The bullish sentiment started to take root at the end of January when PURA announced that sales of its EVERx CBD Sports Water product are expected to again eclipse
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. That patented asset, issued by NCM Biotech, allows PURA to aggressively penetrate new billion-dollar-market opportunities by leveraging an extraction technology that could blaze new trails into the massive CBD beverages, edibles, and cosmetics markets. PURA is also positioned to benefit from having access to continued research by NCM Biotech to extend product reach into medical-use CBD products. That market, as investors have come to know, can be worth billions.
Now, with a recently announced 5% stake into
Investing Into Massive CBD Market Opportunities
Last week, PURA announced that it has taken a 5% stake in
Specifically, the partnership intends to pilot the production of multiple new CBD infused consumer products, including a plan to produce and test market a CBD infused liquid sugar and a CBD infused pet food supplement. Incidentally, ALKM shares were higher by 27% after the news of the investment was published, adding balance sheet value to PURA. The surge in price also reflects confidence in the ability of both companies to maximize combined opportunities.
Keep in mind, too, PURA is not a rookie in the CBD-infused beverage space. The company's flagship product, EVERx, was introduced in 2017 to target the sports nutrition market. Sales of the specialty water have continued to impress, and as noted, PURA expects to deliver back to back revenue growth exceeding
Moreover, as the economy edges out of consumers' logistical restrictions due to COVID-19, the company expects revenue growth to continue in the new year. That guidance makes sense, especially with a Biden administration that may favor eliminating many federal restrictions in the cannabis space. Expectations that his administration will ease current banking regulations and allow states to assume more regulatory oversight are bullish for the entire sector.
In fact, those moves could help accelerate PURA's plans to introduce new beverages, capitalize on current investments, and grow its product portfolio through targeted acquisitions. Still in the works, too, is the expected dividend from the company's spun-off cannabis cultivation segment that positioned PURA to focus exclusively on its high-growth core CBD-infused beverage business. Terms of that spin-off will benefit shareholders through a stock dividend by
Additional PURA strategic interests are likely contributing to the recent spike in share price. A deal with
A Sum Of The Parts Equation
In January, PURA said that value from its recent
PURA recently acquired property in
PAOG also brings expertise as a longtime participant in the cannabis sector and is advancing initiatives to introduce CBD-derived treatments as alternatives to traditional pharmaceuticals. They believe they will soon offer a better CBD-based therapeutic to replace conventional pharmaceutical treatments, especially opioid-based drugs that can induce potentially severe secondary ramifications. PAOG strategies could also fit well within PURA's long-term business plan.
Last year, PAOG acquired RespRx from
The benefits to PURA, and ALKM, for that matter, is that PAOG intends to work directly with PURA and ALKM's co-packing operations to deliver its innovative CBD nutraceutical care solutions to patients experiencing issues associated with COPD. Thus, success in publicly-traded PAOG could have an exponential and positive effect on PURA's long-term appreciation as well. At the very least, the relationship adds another shot-on-goal for near and long term success.
And with PURA actively evaluating strategic investments and acquisitions, the PAOG partnership has the potential to get much more extensive.
Puration Has Momentum Into 2021
Undoubtedly, the increase in share price after the first month of 2021 is encouraging. However, recent deals and the potential for new ones will likely attract even more attention. Of course, recording more than
Consider, too, that under the previous president's administration, CBD and cannabis stocks took a beating after a meteoric rise in the years before. Now, select companies that led the bulls a few years ago are back in focus. More specifically, revenue-generating companies like PURA are earning the lion's share of attention.
Also important to note is that PURA has positioned itself to benefit from multiple shots on goal. An investment interest in ALKM and partnership agreements with other emerging industry companies can create value that dwarfs its current
One thing is for sure. The sum of PURA parts today equates to a much stronger company than it was when shares traded more than 10X higher. Markets fluctuate, and sectors go in and out of style, that's a given. Another given, though, is that a company's stock price eventually catches up with fundamentals.
For
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