While the result of the US presidential election was a long time coming and is still not final, there was a clear winner in the US on November 3rd – the cannabis industry! Because in the election, various US states also voted on the marijuana legislation – and five states decided to expand it! Cannabis is now also allowed as a luxury food in Arizona, New Jersey, Montana and South Dakota, which means that it is now allowed in 15 states and Washington D.C. Marijuana is completely glazed and the market continues to grow.
In addition, in Washington D.C. Incidentally, the possession of so-called magic mushrooms (shrooms) has also been decriminalized (not to be confused with legalized), the active ingredient psilocybin of which is currently being researched as a possible alternative to treatment. These are both very interesting developments for the mood in the industry and also for the company that we want to introduce to you today – Pure Extracts Technologies (CSE PULL / WKN A2QJAJ)!
The company, which was only listed on the US stock exchange shortly after the election, is an extraction company that focuses on the areas of cannabis, hand and functional mushroom products (mushrooms / shrooms). Pure Extracts has the clear goal of becoming the leading extraction company in Canada!
While in the first cannabis boom many companies raised as much money as possible with the promise to become active in as many different areas as possible, Pure Extracts focuses on the core business and uses the currently low prices of the raw material to manufacture high-quality, extract-based products – in several promising product categories.
And Pure Extracts doesn’t start “from scratch” like many companies in the cannabis industry, especially at the beginning of the legalization boom! The management team, led by CEO Ben Nikolaevsky, has experience in all facets of the cannabis industry, including five years of experience in volatile plant extraction, the development of new products (including more than 30 proprietary vape formulations) and the operation of large ones Facilities, licensing of US brands for Canadian and international markets as well as brand creation, marketing and sales. For example, Mr. Nikolaevsky runs Natura Naturals Inc., a private, licensed producer in Canada, which was then taken over by Tilray!
Pure Extracts also already has a new, very advanced extraction plant in Pemberton in the Canadian province of British Columbia just 20 minutes away from Whistler, which is currently being expanded to a capacity of 200,000 kg of biomass per year. According to the company, the plant complies with the GMP standards of the European Union and Pure Extracts also wants to obtain the corresponding certification in order to be able to export to the EU at a later date.
The license for Canada is already held, a so-called Standard Processing License according to the Cannabis Act the Health Canada of the 100% Pure Extracts subsidiary Pure Extracts Manufacturing Corp. on September 25th of this year. As already mentioned, Pure Extracts does not grow the required mass itself, but simply buys cannabis and hemp at wholesale prices.
Pure Extracts wants to generate sales almost immediately, via so-called order processing (great processing) and white labeling (manufacture of products that are sold under other brands) for licensed cannabis and hemp producers who do not have the necessary extraction expertise and that have the necessary, expensive equipment. Corresponding contracts are already secured! This enables the company to generate high-margin, predictable, and recurring revenue while avoiding many of the costs associated with producing biomass.
Magic Mushrooms / Functional Mushrooms
Plus, Pure Extracts is expanding the business a bit, to include mushroom extracts as well. Processes for extraction in the field of functional mushrooms are already being developed – using the existing infrastructure. Management believes that there is a great opportunity that Pure Extracts will become a key extraction partner for the commercialization of new products in the functional mushroom space. Especially as the sector is shifting from holistic production processes to extraction-based products of near-pharmaceutical quality – such as Pure Extracts could offer. Here, too, the company assumes that functional products of the “Pure Mushrooms” brand will be available for direct sale to end customers via the Pure Extracts e-commerce platform by the end of the first quarter of 2021!
In the next step, Pure Extracts plans, only logically, finally to enter the market for psychedelic mushrooms (magic mushrooms) – another business model within the overarching strategy for penetrating the extraction market. A share in a market that is expected to be worth around USD 14 billion by 2024 beckons!
In general, to illustrate the potential for Pure Extracts: The global market for cannabis extracts is expected to reach the mark of USD 28.5 billion as early as 2027 (according to Grand View Research) and an annual growth of no less than 16.6% during this period. record! In addition, the market for functional mushrooms will already have a volume of USD 34.3 billion in 2024 and is expected to grow at an equally strong 8% per year between 2019 and 2024!
Last year, oils made up the largest share of the global cannabis market at 66.5%, with North America accounting for the largest portion. That, it is said, can be attributed to the high level of use due to official permits! In Ontario, Canada’s most populous province with more than 14 million people, the provincial government has recently licensed up to 40 new dispensaries per month, so the number of shops that are allowed to sell cannabis products there could rise from 200 to almost 700 within a year !
With Pure Extracts Technologies (CSE PULL / WKN A2QJAJ) We believe we have found a company that, unlike many pioneering companies in the cannabis sector, is already generating reliable income and has the potential to significantly increase it! Because, in our opinion, the company not only has a good chance of significantly expanding the “classic” extraction business for third parties, but will also generate sales with its own branded products in the foreseeable future. In addition, there is the planned entry into the business with functional mushroom products and later the potential business with psychedelic mushrooms (magic mushrooms) and their active ingredient psilocybin!
With currently outstanding 70.7 million shares and a price of 0.61 CAD, Pure Extractions Technologies currently has a market capitalization of just around 43 million CAD, which in our opinion – despite all the risks that investors must always be aware of – does not adequately reflect the opportunities that are offered to the company. We believe that if the expected newsflow sets in in the next few weeks, this could move the share significantly. We will definitely report!
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In accordance with Section 34b WpHG and Section 48f Paragraph 5 BörseG (Austria), we would like to point out that partners, authors and / or employees of GOLDINVEST Consulting GmbH can hold shares in Pure Extracts Technologies and thus a conflict of interest could exist. Furthermore, we cannot rule out that other stock market letters, media or research firms will discuss the values we have discussed during the same period. Therefore, symmetrical generation of information and opinions can occur during this period. Furthermore, there is a consulting or other service contract between GOLDINVEST Consulting GmbH and a third party in the issuer’s warehouse (Pure Extracts Technologies), which creates a conflict of interest, especially since this third party grants GOLDINVEST Consulting GmbH for a fee for reporting Pure Extracts Technologies rewards. This third party may also hold, sell or buy shares in the issuer and would benefit from an increase in the price of Pure Extracts Technologies shares. This is another conflict of interest.
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