Why Focus on Cannabis & Mushroom Extracts?
November 25th, 2020
App, Exclusive, News, Top Story
Cannabis extracts are poised to become a $28.5 billion market by 2027, according to Grand View Market Research, representing a 16.6% compound annual growth rate. At the same time, the functional mushroom market is forecast to reach $34.3 billion by 2024, which represents a respectable 8% compound annual growth rate.
Let’s take a look at the growing demand for cannabis and other extracts and why Pure Extracts Technologies Corp. (CSE: PULL) is well positioned to capitalize on the market.
Powering Next-Gen Products
Canada legalized cannabis extracts in October 2019, opening the door to edibles, beverages, topicals and vaping products. While dried cannabis still represents about 70% of sales, cannabis extracts and edibles have each captured about 14% of the market. Cannabis edibles, in particular, have become one of the fastest growing segments of the market.
Growth in Cannabis Edibles – Source: Canada Government
There’s no doubt that cannabis extracts, such as edibles and beverages, appeal to a wider consumer market than dried cannabis. On the other hand, the production of hash, rosin and other extract-based products has provided legal alternatives to popular black-market products – where much of sales remain outside of legal dispensaries.
Many large, licensed producers have begun scaling up their in-house extraction capabilities, but many others have outsourced extraction to specialists. With experienced teams and equipment, these companies offer better economies of scale by taking in raw cannabis and converting it into a variety of extract-based products for resale to consumers.
Recurring Revenue & Blue-Sky Potential
Pure Extracts Technologies Corp. (CSE: PULL) provides tolling and white-labeling services via its state-of-the-art 10,000 sq. ft. EU GMP-compliant cannabis and hemp extraction facility. After securing a processing license and agreements with Licensed Producers, the Company is already generating revenue through tolling agreements and will soon scale up its white label business.
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In addition, the Company has developed its own nationally recognized vape pen brand, called Pure Pulls, with over 34 proprietary formulations. The team is in the process of applying for a sales license to bring Pure Pulls back to market in the near-term, along with its edibles brand, Pure Chews, which could open the door to blue sky revenue potential.
The Company is also expanding its business to include mushroom extracts by working on functional mushroom extraction processes compatible with its existing infrastructure. Management believes that there exists a significant opportunity for it to become an important extraction partner for the commercialization of new functional mushroom products.
Exceptional Management Team
Pure Extracts Technologies (CSE: PULL) has assembled an impressive management team and advisory board. With a flat management structure, the team is laser-focused on creating high-quality products and building a sustainable business that’s EBITDA positive. These efforts could unlock significant long-term shareholder value in a growing market.
CEO Ben Nikolaevsky joined the Company after serving as President and CEO of Natura Naturals Inc., a private Licensed Producer that was sold to Tilray Inc. (NASDAQ: TLRY). Founder and COO Doug Benville brings substantial experience with cannabis extracts, while Andy Gauvin brings a wealth of sales experience after serving as a vice president at Moosehead Breweries.
In addition to its management team, the Company recently appointed Dwight Duncan, a senior member of the Ontario Legislature, to its Board of Directors, as well as Dr. Alexander MacGregar, an expert in drug delivery technologies, to its Advisory Board. These appointments reflect its focus on regulatory compliance and research and development.
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The Bottom Line
Pure Extracts Technologies Inc. (CSE: PULL) recently secured a processing license from Health Canada and went public on the Canadian Securities Exchange. With an experienced and focused team at the helm, investors may want to take a look at the stock as a way to capitalize on the growing demand for cannabis and other plant-based extracts.
For more information, visit the Company’s website or download their investor presentation.
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