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The Plant-Based / Psychedelics Hybrid Co. “Positioned For Growth”

Dave Jackson Dave Jackson, Stockhouse
0 Comments| November 5, 2020

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Meet the Company and its CEO that’s positioning itself to be the premier cannabis commercialization extractor and manufacturing partner for functional psychedelic mushroom companies.

Based on extensive extraction and production experience, Pure Extracts Corp. (CSE: PULL , OTC: BGKYF) is leveraging for growth in the commercial cannabis and psychedelics sector. With a team of qualified experts in the space and cutting-edge CO2 and ethanol extraction technology, the Company is set up for long-term strategic distribution and product innovation.

Pure Extracts plans to enter the commercial sector as a producer of the purest quality specialized extract oils, along with a compelling brand development plan. The company has recently received a Health Canada Standard Processing License and is currently applying for a Dealers License with Health Canada which will enable them to buy, sell, test and produce psychedelics in an EU GMP environment.

The Company is soon to be listed on the Canadian Securities Exchange under the symbol “PULL”.

In this informative vodcast, Stockhouse Media’s Dave Jackson was joined by Pure Extracts’ CEO Ben Nikolaevsky to discuss the Company’s upcoming RTO, four key focuses, one-of-a-kind business model, and a variety of topics cannabis and psychedelics investors are sure to find fascinating.

SH: To start off, Ben, can you update our investor audience and your investors on the progress of your upcoming RTO and when you plan to go public?

BN: Super excited! We're so the first week of November, and we'll be trading on the CSE, as you said under the symbol ‘PULL’.

SH: You’ve described your operation as “a large scale cannabis and hemp extraction company with proven know-how in toll processing and white label manufacturing of vapes, edibles, and more.” How has Pure Extracts positioned itself to become a market leader and what does the road to profitability look like?

BN: Thanks Dave. We’re a plant based extractor, and that’s what we like to classify ourselves is as, we extract plant-based products, be it hemp, cannabis or functional mushrooms. Our expansion plan and product lines expand through cannabis products through edibles, vapes, and oil products that will be produced for LPs, ourselves, and on the bulk market. So we have three different facets of production and sales in our core cannabis and hemp area. And then we do extraction for functional mushrooms as a new, exciting area of the business that is emerging right now. And then we'll be launching our own line of functional mushrooms, oil extracted for sale through our online presence.

SH: Pure Extracts has four key focuses. Can you walk us through them and explain their significance to investors?

BN: Absolutely. Our four pillars are centered around the total processing of hemp and cannabis. Processing is taking other people's products, running it through our extraction processes through CO2 and-or ethanol, and then returning that output to our customer set and charging them a fee for that. You know, there's been a little bit of pricing pressure on extraction, but we're a really simplified organization and we're built for profitability. So we're quite excited about that. We have several toll contracts underway and we’ll be starting production of those in November and starting to deliver the oil back to our customers. The second pillar of our revenue is a white label product creating vape, cartridges, tinctures, and whatnot for other LPs, producing that, putting their label on the products and sending it back to them so they can sell that to the provincial stores for distribution.

We're in the works to provide our first vaping program with one of the LPs and we're reporting on several other pieces of business in the white label area of our business. And then we have our own branded product under Pull. Pull, vape cartridges is called Pure Pull, Pure Edibles we have a gummy line. I have a line coming out and some other product sets that will bear our names. We have about 35 different variations of oil in our inventory to be able to produce that have been tested in-market previously, either in Canada or in the US, so a very strong customer desire for these skews that will be coming out in the end of first Q or bearing our name available at the provincial locations for distributions. And then the functional mushrooms said from extraction. When we looked at the functional mushroom and the psilocybin area that really stuck out to me is when you go to your local vitamin store that product hasn't changed since the sixties when functional mushrooms really hit the market.

People were grinding up product, capsulizing it and putting it to market. So when you look at that, it's more of a holistic type of medicine. When we took a look at the product set and the differential through extraction, and you can have traceability authenticity and really dial in the dosing and being able to mix your formulations with some net benefit of other botanicals and whatnot, that really is the life blood of where the functional mushroom set is going to for plant extractors. And that area of the business is super exciting for us because obviously it's just starting out and you look through your Instagram or LinkedIn feeds, it's all over, you know, from a single product sales there's new companies coming to market, super exciting. We're on the forefront of bringing the product into the 2.0. It will be extracted. We know the potency we're able to dial in the formulations quite easily and it's just a pure product. So we don't have to worry about if the product came in from the US or Canada or China, we can purify it just like we purify hemp and cannabis and bring it to that 99.9% purity level, take out any impurities from the products that we'll be able to sell them quite confidently. So we're super excited about that product.

SH: Your extraction capabilities in beautiful Pemberton BC seem amazing – whether from hemp or cannabis plants – especially your ability to process hemp and cannabis biomass into ultra high purity oil. Can you explain how Pure Extracts is able simply get more out of the plant for less?

BN: Absolutely. So Pure Extractors have been in this business for five years plus under the Pure Pulls brand. They were one of the first books that put the CO2 extraction functionality on the market, and they did R & D with companies like Vitalis and a few other ones to really get the most out of our extraction capabilities. And we do some proprietary tweaking of our machinery to help us get the most out of that. And with the background of our extraction -- leaders within the production facility -- we're able to maximize the output by not sacrificing the quality of the product. And we were one of the first to bring a full spectrum product to market. It's a newer product set for the Canadian market. It's quite prevalent in California, Nevada, Oregon. The Canadian market is really a distillate market today when you buy your vape cartridges, mostly distillate, the cannabinoids and terpenes have been stripped out. You know, we like to provide a product that has the terpenes still attached to the product. It gives a better experience to the customer, and that's really part of our different (inaudible). You know, we deliver more of a premium product/ It's harder to make, but ultimately, it's a better product for the consumer.

SH: Pure Extracts is applying to Health Canada for a ‘Natural Health Products Site Licence’ which will allow the Company to enter the functional psilocybin mushroom space. Can you update us on the progress happening here?

BN: Sure. So the functional mushroom space is blossoming quite quickly. W are a client for a functional license with Health Canada to be able to extract functional mushrooms onsite and then sell them to the general public through our Amazon store. That will be our delivery agent. Functional, as I was talking about, it is classified as the new CBD of our times. Great health benefits from our wellness business. We're a big CBD shop also. So it fits very well into our wellness side of the business. By applying to this license, we'll be able to make these compounds go right out of the gate, work with other functional mushroom covenants for doing R&D and helping them and really being a commercialization agent and the functional space. There's a lot of great companies that have a lot of great ideas, but they don't know how to execute them and produce that.

And having the expertise in a plant-based extraction, we can help them bring to market. So not only our own brand, which you'll see on shelf in one cue, but helping the other folks in the functional space produce their products. And then going one step further, as so, as psilocybin becomes legalized in the Canadian market, you know, we'll be on the forefront of formalization and commercialization of psilocybin. On the medical side of the business, we're working with Dr. McGregor at Transpharma, a large Institute in Toronto, by helping our customers develop psilocybin and research with Transpharma. Eventually when, when it becomes legal, we'll be able to get involved from the actual production and formulation of different psilocybins and variations to deliver to the clinics and the doctors that are prescribing that product to be able to mass produce it

SH: As the medicinal psychedelics sector gains more and more traction internationally, how do you see your company as a game-changer, and if so, how do you create a competitive advantage for Pure Extracts moving forward?

BN: We have an early mover advantage and we've dealt with mushrooms and other plant-based products before. So being able to extract the product, purify it, bring it to a state as a usable commercial product set is what we do. And we've already been in this business previously by dealing with mushrooms. So we were able to get out of the gate quickly and help our customers and bring the product to market. And as it becomes legal, you know, internationally, we're able to ship internationally. Depending on the locations right now, you can't share in Canada for psilocybin, it's still illegal. But once that changes being part of the Health Canada regime, we'll get our licensing fairly quickly and be able to ship that product internationally. And Canada has a really good name for their extractive products. We've seen the cannabis industry shipping product from Canada on a regular basis. And I don't think there's going to be much difference for our shipping our psilocybin internationally. The international community rule holds Canada's regulations in very high regard. And they'd rather source that type of product from a known entity in a jurisdiction that's highly regulated like Canada.

SH: You’ve said that Pure Extracts’ primary target customers are for white labeling agreements in conjunction with your Banded Pure Pull product line. Can you explain exactly what this means and what are the core benefits to this initiative?

BN: When we looked at the extraction business, tolling is a business that fluctuates from a cost perspective. So your pricing goes up and down and that those will always be there. When we look at, uh, white labeling, that's where we have some value to our customers, and we can help them bring new products to market. And that's where we really shine. We've developed, as I said, we have over 30 strains and different variations in our inventory of oil based products. And with our expertise, we can help our customers develop new and exciting products that may not fit the Pure branded product, but definitely we can help them develop new products for the market set and have that expertise. You know, a lot of the folks that have come to us have tried other extractors and they don't have the experience…call it a bit of a science project for some people.

For us, we have proven scientific folks on staff that have produced this in different markets. And we can bring the white label product to market very quickly for consumer sets. And that's really where we shine. And then if we go one step further on our own products that obviously pure polls, pure edibles will be back on market. That product has been tried and tested through several different markets and several different variations. So we know that product sells very well, and it be through BC, Alberta, Ontario first through our customer sets. And we're very confident that the full spectrum products that we'll be launching will be well-received in the provincial markets

SH: Value and opportunity are catchphrases that really get the attention of small cap investors? What can you tell them that makes your business model so intriguing and attractive?

BN: Our valuation is super attractive. First of all, we are firm believers of execute and the value will come with it. So when you look at our valuation we’re coming out of our $21 million market cap, we’re probably one of the lowest market caps of the extractors that come out of recent day to be able to execute and show the investment community, what we can do and have that rise to our equity value. We've been in this business before. I come from a cannabis background as you’ve said with Tilray. So this isn't our first foray into the market. We're able to produce quite cost-effectively. We lived through the harder cycle of cultivation and having to stretch a dollar. So we know how to build a very flat organization. We don't have multiple tiers of management (inaudible) is very small. We've built the operation at 10,000 square feet, so we can grow, but we didn't build a behemoth that have to service from a cap X perspective. So we'll be able to close our contracts quite cost-effectively and really bring the value to our customers in our expertise, and ultimately that that will pass through in profitability and earnings to our investment community.

SH: Can you discuss the long-term strategy for the company moving into 2021 and beyond, and what investors should be looking out for?

BN: Innovation. So the onset of the 2.0 products in the cannabis and hemp space, super exciting. I see more products on a weekly basis than I've seen on a yearly basis coming through our front door with customers asking us to formulate and produce those products. And even from the Pure branded products, there's exciting new products in the pipeline that will (inaudible) 2021 into 2022 that will hit the market that the Canadian public hasn't seen them. That's super exciting. And those product sets are super exciting from that perspective. And we think they'll sell very robustly as the flower market continues to decline and the oil market based product market continues to grow. We'll see a huge demand on that. We're already seeing it through the gummy market, the drink market and the vape market. And they've just taken the dry flower market by storm and the new innovations of products that are coming will, you know, just double that. And then if you mix in a little bit of our functional mushroom, and eventually the psilocybin production, that is a huge greenfield for us and being able to formulate functional mushrooms with things like botanicals, CBD, you name it, you know, 2021, that's under development. You know, that is a huge growth market for us. We have first mover advantage on that part of a segment. And we think, you know, 2021 will be explosive and a growth of product set and ultimately revenue and profitability.

SH: Finally, Ben, can you tell our audience a little bit about your corporate management team, along with the experience and innovative ideas they bring to the cannabis and psychedelics extraction space?

BN: So we have a very flat management team as we talked about. Super experienced all in the cannabis space and an extraction space. Myself, I come from a long, long career in managing agricultural and-or cannabis companies mature, and it was my last foray into a cannabis business which we sold to Tilray. I brought along my head of business development, Sandy Logie – a hardcore cannabis guy in capital markets guy…was in the California market. And again, our head of sales, 20 years with Moosehead beers, head of sales, knows all the provincial sales entities, knows the model for large scale distribution of a CPG brand. …Doug Benville, our founder and COO hardcore extractor has been in the cannabis business for 10 years, was integral in developing our product set that'll be launched (inaudible) vendor Pure Pulls. So we have a really strong management team and a very strong science team with our QA people who all came from the cannabis business, and we have strong partnerships with Transpharma and some of our other scientific partners to help us develop our new product mines and ultimately the functional mushroom in the psilocybin area.

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FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.

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