It’s not intuitively obvious what was wrong with “the old look”.
During Q4, 2018 Plus had three of the best-selling branded cannabis products in all categories including flower, vaporizers and edibles.
According to BDS Analytics retail sales data, during Q4 2018, PLUS 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.
Getting new products onto shelves is difficult.
Getting new products to move off shelves is damn near impossible.
“American families, on average, repeatedly buy the same 150 items,” stated the Harvard Business Review, “Even Proctor & Gamble (PG.NYSE) routinely whiffs with product rollouts.”
Despite these challenges, California retailers cleared shelf space for PLUS’s new offerings, including “Mango CBD Relief,” which contains 4.5 mg. of CBD and .5 mg of THC in each gummy.
BDS Analytics also noted that PLUS “CBD Relief” was the top CBD-only SKU.
I know what you’re thinking: “Who the fo’ is BDS Analytics”?
We looked into that.
BDS Analytics is a cannabis market intelligence and consumer research company. There are some free articles available on the BDS website. PLUS pays a nominal fee to acquire additional data. Both PLUS and BDS confirmed to Equity Guru via telephone – that is the only financial relationship between the two companies.
Anyway, if BDS is bullshitting, that would show up in the financials, right?
- Revenues climbed to $3.2 million
- 274% year-over-year growth
- Gross margin grew to 21%
- Raised $17.9 million in capital
- Cash balance rose to $35.6 million
- Net working capital was $37.3 million
Gross margins reached record levels, climbing 890% over Q1 2018 and 62% over Q4 2018, thanks to continued operating efficiencies at the Adelanto plant opened in January 2018.
Given this bullish data, the PLUS chart must be almost vertical, right?
Not exactly. In 2019, cannabis investors drifted away from companies conquering the world one step at a time, into companies promising to conquer the entire world in one ravenous bite.
Jake Heimark, the CEO of Plus Products, recently spoke with Equity.Guru’s Guy Bennett about his “one-step-at-a-time” philosophy, the vital importance of dosing and why his 60 California factory workers have the best job security in America.
“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,” stated Heimark.
Which brings us back to the re-brand.
“Cannabis can be confusing. We hope our new system will help reduce some of that confusion,” stated Heimark, “We worked with experienced market researchers to find out why people use cannabis, then translated those findings into an easy-to-use system of cannabis. We are excited to help our customers Uplift their experiences, bring Balance to their everyday, and Unwind without getting unwound.”
Heimark isn’t just trying to drag black-market consumers to the legal market, he’s targeting virgin consumers who may not have tried cannabis. Converting those potential consumers is a process that currently entails friction. Heimark is trying to remove the friction.
The new system goes beyond the Sativa/Hybrid/Indica distinctions and focuses on the science behind combinations of THC and CBD.
“We believe this system will make PLUS even more accessible to new consumers, and we hope our investments in consistency and quality will keep them coming back,” stated Heimark.
Last month, PLUS obtained an option to purchase California-based cannabis oil manufacturer, Emerald Bay Wellness, for cash and stock considerations.
“Emerald Bay has been one of PLUS’s largest suppliers of cannabis oil for over a year,” explains Equity Guru’s Joseph Morton, “if PLUS exercises the option, it will give them the ability to extract cannabis-oils in-house, so they could manage their own quality control and increase margins on the core edibles business.”
PLUS cannabis infused edibles are available at over 300 licensed retailers in California and PLUS has a pipeline of new product innovations rolling out under the new design.
Full Disclosure: Plus Products is an Equity Guru marketing client.