Puration Inc. (OTC: PURA) shares are in a bull market. Since the start of 2021, PURA shares are higher by 244%, following a series of deals designed to accelerate growth in the current and coming quarters. Growing revenues, its exclusive license to a patented cannabis extraction process, and a recent 5% capital investment into Alkame Holdings, Inc. also contribute to what could be a breakout year for the company. Since the start of February, shares are surging by more than 122%, with heavy volume supporting the move higher.
Investors became bullish toward the end of January when PURA guided that sales of its EVERx CBD Sports Water product will surpass $2 million in sales in 2020. Those results follow an impressive 2019, when sales also eclipsed the $2 million level. Moreover, in an update from Puration, they noted that at the end of its Q3 2020, sales of EVERx had already reached $1.9 million despite the consumer and wholesale market disruptions caused by the ongoing COVID-19 pandemic. Thus, even against a sharp pandemic-driven slowdown, the 2020 totals could breach last year’s totals. This year, according to PURA, is expected to be better.
PURA also guided that the pandemic’s headwinds may be starting to ease, which they expect will help accelerate EVERx sales growth as early as the first quarter of this year. Moreover, PURA management was quick to point out that while EVERx may be its flagship product, it is just one part of a growing portfolio of products and interests that PURA plans to exploit this year.
A recently announced plan to break ground on a 70-acre property in Farmersville, Texas, may be the first step to maximizing value from several strategic initiatives.
Video Link: https://www.youtube.com/embed/X6kngsIey8A
Several Announcements Usher In New Market Opportunities
Last week, Puration, Inc. announced finalizing plans to break ground on its recently acquired 70-acre property in Farmersville, Texas. The project, expected to start this summer, will become the primary base for Puration operations. And more than just a home office, it’s campus is being designed to maximize multiple opportunities and streamline revenues.
Specifically, the facility is designed to not only effectuate an expansion of market presence for its current EVERx business but to also help launch a new hemp lifestyle brand business focused on increasing market awareness and acceptance around industrial uses of hemp. To jump-start that venture, PURA is already building partnerships with hemp-related industry companies to advance individual pilot projects that show the broad utility of hemp for multiple markets. To those that aren’t aware, in 2020, the industrial hemp market is a $5.33 billion opportunity. However, the expectation is for that market to increase to $15.26 billion by 2027. Thus, PURA’s focus on this lucrative market is timely. It also diversifies their revenue-generating assets. Puration has said to stay tuned for updates.
Another deal catching the headlines also came last week when PURA and Alkame Holdings Inc. (USOTC: ALKM) announced plans to produce and test market a CBD infused liquid sugar, a CBD infused pet food supplement, and a CBD sexual wellness flavored lubricant. Alkame, who already works with PURA to support EVERx bottling and distribution, also sold a 5% interest of its company to PURA, who can benefit from the business association as well as from its investment. Incidentally, shares of ALKM jumped more than 27% after the announcement, which boosts the balance sheet at PURA.
Two other deals came together to create even more value. In February, PURA entered into a partnership with PAO Group, Inc. (USTOC: PAOG) to build an indoor hemp cultivation operation to develop a proprietary, pharmaceutical-grade hemp cultivar. The alliance can utilize the strength of each company’s specific expertise and create value by leveraging strategic opportunities to accelerate growth. As was the case for ALKM, shares in PAO Group also surged on the partnership news.
Finally, in what is already a busy February, PURA announced entering into strategic negotiations with North American Cannabis Holdings, Inc. (USOTC: USMJ) in a deal that can strengthen PURA’s interests in the CBD sector. USMJ currently operates a cannabis e-commerce business supported by an already integrated cannabis products logistics operation.
The deal with USMJ is expected to contribute to PURA’s hemp lifestyle business initiative. It also allows PURA to leverage its planned Farmersville, Texas facility, where multiple hemp-centric enterprises are being formed to promote hemp’s industrial potential. Even better news for investors is that USMJ can further leverage strengths from its recent partnerships with Alkame Holdings, Inc. and PAO Group, Inc. as part of the same focus.
Also, with PURA showing interest in investing in other publicly traded companies, consolidation between these four is certainly a possibility. Last month, USMJ said it has initiated efforts to refresh the company business plan after the impact on the company’s cannabis-themed restaurant operations from the COVID-19 pandemic. The company has been known to make strategic investments.
Keep this in mind, too. PURA and USMJ already share the same majority shareholder. Thus, as they work together to build a strategic and synergistic strategy to optimize shareholder value for each company, value can be created abd targeted by both to maximize the billion-dollar-market opportunities within the now diverse cannabis and CBD sectors.
Why The Surge?
During the first five trading days in February, the news from PURA justified the spike in the share price. But, PURA is also expecting to extend its market reach by capitalizing on the inherent value of its exclusive license to a novel cannabis extraction process. In a licensing deal with NCM Biotech, PURA has a unique ability to penetrate new billion-dollar-market opportunities by leveraging an extraction technology that could accelerate the creation of new brands targeting the massive CBD beverages, edibles, and cosmetics markets. The licensing agreement terms also permit PURA to utilize and potentially capitalize on NCM Biotech’s research in the medical-use CBD products space. That market, as investors have come to know, can be worth billions.
All of the above gets additional support from PURA’s recently announced 5% stake in Alkame Holdings, Inc., which can be immediately accretive to its EVERx brand. Moreover, with sales expected to exceed $2 million when the company announces year-end 2020 results, that deal can improve operating margins that would fall toward PURA’s bottom line.
Further, the partnership is in late-stage plans to pilot the production of multiple new CBD infused consumer products, including a program to produce and test market a CBD infused liquid sugar and a CBD infused pet food supplement. Also in play is speculation that the Biden administration may favor eliminating many federal restrictions in the cannabis space, with specific attention placed on easing current banking regulations that restrict how money earned in the cannabis sector can be banked.
If Biden does allow states more jurisdiction over regulating the markets, the sector could be in store for a massive rally. It would likely be a scenario where a rising tide lifts all ships and could cause a short-squeeze of immense proportions.
Puration In Motion In 2021
Puration Inc. shareholders have every reason to be impressed by the accomplishments made during the past two months. Still, the guidance appears to set the stage for several more near-term milestones to be reached. Remember, too, PURA shares have traded at far higher levels in its past, and with an infrastructure and partnership table that was less extensive than it is today.
Also necessary to take into consideration is that PURA is positioned to capitalize from multiple shots on goal. And, those shots are diversified, which could limit downside risk if individual market segments get soft.
Noteworthy, too, is that PURA is executing on its plan to increase shareholder value. February serves as a perfect example of driving growth through a combination of ambition and managerial strength.
And perhaps because of the ability to make deals, investors are starting to recognize that the sum of PURA parts today contributes to PURA being a much stronger company than when shares traded more than 10X higher.
Thus, the 244% surge may simply be the share price catching up with fundamentals. And if that is the case, these new agreements made could contribute to even higher gains as investors digest and evaluate the value created from a few savvy deals made just last week.
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