- 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://ibn.fm/g9qEv). 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
NOTE TO INVESTORS: The latest news and updates
relating to PLPRF are available in the company’s newsroom at http://ibn.fm/PLPRF
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