- PLUS well-prepared to respond to current coronavirus crisis, says CEO
- Strengthening PLUS presence in the California market remains critical to becoming global cannabis brand
- When objectives are met, few companies will be better positioned to build global portfolio of cannabis brands
Plus Products Inc. (CSE: PLUS) (OTCQX: PLPRF) has identified three critical objectives to focus on in the coming year, according to a letter from PLUS co-founder and CEO Jake Heimark (http://cnw.fm/QVv51). The letter outlines those objectives and also discusses COVID-19 and the impact it is expected to have on the company.
After observing that the company is “well-prepared to respond to the current coronavirus crisis,” Heimark noted that the company “continues to have a strong foundation as a leader in the California cannabis market.”
“We have set three critical objectives as a company over the next four quarters,” he stated. “1) to ensure the safety and health of our employees and customers, 2) to continue to establish ourselves as a clear, long-term leader in the California edibles space and 3) to become a cash-flow positive business.”
Heimark then went on to explain that PLUS is “capitalized with enough cash on hand to continue executing through the entirety of 2020 without any additional fundraising.” Heimark noted that “Plus Products was the largest brand in the largest category of the California edibles market in 2019, and had the two best-selling cannabis products, across all categories, in the state over that same period.”
In his letter, Heimark explained that, in 2019, the state’s emerging adult-use cannabis market was 38% of the global adult-use cannabis market, and it is expected to stay at least 27% of that market through 2024. “Edibles remain the most attractive space to build a brand, with price premiums remaining constant, while other categories continue to see significant price degradation,” Heimark said. With that in mind, it makes sense that maintaining – and even building – the PLUS presence in the California market remains critical to becoming a global cannabis brand, he concluded.
Calling 2019 a difficult year for the entire cannabis industry, Heimark observed that “macro events – ranging from the vaping crisis to slow growth in emerging markets – contributed to underwhelming results and immense pressure from the market on operators across the board, a pressure that has continued to impact the industry into the new year.” Heimark acknowledged that PLUS hadn’t escaped the challenges.
“We have faced a home market in California that continues to battle growing pains as it works to compete with a highly active illicit market, streamline a disorderly regulatory environment, and support undercapitalized operators across an adolescent supply chain,” he said. “As a result, growth has been less robust than anticipated, and we were not spared from the broader market downturn.”
With that in mind, the Plus Products leadership team made adjustments to the business to ensure that the company is in the ideal position to survive – and succeed – in 2020 and 2021. Those adjustments included executive salary reductions, executive reorganization, general personnel reductions, the conclusion of the John Legend engagement and an employee equity incentivization restructure. “The decisions made were driven by a strategic commitment to prioritize growing our footprint in markets in which we are already operational over entry into new markets, with a particular focus on our home state of California,” Heimark explained.
“PLUS has built one of the most successful brands in the world’s largest cannabis market,” he concluded. “Moving ahead we intend to build a strong portfolio of edibles brands, leveraging our core capabilities in markets where we have established distribution channels and a dedicated customer base… We believe that we have a clear path to achieving our three critical objectives set forth above. If we do, there will be few, if any, companies better positioned to build a global portfolio of cannabis brands. And while these are uncertain times, we know that we will emerge from this moment in time together.”
Headquartered in San Mateo, California, PLUS is a cannabis and hemp food company focused on using nature to bring balance to consumers’ lives. PLUS’s mission is to make cannabis safe and approachable, beginning with high-quality products that deliver consistent consumer experiences.
For more information, visit the company’s website at www.PlusProducts.com
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