Puration Inc (OTCMKTS:PURA) Wants To Be The Starbucks Of Cannibis Consumables

Our coverage has been overwhelmingly cannabis related today, and in the wake of the recent news out of California and Nevada, it's no surprise. A brand new billion-dollar market is literally forming as we speak, and there are opportunities everywhere. Low hanging fruit remains left and right, and as cannabis investors, there's plenty of potential to piggyback on the growth of companies taking advantage of this low hanging fruit near term.Here's a company that has been a bit of a wild ride over the last year or so, but should start to pick up pace as we head into the close of 2016, and that is currently available at a 15% discount to highs registered just last week.The company in question is Puration Inc (OTCMKTS:PURA).Readers may have come across this one before, and those that have, will probably be wondering what it's got to do with the cannabis industry. The answer is that – just as have a number of fast moving small caps over the past six months or so – Puration has introduced a cannabis based product and, in doing so, has staked a claim in the sector.One primary difference between Puration's claim and those of numerous other entities is that Puration's product falls in line with its legacy operations, and as a result, has far less tenuous a link than many of its peers. We'll get to this in a little more detail shortly, but first let's run with a brief introduction to Puration.The company is a Texas based water purification company, which (according to its own bio) designs, develops, engineers, produces, markets and distributes personal and group systems that filter, purify, clean or extract water. It's basically got a bunch of products and patents surrounding the water purification retail space – think water pouches, bottles, at-home containers etc.That's the legacy stuff.Now, it's focused on two things – one, cannabis extract infusion into other companies' consumables (specifically drinks) and the creation of its own brand of drink that contains its extracted material. The company basically used its current purification and extraction technology to remove the active/flavor compounds from cannabis, and mixes it with a liquid to create a branded product.Current focus is the medical marijuana market (at least it was based on management last addressing markets, but that was before recreational legalization got the green light, so we assume a shift in focus here) and dispensaries that retail associated product.Management put out a very vague revenue forecast a few months ago, suggesting that Puration will bring in $3 million revenues over the next twelve months, which would put an outside target on this period of end July 2017, based on the commercialization of the above two applications of its filtered infusions. We think that's optimistic, but it gives us a framework on which we can at least stretch to issue a valuation.The company is worth very little right now, based on to-date operations. A market cap of $2.1 million is probably generous, given that it's not generating any sales on legacy products and the shift into cannabis infusion is only just underway. However, it's got the potential to expand quickly into a market that is going to open up to all sorts of variations on cannabis and cannabis consumables, and so we think that medium term there's some potential here.What are we looking for to confirm this potential?We need to see some decent size distribution deals for its infusion ingredient hit press. Yes, there's probably some potential in the distribution of its own branded product, and there's even a chance the company will bring in the $3 million sales it's looking for during the first half of next year. What's really going to make its market cap take off, however, is a deal with a national consumable producer that agrees to give its cannabis infusion ingredient a go. With recreational use just around the corner, this isn’t too high a moonshot, and we like this one as a punt going forward.In a recent release, management stated it wanted the company to be the Starbucks Corporation (NASDAQ:SBUX) of the space. There's a ways to go yet (let's get some sales on the board first of all) but the truth is that the Starbucks of this industry is out there, and is likely a micro with big ambitions. We're not sure that PURA is the one, but it's a level playing field.We will be updating our subscribers as soon as we know more. For the latest updates on PURA, sign up below!Disclosure: We have no position in PURA and have not been compensated for this article.