What's In The Latest Partnership For Puration Inc (OTCMKTS:PURA)?

Insider Financial
By Chris Sandburg / in Momentum & Growth, Momentum Stocks, Sector Watch, Stocks / on Thursday, 06 Apr 2017

The upcoming Southwest Cannabis Conference and Expo in Fort Worth, Texas, set to take place on April 22-23, is going to be a big event for a couple of companies on our cannabis radar. Two of these are NORTH AMERICAN CAN COM NPV (OTCMKTS:USMJ) and Puration Inc (OTCMKTS:PURA). The two are set to put forward a joint presentation rooted in the Puration branded EVERx CBD Infused Bottled Sports Water, with the presentation designed to build on the recently launched product.

During the last twenty-four hours, however, Puration has been running on some news unrelated to this launch. Well, unrelated in the sense that it’s got nothing to do with the North American Cannabis Company partnership (at least not yet), but perhaps related moving forward if the news in question plays out as the companies involved hope.

Here’s a look at what’s involved, and what it means going forward.

So, for those new to the company, Puration is a cannabis focused extraction company. Financial media descriptions (the standard blurb you’ll see on ticker pages) describe the company as a water filtration entity, which develops and manufactures filtration devices, water bottles, that sort of thing. Don’t be fooled. An operational pivot (mid 2016, on the back of its acquisition of some assets from the above mentioned North American Cannabis Company) now sees the company focus exclusively on getting THC out of the cannabis plant, and infusing it in various consumption items – water, edibles, all that sort of thing.

Of course, this pivot meant the company benefited from the November ballots in the US, but unlike many of the so called cannabis plays that drew benefit from the speculative capital in the space around that time, Puration’s run didn’t peak in November. The company ran up to $0.08 late January (a 60% premium on the November highs) and currently trades in and around $0.05, for a market capitalization of a little over $2.3 million.

As far as the latest announcement goes, Puration just told markets that it has scored a partnership deal with an entity called NCM Biotech. The latter has developed a cannabis extraction tech, and it’s essentially licensing the tech to Puration so that the latter can use it to develop its extraction based products.

We took a look at the patent, and it doesn’t look particularly revolutionary (it’s here for any interested readers), but then we’re not cannabis extraction experts. It’s basically the drying and grinding of the plant and then the bathing of the ground material in a solvent to extract the cannabinoids.

It was developed by a guy called Frederick Ferri, who apparently (and we’re going on the info available on NCM communication here) developed the extraction method, and built a company around it, in an attempt to get his mother some relief care when she had lymphoma.

Anyway, Puration thinks there’s some value in using this approach over another, and it’s going to use it to put a product line together that will reportedly include recreational, fitness wellness, alternative medicine and beauty products.

The two companies are going to present on the tech at the above discussed Cannabis Conference, so with any luck we’ll get some degree of insight at the event as to difference between this and other extraction methods, and how this plays into the quality of a final product, near term.

Whatever happens, this seems to underline a forward strategy for Puration. Basically, the company is striking up partnerships that enable it to control the various aspects of its supply and distribution chain, and we think this should set the company up as a pretty strong player in the infusion/consumption space going forward.

It’s not without its risks, and anyone looking at picking up an exposure to these early stages is going to have to get comfortable with the fact that said exposure is likely to be diluted farther down the line. That said, the recreational consumption space is set to expand dramatically, and of the companies vying to take a portion of it as and when it does, Puration is well worth a look.

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Puration (CE) (USOTC:PURA)
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