Why Puration Inc (OTCMKTS:PURA) Shares Surged 200%

Cannabis Sativa

Puration Inc (OTCMKTS:PURA) shares were up 229.25% on Tuesday to $0.0484 and down 44.21% in after-hours trading on profit-taking. Share prices have been trading in a 52-week range of $0.00 to $0.09. The company has a market cap of $750,000.00 at 50.15 million shares outstanding.

Formerly known as Southwest Resources Inc, Puration Inc is a water purification company that designs, develops, engineers, produces, markets and distributes personal and group systems that filter, purify, clean or extract water. It has  developed, acquired and licensed technology in the fields of water filtration and purification and its operations consist of the design and production of personal-use water filter bottles and other containers.

In light of the progress in cannabis legislation, Puration Inc has also been  in the process of developing new business opportunities focusing on the Cannabis Extractions Sector. Earlier in the year, the company announced that it has entered into its first food and beverage collaboration with Colorado-based ScumpDelicacies to produce and co-market THC and CBD infused beverages. This was the first out of three agreements that the company had lined up with other food and beverage firms.

Puration Inc has been continuously developing ways to infuse cannabis extracts into regular food and beverage products, such as chips, ice cream, and soda. In particular, the company has been standardizing a repeatable process to produce consistently high quality extract over the past year to make it ready for use once cannabis is legalized in more states by next month.

In a press release yesterday, Puration Inc announced the EVERx CBD infused water line for the health conscious bottled water consumer market. The company is targeting an initial $1 million in 2017 sales of EVERx CBD infused water, with a lot of potential upside given the size of the bottled water market, which is around $157.27 billion in 2013 and is expected to reach US $279.65 billion by 2020 according to Transparency Market Research.

Puration Inc has already partnered with North American Cannabis Holdings under their  EVERx Sports and Fitness Nutritional Supplement Brand Name. Also, the company has contracted with Alkame Holdings to create a variety of flavored EVERx functional waters infused with CBD, which is extracted through Puration Inc’s proprietary process.

These products will be targeted to athletes looking to enhance their performance, as CBD can substantially reduce recovery times and increase cardio output. Apart from that, CBD infused products can also target the general public that is becoming more aware of the health benefits of these products, such as mitigating diabetes risk and reducing cancer cells.

The daily time frame of Puration Inc shares nicely illustrates the pop higher after the stock bottomed in September. Price broke past the near-term resistance at $0.02 then enjoyed strong upside momentum as investor interest caused volumes to surge yesterday. From here, price could be in for a quick correction as traders book profits off the recent rally, although there is still longer-term upside potential all the way up to the $0.09 area.

Of course a lot hinges on the outcome of the November 8 polls, as positive updates for the cannabis industry could mean a strong rally for Puration Inc stock and for other related companies. On the other hand, setbacks to legislation could spur reversals from these rallies as this would keep the market for CBD products limited, thereby weighing on the companies’ profit potential.

DISCLAIMER: There is a substantial risk of loss with any speculative asset, especially small cap stocks. The opinions expressed are those of the author, and do not constitute recommendations to buy or sell a stock. Do your own research before committing capital.