One of the most exciting trends in the cannabis industry relates to the emergence of brands and this is an opportunity that we have been closely watching. After Select, a leading cannabis concentrate company, was acquired for almost $1 billion (deal is not completed yet), we have seen increased interest in this vertical of the industry.
Plus Products (PLUS.CN) (PLPRF) is a leading California cannabis infused product brand that is focused on entering new markets across the US. The company has set its sights on the Nevada cannabis market and expects to start selling products in this market in the near future. We believe that Nevada is just the beginning of a major expansion and will be monitoring how the team is able to drive the story forward.
During the last year, Plus Products has been nothing short of an execution story and has been the top selling cannabis infused product in California for several months. The ability to capture significant market share in a competitive market like California is a major accomplishment and we expect to see the company replicate its success in markets like Nevada.
Executes on a Rebrand and Looks to Expand
When looking at what Plus Products has accomplished over the last year, there is a lot to be excited about and we are bullish on the growth prospects on a going-forward basis. From strategic capital to human capital, the company has been able to significantly strengthen its balance sheet as well as its management team.
Through a series of investments and acquisitions, Plus Products has been able to advance its fundamental story and is better positioned for success. From acquiring additional cannabis infused products brands to cannabis concentrate businesses, the company has been able to better streamline operations and enhance profitability over the long-term.
Last month, Plus Products re-branded its line of low dose cannabis infused edibles and the process was guided by market structure research from Henry J. Rak Associates and designed by Partners & Spade, an agency that has worked alongside brands including Peloton and Warby Parker.
Currently, dispensaries across the US offer products that fall under three main categories (indica, sativa, and hybrid). This structure can be confusing for consumers and Plus Products worked with experienced market researchers to better understand why people use cannabis. The rebrand goes beyond traditional categories and focuses on the science behind unique combinations of THC and CBD.
The intention is to create the right mix of cannabinoids paired with a targeted flavor profile to give the consumer one of the following experiences: Uplift, Balance, and Unwind. We are favorable on the way the company has differentiated its product from the traditional cannabis infused products and expect to see these products received well by the market.
Plus has Substantial Catalysts for Growth
In California, Plus Products sells the most popular cannabis edible in the state (according to BDS Analytics) and the products are available at over 300 licensed retailers. The company recently launched a new product (Plus Mints) and these products have been gaining meaningful traction across the state.
Over the next year, we expect to see Plus Products increase the number of SKUs in its product portfolio and we are bullish on this aspect of the story. The company has a pipeline of new product innovations that it will continue to rollout under the new streamlined and easy to understand design and we expect this to strong revenue growth as a result of this.
When looking at the potential catalysts for Plus Products, we believe that the entry into the Las Vegas market will be one of the most significant. Las Vegas has become one of the most attractive cannabis markets in the world and is one of the best destinations for cannabis companies that are looking to maximize exposure.
More than 42 million tourists visit Las Vegas on an annual basis and cannabis companies have been a major beneficiary of the heavy tourism. If a company is looking for a cost-effective way to reach the most amount of cannabis consumers, then Las Vegas is the place to be. Over the next year, we expect this market to prove to be a massive value driver for Plus Products and expect this to play an important role in how the company continues to expand into new markets.
A Growth Story On Our Radar
Plus Products is led by a management team that has proven its ability to capture substantial market share in one of the most competitive cannabis markets. The move into Nevada represents a major opportunity to advance the fundamental story from a revenue and awareness standpoint. We have visited the Las Vegas market on several occasions and believe that the company’s suite of premium cannabis products will perform well in this market.
Since inception, the cannabis infused product company has been focused on quality and this is a theme that reverberates throughout the entire story. We believe that the management team has had its finger on the pulse of the cannabis industry and are impressed with some of the large investors that are backing the company.
As Plus Products continues to expand across the US, we expect numbers to drastically improve and this is a trend that we are closely monitoring. We believe that Plus Products has significant catalysts for growth and have put the company on our radar following the recent decline. During the last quarter, Plus Products has been under pressure and this is trend that has been evident across the entire cannabis value chain. We believe that the current trend is transitory, and this is an opportunity that we are going to be watching.
We will continue to closely follow Plus Products and if you want to be added to our distribution list, please email firstname.lastname@example.org.
Pursuant to an agreement between StoneBridge Partners LLC and PLUS Products Inc. we have been hired for a period of 180 days beginning March 21, 2019 and ending September 21, 2019 to publicly disseminate information about (PLUS) including on the Website and other media including Facebook and Twitter. We are being paid $5,000 per month (CASH) per month for services rendered. We own 106,000 shares of (PLUS), which we purchased in via private placement. We may buy or sell additional shares of (PLUS) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information. On November 1st 2018 StoneBridge Partners LLC sold 50,000 restricted shares of (PLUS) to a private investor via a direct sale.