23 Feb 2021 BY MICHAEL BERGER
Last month, we highlighted Pure Extracts Technologies Corp. (CSE: PULL) (OTC: PRXTF) (XFRA: A2QJAJ) as a leading plant-based extraction company that is focused on cannabis, hemp, and functional mushroom sector.
We have always referred to Pure Extracts as a legitimate and differentiated play on the cannabis, functional mushroom and burgeoning psychedelic market. In 2019, we visited the Company’s facility in British Columbia and were impressed with the operation. Pure Extracts is using state-of-the-art technology to capitalize on the plant extract market and we are favorable on how the story has advanced so far.
Signs Agreement with a Leading Cannabis Edible Brand
Earlier this week, Pure Extracts announced a major milestone and reported to have entered into a licensing deal with United States based Taste-T, LLC, which has been selling its product line in strategic US markets (i.e., Nevada, Massachusetts, Michigan and Oklahoma). We consider the agreement to significant potential catalyst for growth due to the performance of Taste-T’s products and are will monitor how the relationship advances.
Two of Taste-T’s best-known products are Margarita Chill and Fireball Cinnamon. We have tried the Fireball Cinnamon product and are favorable on how it is differentiated from other cannabis infused products that are on the market. Taste-T utilizes a proprietary manufacturing system to produce and package branded cannabis gummies and we are favorable on the amount of traction that the brand has been able to generate.
Under the agreement, Pure Extracts has exclusive rights for Taste-T’s products in Canada and has first rights to other strategic international markets. As part of the agreement, Taste-T has delivered one of its custom, state-of-the-art, gummy manufacturing machines, which is certified to meet Canadian standards, to Pure Extracts facility.
Going forward, Pure Extracts will be selling Taste-T’s products in a format that complies with Health Canada’s regulations. The Company said the Taste-T product line will have distribution in licensed dispensaries throughout Canada and will be sold under its ‘Pure Chews’ edible brand. The signing of the agreement provides Pure Extracts with the ability to leverage the Fireball brand power that is associated with Taste-T’s product line. We consider Taste-T to be one of the few legitimate US cannabis brands and are bullish on the growth prospects that are associated with the brand.
A Growth Story to be Aware of
Although we are less than three months into 2021, Pure Extracts has been executing at a high level and has been reporting important developments as it relates to a variety of initiatives. From raising capital to adding strategic players to the leadership team, the story has reported significant advancements and this is a trend to be aware of.
Going forward, we are bullish on the amount of revenue that can be generated through the toll processing agreements that it has already entered into. Over the next year, we expect Pure Extracts to continue to report strategic processing and white label agreements and believe the story is in the early innings of a major growth cycle.
When compared to other extractors, Pure Extracts is trading at a considerable discount and we find this to be of significance. Since Pure Extracts is focused on several key markets, we believe it has greater growth potential and believe the market is not taking this aspect of the story into account.
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