Plus Products Inc (OTCMKTS: PLPRF) has unveiled, Mango CBD Relief, as it continues to strengthen its cannabis product line. With the launch, the company is poised to retire its bestselling Pineapple Coconut CBD.
The launch of the new product comes on the heels of the company forecasting revenues of $8.4 million for FY2018, representing a 600% increase.
PLPRF Share Price Analysis
Even as underlying developments continue to underscore significant growth, Plus Product stock has continued to edge lower after a stellar start to the New Year. The stock has come down tumbling after a 90%-plus rally to record highs of $6.01 in the first quarter.
A 30% plus pull back from all-time highs continues to spook investors. The steep pullback is staring at support at the $3.60 support level, a breach of which could result in the stock plunging further, back to the $3 mark.
A spike followed by a violation of the $4.50 resistance level should pave the way for the stock to make a run for its 52-week highs of $6.01.
About Plus Products Do?
Plus, Products is engaged in the development of cannabis products in California. The company develops cannabis-infused edibles for distribution in the regulated medicinal and recreational markets. The products are sold under the PLUS brand name to dispensaries as well as delivery service customers.
Refining Product Line
The launch of Mango CBD Relief underscores Plus Products push for value in the burgeoning edibles market. With the launch, the company is poised to retire Pineapple Coconut CBD, another best-selling edible.
The launch also underscores how Product Plus is slowly becoming a household name in California’s burgeoning cannabis edible marketplace.
“California’s consumers have made PLUS a leading cannabis brand in the State. Direct feedback from consumers in California, which is the largest and most competitive cannabis market in the world, will enable brands like PLUS to have a significant product edge when launching products in other jurisdictions,” said Jake Heimark, CEO of PLUS.
The launch could not have come at a better time given that Product Plus is fresh from reporting stellar preliminary results for the fiscal period ended December 31, 2018. With the company expecting revenues of $8.4 million for the full year, the same would represent a 684% year over year increase. Revenue for Q4 is expected at $3.4 million, representing a 32% increase.
Revenue growth throughout the fiscal year was mostly driven by sales of the Plus product line made up of four full-time SKUs and one rotational seasonal The unaudited financial results also indicate that the company’s balance sheet more than doubled to $22.9 million from $11.1 million.
“We are proud that in a year where the greater legal California cannabis market shrank and underperformed expectations, PLUS had significant growth in both revenue and market share. For the legal industry to grow and thrive, regulation needs to be uniform and clear so that businesses of all sizes can adapt, and we hope that in 2019 increased enforcement and regulatory clarity will help drive growth,” explained Mr. Heimark.
Canaccord Buy Rating
Buoyed by the underlying growth, analysts at Canaccord Genuity have initiated coverage of the stock with a Buy Rating. In a research note to investors, the firm has reiterated a share price target of C$8 for the stock.
The research firm remains bullish about Plus Products in part because of its two-top-selling products in the California edibles market. The two products accounted for about 8% of the categories of retail sales. With the company planning to expand its products beyond gummies, robust revenue growth should be the order of the day.
Expansion to other states is another development that points to a bright future given that until now; the company has been heavily reliant on California cannabis market.
Plus Products tumbling in the market does not paint an accurate picture of the company’s tremendous potential. The company is increasingly strengthening its product line with new cannabis edibles. Robust revenue growth of up to 600% also underscores a company doing exceedingly well when it comes to operational efficiency.
Canaccord Genuity initiating coverage of the stock with a ‘buy’ rating is another development that points to a bright future. With that in mind, a pullback from all-time highs might as well have presented an opportunity to invest in the stock at a discount, given Plus Products tremendous potential.
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Disclosure: We have no position in PLPRF and have not been compensated for this article.