Dallas, TX – July 25, 2017 – Puration, Inc. (USOTC: PURA) announced last Thursday, July 20th, the acquisition of a 25-greenhouse grow operation. The week prior, the Company announced a $1.2 million sales contract associated with the then pending acquisition. The online presentation here is intended to elaborate on the overall strategy behind the acquisition, and the potential for the revenue from the acquisition to grow to $16 million annually in the relatively near term, and well over $100 million in annual sales in the long-term.
Puration’s Overall Business Strategy And Where The Recent Acquisition Fits-In
PURA operates a U.S. Patented Cannabis Extraction Process and sells its extracts for infusion into a variety of consumer products to include beverages, foods, nutritional supplements and cosmetics. The challenge in today’s market with the infusion business model is that a Nabisco and General Mills are not yet in the market to purchase cannabis extractions that can be infused into cookies and cereal. In other words, there is not yet a market for the cannabis extractions Puration is selling.
With the market for extracts being less than developed today, Puration is helping in the meantime to create clients for its extracts. Puration has partnered with various investors and companies to create the EVERx CBD Infused Sports Nutrition Line of Products. An EVERx CBD Infused Sports Water was introduced earlier this year, and flavored EVERx CBD Infused Sports Waters are coming to market soon. A number of EVERx CBD Infused Sports Performance Supplements are in the works. Puration has also partnered with Spanish Peaks Food and Beverage to develop Cannabis Infused Beverages and Edibles. Puration has also partnered with North American Cannabis Holdings to produce cannabis infused products under North American Cannabis Holding’s AmeriCanna Cafe brand. Other partnerships are in the works. The Company is generating sales through these partnerships today and expects sales to start ramping rapidly into the millions.
Puration is working to improve its Patented Extraction Process. Through its partnership with NCM Biotech, the extracts from the Patented Extraction Process are being evaluated in medical trials. The results of the medical trials contribute to improvements Puration can implement into its recreational, and health and wellness applications. The addition of an in-house grow operation provides Puration with the opportunity to start controlling the quality of the cannabis plant from which it will obtain its extractions. An in-house grow operation also substantial improves profit potential by reducing or eliminating the need to externally source cannabis for extraction.
Making Money On The Grow Operation Today, Tomorrow And In The Future
Puration acquired First Choice Nursery. First Choice has a 25-greenhouse operation and has access to 400 existing greenhouse pads with an existing irrigation infrastructure. The First Choice Nursery operation is built on a multi-generation, family owned, industrial nursery in East Texas that experienced a transition issue when the business passed from one generation to the next. First Choice has worked closely with the family to surmount the transition issue in order to bring the nursery operation back to its full potential. Puration now owns 51% of First Choice Nursery.
Texas has passed a medical marijuana law in 2015 with the first licenses to be issued in September of this year. With First Choice Nursery, Puration is strategically positioned to get in on the ground floor of the legal cannabis market in Texas. However, Texas is well known as a conservative state, and the fledgling legal cannabis market will likely take some time to mature. Puration has a strategy to wait out the evolving legalization process in Texas.
The revenue from the $1.2 million contract recently announced in conjunction with the First Choice Nursery acquisition will be derived from the sale of flowers for landscaping. The near-term potential for sales to increase to $16 million in sales is based on the expansion of the First Choice Nursery 25-greenhouse operation into production coming from the additional 400 greenhouse pads. The margins from the landscaping flower markets are attractive and not only sufficient enough to maintain the grow operation for future conversion into cannabis growing, but also to internally fund future growth. The revenue potential from the 400-greenhouse facility, once cannabis legalization permits, can easily exceed $100 million annually based on the prices set in the current $20 billion legal cannabis market in the United States today.
Pharmaceutical Sector Expansion
Puration’s partner NCM Biotech is already working with university research departments in the development of pharmaceutical applications. NCM Biotech's medical advisory team includes John N. Gaitanis, M.D., Director of Child Neurology at Tufts Medical Center/Floating Hospital for Children; Lloyd R. Saberski, M.D., Associate Professor of Anesthesiology and Chronic Pain Management, Yale University, and John McMichael, Ph.D., President and CEO Beech Tree Labs. Feedback from the extracts derived from the Patented Extraction Process used by Puration has indicated that the extracts have “a greater efficacy potential that GW Pharmaceutical products and candidate products.” With the addition of the First Choice Nursery Grow operation, NCM Biotech and Puration are working together on a university partnership to grow a unique strain of cannabis that can further enhance the quality of the extracts derived from the Patented Extraction Process.
A Creative And Sound Strategy Not Yet Reflected In The Current PPS
Puration has a creative and sound strategy. Both the creativity and sound nature of the strategy set Puration apart from the other start-ups in the cannabis sector. Puration has creatively developed a plan to make its mark as recognized brand name for cannabis extraction similar to the way Splenda became recognized as a leading sweetener in snacks and beverages for diet conscious consumers. The creativity differentiator is seen in Puration’s strategy to create customers like EVERx, Spanish Peaks and AmeriCanna Cafe. While creativity can be perceived as less than sustainable, Puration has otherwise established sustainability by building infrastructure for expansion that pays for itself in addition to creating margins that can internally fund future growth. Management is optimistic that Puration’s creative and sound strategy will become more apparent than the current PPS reflects as ongoing quarterly reports demonstrate the Company’s progress and future potential.
Disclaimer/Safe Harbor: This news release contains forward-looking statements within the meaning of the Securities Litigation Reform Act. The statements reflect the Company's current views with respect to future events that involve risks and uncertainties. Among others, these risks include the expectation that any of the companies mentioned herein will achieve significant sales, the failure to meet schedule or performance requirements of the companies’ contracts, the companies’ liquidity position, the companies’ ability to obtain new contracts, the emergence of competitors with greater financial resources and the impact of competitive pricing. In the light of these uncertainties, the forward-looking events referred to in this release might not occur. These statements have not been evaluated by the Food and Drug Administration. These products are not intended to diagnose, treat, cure or prevent any disease.
Brian Shibley, CEO