CBD extraction firm, Puration Inc. recently bought CBD-infused Sun Care provider, Kali-Extracts reports news outlet, Muggle Head. While their initial goal was to become a leader within the hemp space, the firm later realized the best way to do so is to acquire CBD-related start-up companies with innovative ideas. As a result, Kali-Extracts caught their attention, making the latter the third acquisition this year. According to a previous press release, the company supposedly said:
“The campaign in intended to target a robust market of creative and promising young companies starved for investment in the waning 2019 cannabis capital market.”
As for the reason why Puration acquired Kali-Extracts, it has been revealed that this opportunity opens doors to the sun care market, which according to the news outlet is expected to hit USD$10 billion by 2024 from the current USD$8.5 billion.
Given that the firm has been recognized for its EVERx CBD-infused sports drinks, deemed a leader to date, it wouldn’t be a surprise if they use a similar strategy to take over that of the sun care market as well. This accomplishment supposedly comes after their decision to enter the cannabis cultivation market. Specifically, it was shared that,
“The spin-off of the cannabis cultivation operation is not a discarding of excess weight, but rather a divide and conquer strategy.”
Yahoo! Finance also covered this news, emphasizing that Puration prioritizes acquisitions that lead to royalty agreements in exchange. In particular:
“Management’s preference is to concentrate its investment funds on the rebranded sales and marketing of acquired assets and not the actual purchase of the asset itself.”
Besides creativity and royalty agreements, the firm will continue to seek acquisitions that can be easily absorbed into their existing production capacity and can benefit from their patented technology.