Alkame Holdings, Inc. (OTC PINK: ALKM) shares soared on Tuesday after news broke that the company is the likely co-packer for PAO Group, Inc.’s (OTC Pink: PAOG) CBD RELAX-RX nutraceutical product. The anticipated deal is also expected to leverage North American Cannabis Holdings, Inc.’s expertise (OTC Pink: USMJ) to help market the product.
The deal can be substantial, and investors reacted by sending ALKM shares higher by 38% on Tuesday after evaluating the potential impact the agreement could have on near-term revenue growth. CBD RELAX-RX is targeting the anxiety and depression treatment market, which is expected to deliver to the partnership group an $18 billion market opportunity by 2025. PAOG closed 38% higher on the day.
The news on Tuesday extends ALKM’s relationship with PAO Group, which is planning to develop and produce a variety of CBD nutraceuticals to treat multiple patient indications. Their initial focus is to create a CBD-based therapeutic for those experiencing issues associated with Chronic Obstructive Pulmonary Disorder (COPD). According to past releases, PAOG plans to use ALKM’s co-packing expertise to bring those efforts to commercialization.
The surge in price yesterday follows impressive gains made after ALKM announced advances to its proprietary water treatment technology.
Momentum Continues In March
The massive gain on Tuesday follows the impressive 7% spike made last week after ALKM announced the expansion of its proprietary water treatment technology. The increase there came after the company said it completed research and development stages for the enhanced technology and has filed for patent protection with the United States Patent office.
The strategic pieces are lining up well for ALKM in 2021. Not only are the potential agreements with PAOG a possible revenue-generating game-changer for the company this year on the co-packing side, but its significant advances in its proprietary functional water technology also add to the value proposition. ALKM noted that it has streamlined and improved its water manufacturing processes, resulting in a fluoride-free, alkaline water with a lower oxidation-reduction potential (ORP) and its highest-ever oxygen content. The result is a “good-for-you” water that has been shown to aid in lactate clearance after exercise, toxin removal, and decreased recovery times.
The co-packing deals are channeled through ALKM’s wholly-owned subsidiary West Coast Co-Packer, Inc., which has also been busy. At the end of February, an announcement highlighted its initial purchase order for Handout Protection hand sanitizer and wash combo single-use packets. That agreement was made with their Canadian Personal Protection Equipment (PPE) distributor, TheraProducts Canada, Inc. Expectations are that product sales will continue to grow.
In fact, Handout Protection could qualify as a best-in-class product after demonstrating effectiveness in killing known COVID-19 strains and the new coronavirus variants known to spread 50% quicker than COVID-19. Moreover, it’s one of the few portable hand wash and sanitizer packets that allow people to wash and sanitize their entire hand.
Better still, unlike traditional wipes, Handout Protection enables users to clean not only their palms but also the tops and sides of the hands, including the fingers, under the nails, and up to the wrist to fight and kill bacteria and germs. And, even as the pandemic gets put under control, it is unlikely that demand for effective sanitizing and germ-killing products will decline. That’s excellent news for ALKM.
Additional Opportunities In-Play
Several opportunities are in play for 2021. Already, ALKM is expecting to generate value through its exposure to health and wellness products, its aquaculture water treatment division, an interest in CBD co-packing services, and its plans to enter the billion-dollar pet health and wellness sector. A potentially huge deal in development could have the company exploit the massive opportunities developing in the industrial-use hemp markets. That focus aligns ALKM with other publicly traded companies.
Other deals can accelerate near-term growth. An agreement with PAO Group, Inc., for instance, positions ALKM to capitalize as the co-development and distribution partner for PAOG’s emerging nutraceutical product line. Another deal brings the company together with North American Cannabis Holdings, Inc. (OTC Pink: USMJ) to revitalize its interests and investments in the cannabis and CBD space. ALKM is expected to benefit from several recently announced USMJ initiatives that target broad opportunities in the cannabis sector. Details on that partnership are expected soon.
Current projects have ALKM, through West Coast Co-Packer, Inc., expanding its agreements with Puration, Inc. (OTC Pink: PURA) to enhance its services as the bottler of EVERx CBD-infused Sports Water. There, ALKM is taking action to grow the partnership and collaborate to market multiple new CBD-infused consumer products. The two are already planning to develop, produce, and test market a CBD-infused liquid sugar and a CBD pet food supplement. Other products in the early development stages include CBD-infused consumer products and hemp-derived beverages and edibles. Keep in mind that PURA announced that sales of EVERx CBD-infused should surpass $2 million in 2020. That report is imminent and reflects well on ALKM as its bottler.
From an investor’s perspective, the best news about ALKM is that they appear to be positioned to deliver value on a near and long-term scale. Thus, while investor’s wait on long-term development projects, they still benefit from growth through PURA’s EVERx and PAOG’s nutraceutical and CBD-based initiatives in the near term. Moreover, their patent-pending technologies can also bring value through licensing opportunities.
Notably, there is a tremendous amount of untapped inherent value from its more than ten subsidiaries and ALKM’s willingness and ability to seek out and benefit from emerging opportunities. Therefore, the spike in price on Tuesday may be a prelude to more significant moves to come. After all, with multiple shots on goal in billion-dollar markets, ALKM is positioned for numerous catalysts that could deliver exponential returns.
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