Plus Products (PLUS.C) CEO: “If you win California, you can win the world”

On April 2, 2019 Plus Products (PLUS.C) announced the launch of “Mango CBD Relief,” which will contain 4.5 mg. of CBD and .5 mg of THC in each gummy.

With considerable bravado, PLUS will retire its previous “CBD Relief” product, “Pineapple Coconut CBD Relief,” even though – according to BDS Analytics – it was “the top selling CBD edible in the California market in Q4 2018.”

“Mango CBD Relief is a reimagining of what it means to deliver a high-quality CBD experience,” stated said Jake Heimark, CEO of PLUS, “As one of the leading brands in California, the largest cannabis market in the world, PLUS is in a unique position to test products at scale.”

Heimark’s point about product testing is a valid one.

Without an existing distribution network and established brand loyalty – it is difficult for a start-up to meaningfully test a new product.

An edible-products CEO fighting for shelf space is often forced to use front-line retailers (store owners) for research.

“It’s awesome to get the buyer’s attention, but retailers aren’t your customer,” stated one marketing expert, “The retailer’s customers are the ones buying your product. By staying focused on consumers, you’ll get the feedback you need to found a fantastic food company.”

PLUS isn’t fighting for shelf space.

According to BDS Analytics retail sales data, during Q4 2018, PLUS again secured its position as the #1 best-selling cannabis-infused edibles brand in California and saw its lead over the #2 brand widen over the prior quarter.

PLUS had 3 of the best-selling branded products in all product categories including flower, vaporizers, edibles and topicals during Q4, 2018.

BDS Analytics also noted that PLUS “CBD Relief” was the top CBD-only SKU.

“American families, on average, repeatedly buy the same 150 items, which constitute as much as 85% of their household needs; it’s hard to get something new on the radar,” stated the Harvard Business Review, “Even Proctor & Gamble (PG.NYSE) routinely whiffs with product rollouts.”

Common product launch blunders:

  • The product’s key differentiators are not easily articulated
  • The launch is aimed at the wrong target audience.
  • A governing body (the FTC, the FDA) pulls the product.
  • The product has no trained spokesperson to educate the media.
  • The product is launched to capitalize on a fad that soon fizzles.
  • The product is priced too high for mass adoption.
  • Quality control issues result in negative on-line reviews.

PLUS plugs customer research back into its labs to make better products.  The company notes that “customers indicate they feel greater therapeutic effects from using CBD when they pair it with a small amount of THC.”

With only .5 mg of THC in each gummy the new CBD Relief formulation is not aimed at consumers “chasing a buzz”.

“The ‘standard dose’ of THC is considered to be 10 mg,” states Leafly, “But a cannabis newbie or low-tolerance consumer should start with half of that. You can always add another 5 mg in an hour or two once you’ve settled into the effects of your first dose.

The Mango CBD Relief gummy contains 1/20th of Leafly’s “standard dose”.

This writer has a constitution of a heroin addict. Any therapeutic outcome from .5 mg of THC would fall under the category of a placebo affect.

But not everyone is wired that way.

“Micro-dosing marijuana makes so much sense to me,” states one 3rd wave blogger, “Countless times I’ve wanted that sub-perceptual subtlety due to my given circumstances – and micro-dosing can now empower me to achieve this. Micro-dosers are readily going about their work days or looking after their kids”.

“We leverage our brand position to work directly with customers who love our products and develop new products based on their feedback,” stated Heimark, “With their help, we found that the inclusion of a small amount of THC and other balancing compounds in our CBD Relief product led to a consistently better consumer experience.”

PLUS recently published a 2018 revenue estimate of USD $8.4 million despite a challenging legal cannabis market, the company announced today.

“The company’s unaudited revenue represents 684% growth over 2017 when revenues reached $1.1 million,” wrote Equity Guru’s Ethan Reyes, “Q4 revenue is expected to reach $3.4M, a 32% increase over Q3 revenues and a 776% increase from Q4 2017.”

Mango CBD Relief is already available at some of the 250 retailers in California who carry the PLUS product line.

Direct feedback from consumers in California, which is the largest and most competitive cannabis market in the world, will enable brands like PLUS to have a significant product edge when launching products in other jurisdictions” stated Heimark. “If you win California, you can win the world.”

Full Disclosure:  Plus Products is an Equity Guru marketing client and we own the stock.

Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

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