PAO Group, Inc.'s (OTC Pink: PAOG) strategy of seeking accretive partnership opportunities is about to pay off in a major way.
Last week, PAOG emphasized the significance of the latest update from its business partner Alkame Holdings, Inc. (OTC Pink: ALKM), which indicated that its new production facility is nearing operational status. The new production facility boasts state-of-the-art equipment and is equipped with five loading docks as opposed to two at the original facility, and is said to effectively double the manufacturing capabilities of the company. PAOG intends to use ALKM as a copacker and North American Cannabis Holdings, Inc. (OTC Pink: USMJ) as a distributor to produce and market its CBD nutraceuticals. Access to the new facility could be transformational in bringing a stronger brand presence for PAOG in stores nationwide.
Building a Portfolio Targeting Innovative CBD Applications
PAOG recently provided an update on the development of its unique line of CBD Nutraceuticals. PAOG expects income from these products as soon as this year, as the business continues to explore further applications for its CBD-based pharmaceuticals.
PAOG’s first product to enter the market will be CBD RELAX-RX, which is formulated to treat symptoms of depression and anxiety. The anxiety and depression treatment market was estimated at $15 billion in 2015, with CBD-based options rapidly becoming an area of great interest for consumers worldwide. The overlap between these two markets is significant for PAOG, who is working to provide an effective solution that targets an area of huge demand.
The second CBD Nutraceutical released by PAOG will be derived from the company’s ongoing research on COPD, or chronic obstructive pulmonary disease. A 2015 study showed that CBD could potentially help in opening the bronchial passages, and PAOG believes that the offering could become a preferred alternative from pharmaceutical options in the management of COPD-related side effects.
The company’s third CBD Nutraceutical is currently being developed in collaboration with Puration, Inc. (OTC Pink: PURA) and its EVERx CBD Sports Water Brand, targeting the sports nutrition industry that has been shifting to market toward an increasingly health-conscious consumer base. The EVERx CBD Sports Water line has enjoyed a strong market performance, leading the team to introduce a sugar-free variety and continue working on new formulations and flavors. The company’s access to ALKM’s new facility will allow them to significantly increase the number of drinks produced and sold, creating a strong opportunity to rapidly increase its brand presence and revenues.
Finally, PAOG has identified an area of long-term development involving RespRx, its CBD-based pharmaceutical product intended to support the treatment of chronic obstructive pulmonary disease. This product is derived from a proprietary method of extracting cannabidiol - U.S. Patent No. 9,199,960 entitled "METHOD AND APPARATUS FOR PROCESSING HERBACEOUS PLANT MATERIALS INCLUDING THE CANNABIS PLANT." According to industry analysts, the patented extraction process utilized by PAOG produces a high-quality extract that is close in form to that of a leading player in the industry, GW Pharma. This creates a great opportunity for PAOG to monetize the asset through licensing agreements, which would allow the company to generate significant profits from licensing out the extraction process with no additional work on their end. The RespRX platform is one of the key focuses of PAOG, and any positive news on its development is sure to raise the company’s share price.
PAOG Can Bring Near-Term Returns, Long-term Opportunity
The potential rewards offered by a long-term investment into PAOG may be worth your time and investigation right now. The company will be ready to commercialize the first product from its CBD Nutraceutical Development Program by the end of the year, and will be able to benefit from the upgraded logistical and delivery infrastructure offered by its partnership with Alkame Holdings, Inc. and North American Cannabis Holdings, Inc.
As a result of easing cannabis and hemp related regulations in the US, PAOG will be able to continue its ongoing CBD Pharmaceutical Development Program and potentially expand into previously unreachable sectors. The loosening of restrictions will expedite the process of bringing its nutraceuticals to market, as well as attract potential business partners that may have been wary to work in the sector earlier on. PAOG’s strategy of seeking out potentially lucrative business collaboration opportunities has already proven successful, and as the US continues to inch toward federal decriminalization, the company is sure to encounter new accretive partnerships to support its expansion.
Despite the pandemic's impact, PAOG is still positioned for massive growth in 2021. One of the company's most notable advancements this year include its securing of a partnership with Veristat, a contract research company (CRO) dedicated to the scientific advancement of therapies and treatments through regulatory approval. This partnership will prove instrumental in validating the underlying research for RespRX, helping to bring an effective product to market and begin generating revenues as quickly as possible. This is great news that could bring significant returns to investors in the near-term, as headlines featuring the product have historically sent the stock valuation soaring intraday.
With two new therapeutics in the works and an expansion of its research projects on the horizon, PAOG is in great shape to raise its share price in the coming months. Its robust pipeline and ability to target a fast-growing, billion-dollar market make it a great choice for investors at its current valuation. Its partnership with a CRO, its openness to new acquisitions and collaborations, and its long-term development strategy all combine to create a compelling investment thesis. PAOG has been gearing up for a strong 2021, and if the second half of the year continues going according to plan, 2022 and beyond could bring unprecedented gains for the company.
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