Same day mobile delivery service business plan for Canada rolll out in 2020. See rush420.ca for details

1. RUSH CANNABIS
2019-2020 Business Plan
Confidential

2. OVERVIEW
During 2018, we market tested several cannabis businesses in the grey market in Canada.. Initially, we
decided to build an online mail-order dispensary business, but after discovering that a large percentage
of our orders were coming from local addresses, we decided to re-introduce the company as a same-day
cannabis delivery service provider.
What we found was a highly profitable, low competition business, that could be scaled out across
Canada very rapidly. We found the cannabis delivery market virtually untouched from a modern
business perspective.
After receiving numerous inquiries from parties interested in licensing our business model in cities
across Canada, we decided to adopt a franchise business model, with a fully branded suite of cannabis
products and central distribution.
The result of our efforts is ​RUSH CANNABIS

3. THE PROCESS
RUSH Cannabis​ aims to be Canada’s fastest cannabis delivery service. With customer ordering via
smartphone apps or from a PC, and delivery apps for our drivers, we are poised to become the “Uber” of
cannabis in Canada.
In the five months we operated the delivery service, we realized almost $90 K in sales revenues, with a
cost of goods of $41 K, leaving a gross profit of $45K. Revenues, on average, doubled every month. This
rapid growth nesitated the reinvestment of profits in order to meet the demand.
By October we knew that we needed to improve our internal processes if we wanted to scale out the
business nationally. So from November 2018 to March 2019, we worked diligently to improve our
software systems and to rebrand the company to ​RUSH Cannabis​. Our mission was, and still is, to
provide customers with the best possible cannabis shopping experience in Canada.

4. THE PROBLEM
The legal system in Canada has been fraught with troubles since legalization day last Oct 17th. Only a
handful of stores were actually able to open, and after only two days they ran out of stock. Even now, 6
months later, the majority of items on their menus are still out of stock.
Many stores have chosen to close down or reduced the # of employees and store hours. At the
grassroots level the legal dispensaries have become a national joke, and have driven customers back to
the grey market, which has had none of the issues the government system is facing.
Before legalization, anyone could have their cannabis delivered right to their house in as little as 15
minutes. That is the level of service the market is accustomed to. The government cannabis stores are
not allowed to deliver, nor can they sell edibles or extracts, which creates a huge problem for those who
cannot physically get to a dispensary, such as medical patients.

5. THE SOLUTION
Market research shows that Canadian cannabis consumers are demanding the same level of service they
were provided pre-legalization.
RUSH Cannabis​ will operate parallel to the legal cannabis system in Canada, which has failed to attract
the majority of consumers. We will provide what the dispensaries cannot, offering large menus filled
with top-quality products, and same-day delivery service, right to the customers door.
RUSH Cannabis ​will also offer convenient payment options such as tap ‘n’ pay technology. All payments
will be made electronically and drivers will carry no cash. To prevent fraud we will use ID verification
software which is already built into our drivers smartphone app.
Customers can browse menus and place their orders online from the convenience of their own home
using their PC or smartphone. Every order goes right to our mobile delivery drivers who can accept the
order from their smartphone using our drivers app. Each order is packaged and delivered in the fastest
time possible.

6. THE MARKET
There is a huge demand, in Canada, for same-day cannabis delivery services.
WIth the grey market providing​ 80%​ of the all the cannabis sold, the opportunity exists for a cannabis
delivery company to build out it’s brand on a national scale, and quickly capture a very large segment of
the market.
Conservatively, a ​RUSH Cannabis ​service in a medium-sized city should be able to generate $300K in
their first year. By rolling out the business across the country it is feasible that ​RUSH Cannabis ​could see
revenues of over $3 million in as little as two years time.
This will make ​RUSH Cannabis​ highly desirable as an acquisition by a larger global cannabis entity, who
will not be interested in developing market share, but rather buying it instead.

7. THE COMPETITION
In every city in Canada there are grey market delivery
services operating profitably. However, these
businesses are operating the same way they have for
20 years. They have not yet embraced modern
technology and therefore have not been able to scale
nationally.
RUSH Cannabis​ brings cannabis delivery into the
modern age. With smartphone apps and business
analysis capabilities ​RUSH Cannabis ​will be able to
rapidly replicate itself in every major city across
Canada.
By using modern marketing techniques, ​RUSH​ will be
able to ramp up in any city or town in Canada in less
than a week. Strategically placed street posters, high
ranking in local search engines, a huge social media
presence, ​RUSH​ Brand Ambassadors, and word of
mouth will escalate us to the #1 position very quickly.

8. THE MARKETING
Advertising is a key differentiator between ​RUSH Cannabis ​and the other existing smaller delivery
services. In all of Canada, we know of only one other delivery service that has even close to the
technology we do, and they only deal with the legal dispensaries, who don't have any product.
Using a multitude of marketing techniques such as hanging door knocker promos at University and
College dormitories, street signs in popular nightlife areas, and utilizing ​RUSH Brand Ambassadors
(affiliates) who will provide influence in every demographic imaginable, ​RUSH Cannabis ​will be the
delivery service most people remember at point of recall.
Drip email campaigns, heavy social media presence, Youtube video promotions, and SEO will be
deployed simultaneously in every city we enter. ​RUSH Cannabis ​will dominate Google Search as well
with a comprehensive SEO campaign. ​RUSH Cannabis ​Branded t-shirts, caps, lighters, rolling papers, etc.
will also be available for sale at public events and online as well.

9. THE PRODUCTS
RUSH Cannabis ​carries branded custom pre-rolls, edibles, exotic strains, and CBD products, from
well-known Canadian craft cannabis growers and producers. Our source has plenty of high grade
inventory and we are designing new high margin products constantly.
Pre-rolls and edibles have the highest margins and lowest costs to manufacture. We mark up these
items 3x-5x their total costs. Concentrates are next, and then flower, which sells at double our costs. As
our buying power increases, and our manufacturing processes improve and better machinery is in place
we can expect our costs to drop significantly over the next year.

10. THE POTSHOT SYSTEM
RUSH Cannabis​ runs on the ​POTSHOT Mobile Dispensary System​. This system was developed in-house
and includes website and customer/driver apps. The system was designed to make ordering cannabis
easy.
The ​POTSHOT Mobile Dispensary System​ is not only for internal use, but is designed so that it can be
licensed to other delivery services. This will also improve our ability to scale out quickly and provide a
secondary line of revenues as well. We will market the system under the ​POTSHOT Brand​ name. (See
section on POTSHOT for more details)

11. THE PLATFORM
The ​POTSHOT Mobile Dispensary System​ is based on the latest Wordpress technology and incorporates
Zapier API software, as well as Tookan Logistics software to provide us with a complete, end-to-end,
e-commerce delivery solution.
The accompanying smartphone applications are designed with Appmaker software and integrate
seamlessly within the rest of the system.
POTSHOT​ is custom-tailored to the delivery of cannabis and will operate in any location that has wireless
internet technology available. This means that the system will work anywhere in Canada with no
modifications necessary.
THE SYSTEM
Customers can view current menus online from their PC or by downloading our app from Google Play or
the Apple App Store. Customers can read reviews, check product information, and place orders for
immediate delivery, or schedule delivery for up to a week later. Once the order has been placed,
customers are sent notifications on the status of their delivery (i.e. being packaged, on it’s way, driver is
almost there), plus they can track their deliveries in real time via the smartphone app.
On the backend, all orders are managed from one central administration screen, and are dispatched
automatically to the closest driver. A central dispatch screen shows the location of every driver that has
signed onto the system in real time as well as the details of every order the driver has done or has
coming up. The system also tracks driver mileage and time between deliveries.
Upon delivery, drivers collect signatures on their smartphone as well as take pictures of customer ID for
age verification purposes. They can also take any notes they feel as being important and provide a client
rating out of 5 stars.

12. THE SECURITY
With the ​POTSHOT​, clients can choose to pay with a credit or debit card by simply tapping the mobile
terminal that each driver carries. This eliminates any cash transactions and is preferable for obvious
reasons. Once the order is delivered, clients can choose to rate their experience via an automatically
generated follow-up questionnaire.
For a driver to join they simply download the driver app, provide their driver information, and then
follow the rest of the approval process which includes a face to face meeting. Once approved they can
simply sign on as desired and accept any orders that they wish to deliver.
Drivers can choose to be paid weekly, or bi-weekly and can choose their own hours simply by signing
into the system and accepting which ever orders are available. Drivers can take several orders at a time
(up to 5) which are stored securely in portable strongboxes kept in the cars trunk.
All revenues from the sale of leasing of ​POTSHOT​ will be included in the company's total revenues, but
as we are still unsure whether we will offer it to our competition therefore we haven't included any
sales from ​POTSHOT​ ​in our projections. Similar systems license for approx $500/month and we have had
many inquiries from delivery services in both the US and Canada.
Still, it is considered an asset of the company and therefore we will value the system conservatively by
estimating the cost of it’s development at around $10,000.

13. THE FINANCIALS
RUSH Cannabis​ operated from May until December of last year in what turned out to be an excellent
run with the company almost doubling its revenues every month, for 5 straight months.
Net sales revenues for the 5-month time period were $84K with costs of goods coming in at $44K leaving
a net profit of $39K. During this period we delivered almost 800 orders with an average order amount of
$100. September was our best month with sales reaching $29k.
Salaries came in at $20k for the 5 month period with the need to increase inventory levels and improve
internal systems claiming the remaining profits to reach a break even point.
“Although break even was not the intention, several key benefits were realized as a result of the rapid
growth of the company. We now have a far superior delivery system in place than when we started. We
also have a client database with detailed buyer information on over 3000 local and national regular
cannabis consumers, and a well-documented set of internal procedures and policies that can be used to
roll out the company in every new market we enter.”
RUSH MAGAZINE AD

14. 2018 OVERVIEW
Date Number of orders Net Sales amount Cost of Goods Sold Profit amount
MAY 61 3,625.00 614.00 3,011.00
JUNE 58 4,456.00 1,178.04 3,277.96
JULY 113 10,692.63 6,252.20 4,440.43
AUG 147 16,468.00 10,434.42 6,033.58
SEPT 216 28,233.00 17,188.00 11,045.00
OCT 90 9,168.97 3,264.02 5,904.95
NOV 90 10,361.00 4,933.42 5,427.58
DEC 7 667.00 313.00 354.00
TOTALS 782 83,671.60 44,177.10 39,494.50

15. CURRENT ASSETS
QUANTITY ITEM VALUE
2 Acer Aspire Laptops $600
1 Canon Printer $100
2 LG G6 Cell Phones $250
1 All-American Master Can Sealer $700
87 Tin Cans w/Lids $87
1 Tabletop Poly Bag Impulse Sealer $250
100 Mylar Bags $100
150 Shipping Boxes $150
1 Cold Press Oil Extrusion Machine $500
2 Mobile 1 hr Fire Rated Product Cases $200
2 Mobile Payment Terminals $200
1 Cannon Landmark 6.7 Cu Ft Safe, 60 min Fire Protection $600
1 Cone Filling Machine $300
1 Pot Shot Delivery System $10,000
Total Current Assets $14037

16. 2018 PROFIT/LOSS

17. 2019 SALES FORECAST (July - Dec)
Note: Even after paying off the loan amount, increasing our inventory, the company should still stand to make over $50K in profits in 2019 still.
The profits will be dispersed as per the owner/investor agreement.

18. 2020 SALES FORECAST
Note: This chart assumes 4 RUSH locations in operation, each doing about $50k per month. These are conservative numbers and the quantity of
locations could easily be much higher, as could the monthly sales.

19. 2020-2024 FORECAST
This is the sales projections In the event that RUSH Cannabis is not purchased before 2024.
NOTE: This chart includes a $60K monthly draw by both owners, and still shows decent yearly profits of $245K to be dispersed as per the existing
owner/investor agreement. Yearly income for owners would be approx $420K per owner.

20. THE EXIT STRATEGY
We expect ​RUSH Cannabis​ to be purchased sometime in the 2020-2022 time period. When this buyout
occurs we expect the purchase price to be the Net Profit Per Year times a multiple of 5, which equals the
Estimated Total Profits should the business not sell and continued to run until 2024. This means the sell
price will be at the minimum $1,250,000.
PRECEDENCE FOR COMPANY VALUATION
Taking the case of Pineapple Express as precedence, the sell amount could be much, much higher.
Pineapple Express is another grey-market delivery company that has not even made a delivery yet, but
has a delivery system similar to ​POTSHOT.​ They were recently purchased by Namaste (a global
conglomerate) for $3M dollars. Read ​Namaste Completes Share Acquisition of Pineapple Express
Delivery​ for details on the acquisition.
Taking the purchase of Pineapple Express into consideration, a buyout scenario seems highly likely. This
would provide owners/investors with an outsized return on investment.