May 20, 2021 -- InvestorsHub NewsWire -- via Market Screener --
Despite its micro-cap size, PAO Group, Inc. (USOTC:
PAOG) continues to make significant strides to advance its
patent-backed CBD nutraceutical portfolio. Last week, PAOG
announced that at least three of its CBD Nutraceutical Products
will be released internationally in Q4 of this year. That brings
several near term milestones and catalysts into view. Better still,
it puts PAOG in a competitive position to capitalize on an emerging
CBD nutraceutical industry opportunity valued at $5.2
billion in 2020, and projected to grow to $16.4
billion by 2027.
The better news for PAOG is that its planned international
expansion is expected to cost less than originally planned, which
makes the move more impactful with the international markets
expected to deliver a significant portion of the company's total
CBD Nutraceutical revenues. Three products are in play.
The first is CBD RELAX-RX, targeting the multi-billion dollar
anxiety and depression market. The second nutraceutical is RespRX,
a late-stage development project expected to tap into the massive
COPD market. And its third CBD-based therapeutic, being developed
in conjunction with Puration, Inc. (USOTC: PURA) is EVERx
CBD Sports Water, seeking to take advantage of a substantial sports
nutrition sector where CBD infused products are earning greater
shelf space.
To facilitate what is expected to be a busy back half of 2021,
PAOG is working with Alkame Holdings, Inc. (OTC
Pink: ALKM) as a co-developer and North American Cannabis
Holdings, Inc. (OTC
Pink: USMJ) as its logistics partner to distribute its CBD
nutraceuticals into US and international markets.
The US market opportunity, by the way, is getting a boost from
legislation intended to lessen restrictions on the use of CBD. In
fact, at least 12 states have decriminalized its possession
entirely.
2021 Milestones In View
PAO Group, Inc. is coming to market at the right time, with
its mission benefiting from less restrictions in the sector. Newly
enacted cannabis reforms ease regulations and regulatory scrutiny,
which have an immediate effect on PAOG's ability to get its
products to market faster and with fewer logistical hurdles. Also,
the loosening of regulations is likely to attract new research
partners and prospective investors who were previously hesitant to
work in the sector due to existing laws. These changes should
benefit PAOG in more ways than just regulatory terms; they could
also pave the way for enormous growth throughout the rest of
2021.
In fact, PAOG's expansion is already well in progress. A
partnership with Puration, Inc. will facilitate
near-immediate growth by maximizing its use of a Texas-based
pharmaceutical-grade indoor hemp grow and CBD extraction facility.
Other partnerships with Alkame Holdings,
Inc. and North American Cannabis Holdings, Inc. also
add marketing and distribution expertise to its development and
commercialization ambitions. Thus, PAOG has the team in place to
get its products to market. And for a company its size, that's a
remarkable accomplishment.
Better still, with the cannabis-sector enjoying more mainstream
marketability, PAOG is better positioned than ever to capitalize on
substantial opportunities.
Video Link: https://www.youtube.com/embed/mlG8HDv06uk
Benefiting from Loosening Cannabis-Related Restrictions
In April, the Texas House of Representatives passed a
bill that legalized the medical and recreational use of cannabis.
That legislation benefits PAOG tremendously, especially with
CBD-based treatments gaining in popularity over traditional and
addictive pharmaceutical alternatives. And, while
President Joe Biden may only be in favor of
decriminalizing marijuana at this time, Senate Majority
Leader Chuck Schumer has called for the government to
move forward with full legalization efforts. Biden is expected to
sign bi-partisan legislation enacting the latter. For good
reasons.
According to a new Pew Research survey, 91% of people
in the United States think marijuana should be legal for
either medicinal or recreational use, with 60 percent in favor of
both. Though both can benefit PAOG in different ways, the
therapeutics side of the equation is the prize for PAOG. And
lucrative markets are in play.
PAOG's RespRx, for instance, a CBD treatment being developed to
treat Chronic Obstructive Pulmonary Disorder (COPD) targets a
multi-billion dollar treatment opportunity utilizing proprietary
extraction methods. That asset came through an agreement
with Kali-Extracts, Inc. (OTC Pink: KALY) last year. PAOG
also bolstered its commercialization efforts by recruiting
Veristat, a contract research organization (CRO) dedicated to the
advancement of therapies and treatments through regulatory
approval. That deal should accelerate commercialization of
RespRx.
2021 Could Be The Breakout Period
Indeed, PAOG generated considerable product development momentum
during the first half of 2021. The back half should be even better.
In fact, investors could expect to see at least one, perhaps three,
CBD-based products on the market. Accordingly, the stock is
responding well to its prospects, increasing by approximately 228%
since January.
Investors responded especially well to PAOG detailing its plans
to expand its CBD-based nutraceuticals line toward other
indications. As noted, PAOG is working on at least two treatment
candidates, both targeting vast and potentially lucrative markets.
Combined, its two treatment candidates are seeking to earn a
respectable share of a market valued at more than $25 billion.
Moreover, that market is expected to double in the next ten
years.
Keep in mind, too, that it's CRO, Veristat, is retained to
accelerate approvals for its development-stage products. That
benefit needs to be factored into the share price, especially since
it validates PAOG's pipeline. In fact, an update from PAOG
reiterated that Veristat has already made considerable progress in
validating and supplementing the underlying research for RespRx.
This is unquestionably good news in the near term, and additional
updates alluding to commercialization could ignite investor
interest.
A rally in April fell short of breaking resistance at
the $0.01 level. However, expected milestones on the
development and commercialization progress could translate into
2021 catalysts. And catalysts drive value.
Research Funding Powers New Opportunities
Notably, PAOG is not slowing its ambitions. In April, they
announced plans to complete a deal that would provide additional
research funds and a 25% stake in a cannabis extraction patent.
They also announced being in final talks to conduct a joint
research study involving CBD In Vivo Histological Research,
which will help to speed up the approval process for RespRx.
Additionally, PAOG will benefit from its 25% stake in the
underlying patented cannabis extraction technology, from which the
RespRx formula is derived. Better still, PAOG noted that it could
secure the right to buy the patent outright in the long term, which
opens up a variety of new revenue streams. Patented assets clearly
add firepower.
The excellent news is that PAOG's stake in the underlying
cannabis extraction method could generate massive long term revenue
streams. Noting that product analysts have said that the patented
extraction process yields an extract that is very close in form to
that of GW Pharma (NASDAQ:
GWPH), licensing and partnership opportunities could come in
the masses. That would translate to PAOG potentially monetizing the
asset through licensing agreements without ever taking their own
product to market. Those would be cash-cow agreements.
And don't underestimate PAOG's understanding of that asset. They
have noted that ownership of the technology would add long-term,
highly lucrative revenue streams. In fact, if Jazz
Pharmaceuticals (NASDAQ: JAZZ) purchase of bought GW
Pharma for $7.2 billion earlier in 2021 is any
indication, holding ownership to an effective extraction process
could deliver exponential rewards. .
A Lucrative Opportunity In A Substantial Market
Indeed, PAOG is well-positioned for near and long-term growth.
And they maintained that position despite the pandemic disrupting
almost every industry around the world. In fact, while other
companies slowed, PAOG actually added value by engaging Veristat,
purchasing new assets, and strengthening its development team by
working with PRCCI in Puerto Rico to speed up its
research and development processes.
Better yet, having two therapeutics in the works, complimented
by an expansion of its research projects, PAOG may be in its best
shape ever to increase shareholder value in the coming weeks and
months. The intrinsic value from its therapeutics alone is already
more valuable than the company's current share price, especially
from its inherent value to target a rapidly growing, billion-dollar
market.
In total, PAO Group has delivered a compelling
investment proposition. Taking into account multiple partnerships,
engagement with a CRO, ownership interest in a compelling CBD
extraction process, and near term commercialization for three
products, PAOG offers tremendous inherent value at a discount.
The best part is that investors could take advantage of low
share prices and maximize returns from what is expected to be a
busy back half of 2021. And if its aggressive development and
commercialization strategies remain on schedule, the returns could
be exponential.
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