Ground water.

"Ground" water like "ground" coffee beans. It absolutely is a pun.

You said you don't see the joke. You didn't say anything about it being funny.
You might not believe it, but jokes aren't defined by being funny, as funny is subjective. So if you understood the meaning on the face of it, you saw the joke. You just don't think it's funny. That's you, not a joke problem.

Then you said it's not a pun. That immediately indicates you didn't actually get the meaning on the face of it.
It is a pun. Specifically a homonym. One which it seems, was too deep for you. That's another homonym pun.

Edit: There it is! Congrats

The pun is that 'ground' can be a noun meaning 'soil, earth' as in playground or underground, or the past simple and past participle of 'grind' as in ground coffee or ground meat.

yes.