On December 16, 2020 Pure Extracts Technologies (PULL.C) announced that it has begun to build out the 4th unit in its Pemberton, BC facility for the extraction of mushrooms and to begin R&D of psilocybin under a dealer’s licence.

Pure Extracts is targeting the commercial cannabis and psychedelics sector, backed by deep extraction and production expertise.

PULL’s facility uses cutting-edge CO² and ethanol extraction technology built for EU-GMP certification (allowing for international sales).

The objective is to produce “high quality, high purity formulations on a commercial scale”.

Solvent free, scalable production allows PULL to develop and deliver white-label formulations to service contract sales.

“White-label products and services are re-brandable, re-sellable items that are produced by one company to be rebranded and resold by another company,” states Vendasta, “White-label providers create a product or service to be rebranded by a reseller company so they can re-sell it as their own product to their end consumers.

Typically, the manufacturer surrenders the profit margin generated by branding, while avoiding marketing and distribution costs, and often gaining significant scale.

PULL is currently preparing an application to Health Canada for a Dealer’s Licence under the Controlled Drugs and Substances Act (CDSA), which provides, among other things, “the framework for legal access to controlled substances, and the control and regulation of production, distribution and sale of psilocybin”.

Under this framework, a company is required to obtain a licence issued by Health Canada in order to conduct various activities with controlled substances.

Licence holders are responsible for compliance with the CDSA and its Regulations as well as compliance with other applicable federal, provincial and territorial legislation and municipal by-laws. The issued licence dictates activities, conditions, and restrictions for the licence holder depending on licence permissions.

A Dealer’s Licence could allow for the following activities:

  • Procurement of controlled substances, including by import, synthesis, propagation, cultivation and harvesting of psychedelic mushrooms for psilocybin extraction
  • Research and manufacture of controlled substances such as psilocybin and psilocin
  • Business to business sale of controlled substances, including by export
  • Sale of controlled substance via pharmacies

The shroom sector has caught a tail wind.

Compass (CMPS.Q) – a $2 billion company – is developing COMP360, a psilocybin formulation in Phase IIb clinical trial to treat patients with treatment-resistant depression.

MindMed (MMEDF.OTC) – a $1.3 billion psychedelic medicine biotech co. – is developing a pipeline of treatments based on psychedelic substances, including Psilocybin, LSD, MDMA, DMT, and an Ibogaine derivative, 18-MC.

Field Trip (FTRP.C) – worth a couple of hundred million – is developing its own novel psychedelic molecule, FT-104, and plans to pursue FDA approval.

Pure Extracts – a new entry into this arena – still has a modest market cap of $50 million.

“As a plant-based extractor bringing functional mushroom products to market in Q1 2021, we are very excited to be building-out our facility for our move into the controlled substances world of psychedelics,” stated Pure Extracts CEO, Ben Nikolaevsky, “It’s great to have space adjacent to our cutting-edge facility which is built to Health Canada standards and to know that this space will also have the same high standards of construction that Pure Extracts prides itself on.”

Functional foods are ingredients that offer health benefits that extend beyond their nutritional value,” stated Healthline, “Some types contain supplements or other additional ingredients designed to improve health”.

According to The Economist Intelligence Unit global annual health spending reached $7 trillion dollars half a decade ago, and is expected to reach to $8.7 trillion dollars this year.

The “health and nutrition industry” is riding the mother of all of demographic waves.

Between 2016 and 2021, worldwide life expectancy is expected to rise from 73 years to 74.1 years. By 2021, the number of people older than 65 years will jump to 656 million (about 11% of the total population).

The market for functional mushrooms, CBD and THC edibles positions PULL to benefit from this macro-wave.

The 4th facility unit will allow PULL to do extraction research and development into psychedelic compounds such as psilocybin and psilocin.

Pure Extracts anticipates working with partners such as medical doctors, pharmaceutical company and pharmacies as clinical trials lead to the legalization of psychedelics and the advancement of micro-dosing in the near future.

In the November 6, 2020 video interview below, PULL CEO, Ben Nikolaevsky, speaks with Equity Guru’s own, Chris Parry, to outline the company’s cross market ambitions in plant-based extraction.

“To take part in the shroom sector won’t be a stretch for Pure Extracts,” wrote Equity Guru boss Chris Parry on November 28, 2020, “As they’ve said from the beginning their facility and expertise isn’t isolated to cannabis alone.”

“Extracting nutritional and nutriceutical elements from mushrooms is possible right now, without any changes to the law,” added Parry who is a PULL shareholder, “and in fact brings them into a $30+ billion dollar per year market, as things stand.

While multiple companies in the psychedelics sector have no real business to engage in until laws change, Pure Extracts can launch right in without any significant change to their model, or even to their facility.”

“It’s difficult to speculate on the size of a market for a product that hasn’t yet even been entirely formulated,” writes Equity Guru’s Joseph Morton on December 9, 2020, “but recent reports have the global market for functional mushrooms at USD$34.3 billion by 2024, growing at a compound annual growth rate (CAGR) of 8%.

Submission of the Company’s Dealer’s License application is subject to compliance with applicable securities laws, including any necessary approvals by the CSE.

  • Lukas Kane

Full Disclosure: Pure Extracts is an Equity Guru marketing client

Written By:

Lukas Kane

Lukas Kane was previously the CEO of a North American investment news syndicate. He was also the Communication Director for a consortium of publicly traded companies. A Senior Writer at Equity.Guru, Mr. Kane writes about mining, cannabis, energy, technology and biotech.

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