Puration Cannabis Beverage Industry Reorganization Progress Report
Dallas, TX – July 31, 2018 Puration, Inc. (USOTC: PURA) today published this management progress report on the company’s continuing reorganization strategy to consolidate and redouble all resources on its proven cannabis infused beverage business currently on track to realize an estimated $1 million in sales this year. Central to the reorganization strategy is Puration’s (PURA) spin-off of its cannabis cultivation business so that both the remaining beverage business and the independent cultivation business will fall under two separate and dedicated public holding companies. PURA will retain the beverage business and a new, yet to be announced, public holding company will house the cultivation business. Shares in the independently listed cultivation business will be distributed to the shareholders of PURA. Management confirms that the spin-off is expected to be complete, as previously announced, shortly following Labor Day. New details on this reorganization plan are included in this publication.
New Shareholder Communications Staff
The company recently added a new staff member dedicated to shareholder communications. Travis has been at it for two weeks now and many of you that have emailed or called the company may have already received a return email or call. Travis has also upped the number of group emails going out to all shareholders as part of an overall effort to enhance shareholder communications. Shareholder feedback from Travis’ communication indicates that a fair degree of confusion exists in regard to PURA’s current strategic reorganization. In addition to providing new details here, this communication will also endeavor to offer some clarifications on the strategic reorganization.
PURA And USMJ Sister Companies
First off, PURA is a sister company of North American Cannabis Holdings (USOTC: USMJ) (“USMJ”). Specifically, PURA and USMJ share the same controlling shareholder. PURA is in fact a spin-off of USMJ. In 2013, the founders of USMJ entered the cannabis market motivated by a variety of personal reasons. Having little experience in the cannabis sector, and being suspicious of any early stage, so called “sure-fire” business plans for capitalizing on the cannabis market, the founders initiated an exploratory business model to trial a variety of business initiatives in the cannabis market.
A number of the early cannabis business projects came and went. Those projects that showed promise, USMJ then worked to validate further with dedicated investment and the generation of revenue. In the course of its efforts to garner dedicated investment to further develop a business built around a patented cannabis extraction process, the founders of USMJ spun-off the extraction business into what is now PURA.
Subsequent to the USMJ spin-off of PURA, the founders of USMJ reorganized their controlling ownership in USMJ and PURA under a company called ACI Conglomerated. Their mission under ACI Conglomerated is to continue developing a variety of cannabis sector enterprises through an explorative, trial and error business model.
To share this explorative, trial and error business model opportunity with shareholders of USMJ and PURA, the founders intend to repeat the spin-off approach they took when they reorganized the extraction business under PURA. The extraction business was sold to PURA for PURA stock and a portion of the stock was distributed to the shareholders of USMJ in a dividend distribution. Now PURA is selling its cultivation business to an independently listed public company in exchange for stock in the independently listed public company, and a portion of the stock in the independently listed public company will be distributed to the shareholders of PURA in a dividend distribution.
PURA And USMJ Joint Announcement Confusion
Some of the confusion indicated in recent shareholder feedback seems to stem from the joint spin-off announcement by PURA and USMJ. Both companies are simultaneously executing spin-offs. PURA is spinning-off its cultivation business and USMJ is spinning-off its restaurant business. Both spin-offs are designed to redouble business development efforts within the burgeoning cannabis food and business sector, but both spin-offs are completely separate transactions. If you own shares in PURA, you will receive spin-off shares in the cannabis cultivation business spin-off. If you own shares in USMJ, you will receive spin-off shares in the restaurant business. If you only own shares in PURA, you will not receive spin-off shares in the restaurant business. If you only own shares in USMJ, you will not receive spin-off shares in the cultivation business. To receive spin-off shares in both the cultivation and restaurant business spin-offs, you have to own shares in both USMJ and PURA. The aforementioned dividend distribution of PURA shares to USMJ shareholders (See PURA And USMJ Sister Companies above) was executed in 2016. The dividend issuance of PURA shares to USMJ shareholders has already taken place. If you acquired shares of USMJ after the dividend date, you do not have PURA shares coming. USMJ does not own PURA. The two companies are separate companies that share the same controlling shareholder.
Going forward, PURA and USMJ will separately communicate in regard to their two separate spin-offs in an effort to avoid any further confusion. While the two companies share a website at this time, PURA news and information is available on the website at https://www.aciconglomerated.com/pura and USMJ news and information is available on the website at https://www.aciconglomerated.com/usmj. New and separate websites for each company are under construction.
Explosive Cannabis Infused Food And Beverage Market Driven By Spirits Interest
The cannabis infused food and beverage sector has risen to the top of the overall cannabis sector with global alcohol giant Constellation Brands (Corona Beer, among others) recently purchasing a 9.9% stake in Canada’s largest licensed cannabis producer, Canopy Growth (NYSE: CGC), for 245 million Canadian dollars (US$190 million), plus options to raise its stake to just under 20%. The legal global cannabis market could reach $140 billion dollars by 2027 according analysis by European investment bank Bryan, Garnier & Co. The report also highlights the economic potential of cannabis-infused beverages. Cannabis-infused foods and beverages are cannabis products that comprise of cannabinoid compounds such as cannabidiol (CBD) and tetrahydrocannabinol (THC). Market research firm Technavio predicts that the cannabis-infused food and beverage products market will register a CAGR of more than 25% from 2018 to 2022. Research firm Cowen & Co. reports U.S. legal cannabis industry sales growth is on track to surpass soda sales by 2030.
In sync with Constellation Brands interest in the cannabis sector, the largest retailer currently carrying PURA’s EVERx CBD Infused Sports Water is in fact a wine and spirits retailer. EVERx, among other outlets, is carried by SPEC’s Wines Spirits & Finer Foods. Founded in 1962 by Carroll “Spec” and Carolynn Jackson, SPEC’s today operates 170 retail locations. In addition to selling spirits, wine and beer, SPEC’s stores include deli and specialty groceries. SPEC’s is a well know brand name in Texas and continuing to expand its reach to new locations.
PURA Spin-Off And Dividend On Track For Labor Day
PURA is streamlining its cannabis infused beverage business with the spin-off of the cultivation business. At the same time, the cultivation business is a promising business by itself. With the dividend distribution of cultivation shares to the PURA shareholders, PURA shareholders will have the opportunity to benefit from the independent growth of each operation. The sale of the cultivation business to an independently listed holding company in exchange for shares in the independently listed holding company is on track for completion shortly after Labor Day. The dividend distribution of cultivation shares to the shareholders of PURA is also on track for shortly after Labor Day.
While PURA is being streamlined to focus on the cannabis infused beverage business, management plans to expand the beverage business organically and through acquisition. PURA has already announced the addition of THCSavor adding to its EVERx line of drinks. PURA is also planning the acquisition of another cannabis sector beverage scheduled to close promptly after the spin-off of the cultivation business.
The name of the independently listed holding company acquiring the cannabis cultivation business from PURA will be revealed soon and the anticipated terms of the acquisition to include the number of shares to be distributed to shareholders will also be revealed soon. Management was targeting the end of July for revealing the holding company and the anticipated terms of the transaction. In an effort to insure all the “t’s” are crossed and all the “I’s” are dotted, management isn’t quite ready to reveal these details, but does believe the transaction is still on track to be completed shortly after Labor Day. The acquiring holding company identity and transaction terms will be announced imminently. Keep an eye out.
For more information on Puration, visit https://www.aciconglomerated.com/pura.
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.