PAO Group, Inc. (OTC: PAOG) may be consolidating at $0.005, but technicals show the stock gearing up for a move higher as the RSI and MACD indicate that the stock's pause may be coming to an end. That could mean that while its 47% share price increase is impressive, investors may be in store for significantly higher gains in the coming weeks. The best part of that assumption is that PAOG has the goods to back up its case for higher share prices.
In fact, over the past three weeks, PAOG has commercialized two CBD-based nutraceuticals through its distribution partner North American Cannabis Holdings (OTC Pink: USMJ). Even better, they are expecting to launch a third. Not only that, on Monday, PAOG said it's adding bioidentical synthetic CBD to its overall research initiative.
By doing so, PAOG is tapping into a massive CBD extracted from hemp market. And as hemp legalization continues to gain national and global traction, so do the opportunities for its use to develop novel CBD therapies. The secret has been out for a while. CBD works and is helping millions of people.
And the more excellent news for PAOG investors is that since last month the company has put two products on the market with more on the way. From a revenue-generating perspective, things are starting to click for PAOG. And the trend is expected to continue.
Expanding Its CBD Opportunities
Part of its move into the bioidentical CBD research is that it puts potential CBD pharmaceuticals into its product mix. It also adds value to its nutraceutical initiatives. But beyond that, PAOG is showing it can leverage its IP to create shareholder value. Keep in mind that the pharmaceutical side of the sector can be enormous. And Jazz Pharmaceuticals' purchase of GW Pharma for $7.2 billion earlier this year highlighted the power of owning IP.
And PAOG's IP is proving its worth. It led to PAOG announcing it's on track to introduce a third CBD nutraceutical product by year-end. That one will follow the launch of its first two CBD nutraceutical products, RelaxRX CBD, a sleep aid, and RehabRX CBD, a salve. By the way, the launch was met with strong demand. PAOG noted a sell-out of its first run, creating the need for a second round of production. The products are available at www.USMJ.com.
Indeed, that's excellent news. And revenues should be impressive too. The better news is that PAOG is putting in place a revenue stream that could be substantial over time. An initial sell-out is welcomed news. Now, if PAOG can stock the shelves, revenues have the potential to soar. An update in Q4 will provide investors the first glimpse of how this sub-penny stock could transform into an impressive revenue-generating company with multiple products on the market.
Perhaps the better news is that PAOG isn't planning to slow down. They have also entered into agreements with Alkame Holdings (OTC Pink: ALKM) to develop a CBD-based line of women's health products. Alkame can deliver packaging and logistical support to the initiative. There's still more in the pipeline.
As noted, PAOG is also evaluating how to leverage its IP to create a synthetic CBD. The research is focused on the many common over-the-counter supplements such as vitamin C and D, which are not organic compounds but instead synthetically produced in a lab. Even though they are not derived from natural resources such as fruit, they are nevertheless bioidentical to the natural compounds. PAOG is following the same concept.
In fact, they expect to produce Synthetic CBD in the same way. But, it's important to note that the synthetic CBD has the potential of being more "pure" by having fewer contaminants from the extraction process and less presence of other and conflicting cannabinoids. PAOG highlighted that it will rely on a technique that provides a more consistent CBD structure. Hence, from several initiatives, it's all systems go for PAOG.
Better still, they are gaining operating momentum by adding new pharmaceutical products to their development pipeline in addition to the ongoing development of its RespRx CBD pharmaceutical for the treatment of Chronic Obstructive Pulmonary Disease (COPD).
That product, by the way, can be significant, and PAOG said it's conducting an in-depth review of its current RespRx CBD pharmaceutical development project with its CRO partner, industry consultants, and pharmaceutical firms to explore options and opportunities to accelerate and diversify development processes.
As part of the in-depth review, PAOG announced it's considering a partnership opportunity that could accelerate the development of its RespRx CBD. Notably, that review has helped PAOG identify derivative opportunities that could instigate the development and launch of additional pharmaceutical product development projects. The most excellent news is that PAOG plans to pursue development programs that have fast-track potential with the chance of a pharmaceutical product reaching the market before RespRx. Hence, the remainder of 2021 and 2022 can be a period of transformational growth for the company.
And these opportunities are targeting a massive and growing CBD market.
$5.2 Billion CBD Market
In fact, the market is surging as patients migrate away from narcotics, especially opioids, and instead embrace CBD for its effectiveness over addictive drugs known to cause severe unintended side effects. That migration has changed the CBD nutraceuticals space from relatively obscure only a few years ago to a more than $5.2 billion market today. Moreover, it's expected to potentially double over the next five years. Thus, with PAOG bringing products to market during the industry's initial growth, they have an excellent opportunity to earn market share ahead of those late to the game.
Best of all, PAOG has other business interests, including a potentially significant interest in a hemp business in Texas. But, as those develop, focusing on its current marketing opportunities may be best. After all, they are the revenue drivers contributing to what could be a record-setting Q4.
Rally Into EOY 2021
Thus, it may be time to put on the PAOG rally caps. After all, PAOG has officially transformed from a development stage company to a commercialization one. Better yet, it's gone from two nutraceuticals on the market to having a third in the queue. And if that wasn't enough, PAOG has set expectations for more products to follow, putting potentially exponential growth in the crosshairs for next year.
Indeed, PAOG is now positioned for multiple revenue-generating wins. Moreover, they have added diversification to mitigate risk on the production and distribution side by keeping revenues flowing. And by focusing on new opportunities to leverage the power of its IP portfolio, an additional revenue source could soon be put into the mix. Thus, while two October surprises sent share prices higher, updates so far in November indicate there's plenty more to come. If so, at current levels, PAOG stock could be quite a bargain.
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