraction Services: Invest in a Pre-Public Turnkey Extraction Services Provider

Ryan Allway

December 17th, 2018

Exclusive, News, Top News

The global cannabis industry is projected to reach $146 billion by 2025, according to Grand View Research, representing a 34.6 percent compound annual growth rate. The legalization of medical and recreational cannabis across a growing number of jurisdictions has increased demand for dried cannabis, but if early legalization trends are reliable, the market could experience a radical shift towards cannabis extracts over the coming years.

In this article, we will take a look at Xtraction Services Inc., a specialty financing company focused on extraction, related services, and lab equipment, enabling clients entree into the fastest growing segment of the cannabis market. The company plans to go public next year, but accredited investors have an opportunity to invest in a pre-public financing.

Click Here: Learn how to invest in Xtraction Services as an Accredited Investor

Rapidly Growing Industry

Cannabis extracts are the fastest growing segment of the legal cannabis industry. In fact, many experts believe that extract-based product sales will overtake cannabis flower sales over the next two years. Cannabis Business Times projects that extracts will account for 90 percent of the $100 billion global cannabis industry over the coming decade. Traditional cultivators risk being left behind if they ignore these trends.

There are several key challenges to developing cannabis extracts:

  • New Industry – Cannabis has only recently been legalized, which means there’s a shortage of talent and operating procedures for creating extracts. Many companies rely on a single expert and don’t have solid operational procedures in place.
  • High Cost – Cannabis companies have had some trouble raising capital outside of the public markets. At the same time, the process of raising capital is time consuming and diluting to existing shareholders.
  • Limited Equipment – Most equipment is repurposed from other commercial operations, and there are few industrial-scale options that adhere to any standards. Manufacturer incentives aren’t necessarily aligned with operators.

Many large cannabis companies have raised capital to build their own in-house extraction facilities while hiring top scientists and engineers. Meanwhile, smaller cannabis companies have been forced to work with sub-par equipment or ink deals with cannabis laboratories, which means that they’re relying on others to do the bulk of the extraction. The good news is that there are some companies that aim to bridge the divide.

Innovative, Turnkey Model

Xtraction Services provides mission critical equipment, support services, and expertise while reducing the up-front and lifetime costs of equipment ownership. Since it doesn’t touch the cannabis plant, the company’s equipment and services can be deployed around the world without limitation. The company aims to become the picks and shovels of the nascent cannabis extracts business.

The company provides financing for on-demand equipment, removing the need for customers to raise dilutive equity or expensive debt. Customers pay a monthly royalty or lease payment that aligns everyone’s business goals to maximize production. Customers are offered a trade-in option at the end of finance term so they can trade in used equipment toward new innovative technology from a variety of manufacturers, and can be confident that they will not be stuck with older equipment.

In addition to these operational benefits, the company’s shareholders benefit from a diverse recurring revenue mix and high internal rates of return. The company’s revenue consists of royalty/lease revenue, warranty/service revenue, and equipment sales revenue, while its mixed customer base insulates it from any single customer issue. 

Investment Opportunity

Xtraction Services started raising a Series C financing in September, which consists of convertible debentures that are already oversubscribed. The two-year notes have a conversion right that prices equity at a 15 percent discount to the going-public round, as well as a 10 percent coupon in the meantime. Accredited investors have an opportunity to purchase these securities ahead of the closing of the going-public round.

Click Here: Learn how to invest in Xtraction Services as an Accredited Investor

Disclaimer 

The above article is sponsored content. Emerging Growth LLC, which owns CannabisFN.com and CFN Media, has been hired to create awareness. Please follow the link below to view our full disclosure outlining our compensation: https://cannabisfn.com/legal-disclaimer/

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

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About CFN Media Group

CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.

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