PAO Group, Inc.’s (USOTC: PAOG) stock has been trading in sympathy with the broader OTC markets…lower. But a green session on Friday, followed by a roughly 37% move higher on Monday, shows that when investors embrace risk back into their portfolios, PAOG can be a standout performer.
In fact, while its 2-day performance was strong, those gains appear to link to recent updates that legitimize the bullishness. There, PAOG has highlighted plans that are already in motion designed to accelerate revenue growth in the coming quarters. Of note, PAOG is already a revenue-generating company and expects that milestone to continue during the next six quarters.
Better still, as a revenue-generating company, PAOG is not only performing better than hundreds of nano-cap peers but also may be doing as well as some CBD-focused mid-caps that are yet to get a product to market. And while PAOG’s $300,000 in revenues from its cannabis cultivation subsidiary have sent share prices higher, more exponential gains can come when PAOG proves to shareholders that it can leverage its revenues to capitalize on emerging opportunities in the CBD and nutraceuticals markets. Several deals are helping to make that happen.
Its RespRx acquisition could lead the growth.
Partnerships, Acquisitions, And Patented Assets Set Up 2021
Shareholders sent shares higher in 2020 after PAOG announced its acquisition of RespRx. That asset enables PAOG to accelerate its initiatives to develop CBD alternatives to treat patients with symptoms associated with Chronic Obstructive Pulmonary Disorder (COPD). But, while investors wanted rapid program development, the Trump administration slowed things down for the entire sector. CBD-based therapeutics was simply not high on his political agenda.
Thus, when markets rotated, and CBD-based therapeutics were less focused on, the sector’s smaller stocks took significant hits to their valuations. That was terrible news for PAOG. However, the excellent news now is that PAOG is now better positioned to advance its strategic initiatives compared to 2020.
Undoubtedly, when PAOG acquired RespRx from Kali-Extracts, it was viewed as a potentially transformative acquisition. That’s still the case. And while the pace of development has slowed until now, RespRx remains a tremendous asset that can be commercialized to target multiple indications where a better and safer standard of care is needed.
Still, it’s important to remember that developing treatments for multiple indications is costly and timely. Investors in “big pharma” wait years after a drug trial is announced to get results, and many times, even after several years of waiting, those drug trials can’t advance out of a phase 2 trial. The same patience needs to be afforded to PAOG. Investors should also keep in mind RespRx, and its patented cannabis extraction process could be money-makers without the need to bring a single product to market. In fact, comments made by the inventor of the extraction process said that his method was professionally recognized as producing better quality CBD extracts than GW Pharma (GWPH), a leading company that was purchased by Jazz Pharma for $7.2 billion last February. That quality could lead to licensing, partnerships, and collaborative agreements.
And GW Pharma, by the way, is an example of a company that spent years going against the grain, had big pharma gunning for them, and still proved that CBD-based therapeutics could play a vital role in treating a variety of patient conditions. In turn, one of the “big pharma” that may have criticized the science instead embraced it with a multi-billion dollar purchase.
Better still, PAOG is entering 2021 with multiple shots on goal. In fact, beyond its COPD pharmaceutical initiatives, PAOG is advancing a nutraceutical product line that they believe will compete effectively against already marketed, higher-priced brands.
Nutraceuticals Can Be A Game-Changer
There, PAOG announced engaging with the Puerto Rico Consortium for Clinical Investigation (PRCCI) to assist with developing its proprietary Cannabidiol (CBD) extract into a nutraceutical product. The agreement adds credibility and sector expertise to the initiative and can help expedite approval if the two successfully develop an effective CBD-based treatment to target COPD’s debilitating effects.
The goal is to develop CBD-based treatments to replace addictive and often harmful prescription drugs. And as CBD-based therapeutics become more mainstream, the company hopes to receive fast-track review and approval from regulatory agencies acceptance of CBD and cannabinoid compounds as viable and effective treatment options.
Other deals are in place to push its CBD nutraceutical operations. In a multimedia presentation, PAOG detailed its CBD nutraceutical development expansion plans and explained how strategic engagements with Puration, Inc. (USOTC: PURA), North American Cannabis Holdings, Inc. (USOTC: USMJ), and Alkame Holdings, Inc. (USOTC: ALKM) can accelerate growth in multiple directions.
In fact, the breadth of news is keeping investors interested in the stock, and despite recent sector-wide weakness, PAOG has been able to hold its roughly 300% share price increase since the start of the year.
The trend higher is likely to continue when risk makes its way back into the markets. At current share prices, the opportunity may be significant.
Video Link: https://www.youtube.com/embed/p48PfDlIABQ
Partnerships And New Revenues
Perhaps the not-so-hidden gem in all of the discussion is that PAO Group is doing what most of its peers are not doing…generating revenues. And that metric puts the company in an enviable position to capitalize on new opportunities and develop its existing pipeline.
Also, a deal with Alkame Holdings Inc. (OTC PINK: ALKM) to develop and distribute its CBD nutraceuticals adds depth to its commercialization plans and strengthens the operations’ logistical side. In other words, PAOG has a distribution infrastructure already in place that can streamline costs and accelerate commercialization later. Another deal with North American Cannabis Holdings, Inc. (OTC Pink: USMJ), which is expected to take on the distributor’s role, completes the distribution circle.
The message that PAOG makes to its investors is to respect the time needed for development. CBD-based medicine is a new science despite the numerous headlines, and its popularity and billion-dollar market opportunities send a clear message- CBD-based therapeutics are the real deal.
Allow 2021 To Develop
Thus, PAOG has the same opportunities as other development-stage companies. Moreover, they have a crucial asset in RespRx and are generating revenue to help push programs forward. Also noteworthy is that PAOG is making strategic deals with industry companies that can expedite program development, add to its existing revenues stream, and position it to leverage its patented CBD extraction process to capitalize on substantial market opportunities.
Therefore, given time, PAOG can capitalize on its assets and transform itself from the development-stage to a commercialization-stage company. And in 99.99% of situations, that transformation leads to exponential returns. Sometimes, it just takes time.
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