On June 1, 2020 Plus Products (PLUS.C) announced the return of its best-selling limited edition rainbow sherbet cannabis-infused gummies for Pride 2020.
Plus is collaborating with the SF Queer Nightlife Fund to donate $1 per tin sold to provide direct financial relief to workers in queer nightlife in San Francisco who have been affected by the COVID-19 pandemic.
“Staying connected to our communities is more important than ever,” stated Jake Heimark, CEO and Co-Founder of PLUS. “In light of the COVID-19 pandemic, PLUS sought an opportunity to focus our impact on those within the LGBTQ community disproportionately affected by the financial hardships”.
How far that little candle throws his beams! So shines a good deed in a weary world. – William Shakespeare, Merchant of Venice.
According to the Globe and Mail, “About $1.5-trillion in assets are under some kind of responsible investing strategy in Canada – up 49% from two years prior.”
Forget: “Don’t be Evil”.
How about: “Do Some Good”.
Here’s a clear overview of Plus Products’ operations:
Based on the comments Equity Guru receives, we believe the majority of our investors gravitate toward companies with a moral compass – but there is always a hard-core group that only care about numbers.
So let’s look at Plus Products’ latest set of numbers.
Last Thursday, Plus Products released its unaudited financial and operational results for the three months ended March 31, 2020, expressed in U.S. dollars.
Q1 2020 Financial Highlights
- Net revenues climbed to USD $4.7 million in representing 46% year-over-year growth.
- Revenue growth driven by core operations in the California adult-use market.
- Nevada adult-use and national hemp CBD markets coming on line.
- Gross profits grew to USD $1.7 million – up 35% from a year earlier.
- Increasing operational efficiencies at the California factory.
- Operating losses were USD $2.1 million – a 31% improvement year-over-year.
- Cash Balance of USD $14.2 on March 31, 2020.
Q1 2020 Business Highlights
- In February 2020, Plus entered the wellness and relief California adult-use market with the introduction of its PLUS CBD Relief brand.
- The new PLUS CBD Relief products were designed with low THC and high CBD ratios to serve the roughly one-third of consumers in the market that are looking to cannabis for relief.
- The new brand has already been picked up by over 175 licensed retailers across the state.
- Executed workforce and salary reductions, and ended marketing agreements related to non-core businesses.
- In the first quarter, PLUS consumed USD $1 million in cash and cash equivalents with $14.2 million remaining on hand at March 31, 2020.
“The start of this year came with a number of difficult decisions,” stated Heimark, “The changes we made helped to cut our cash consumption to less than a fifth of what it was last quarter and, critically, doing so did not undermine our core business which grew more than 35% quarter-over-quarter.”
“To kick off this new strategic direction, we launched a second gummies brand, PLUS CBD Relief, mid-way through the first quarter,” states Heimark, “The new product line, which was developed with minimal capital investment and is designed to serve a subset of cannabis consumers not currently reached by the core PLUS brand, has already sold into over 175 licensed retailers.”
Heimark states that most of Plus Products’ 2020 growth initiatives will be centered around California. Last year CA made up an astonishing 38% of the global adult-use market and is expected to remain 24% of that market through 2024.
“With the two best-selling products in the state, and one of the largest brands in the California edibles market, we believe that we have established an exceptionally valuable position as a company,” stated Heimark.
“Plus Products makes gummies that are, without doubt, the best on the market,” confirms Equity Guru’s Chris Parry, “Reviews on WeedMaps show only one product with an average score of less than 4.2/5. They consistently win awards, they sell at a litany of dispensaries in California and, more recently, Nevada.
“PLUS has the gummy routine down nicely, so making a slight production line change to incorporate THC-free hemp CBD is a no-brainer – while also opening up the entire planet as a distribution option,” continued Parry, “No more hoping you can find enough new customers in Stockton and Oakland to make the business profitable, now you can play on a much bigger board, and in stores that don’t require ID to get into.”
“This will be the third year we have had the opportunity to partner with a local organization during pride month,” stated Mr. Heimark. “Last year we sold over 60,000 units and are looking forward to giving that record a run for its money this year.”
Good deeds, good products, good numbers
Full Disclosure: Plus Products is an Equity Guru marketing client.