California is the single largest cannabis market in the world – and one of the fastest growing.
According to a new report from Arcview Market Research and BDS Analytics called, ‘The State of Legal Marijuana Markets’, California’s cannabis market is expected to jump above $5 billion by 2020.
Arcview isn’t alone. Fellow research firm Statista also expects big cannabis sales growth in California.
Cannabis companies establishing early industry leadership in California have the potential to ride a massive wave of growth in the next five to ten years.
That’s just one reason I’m excited about a hot new cannabis stock I am going to reveal today.
The other reason – it’s the #1 cannabis edibles company in the entire golden state. This is important because cannabis edibles are one of the fastest growing subsectors in the cannabis industry.
According to Arcview Market Research, spending on edibles in the US topped $1 billion in 2018.
With Canada set to legalize edibles this year and more US states legalizing medical and recreational cannabis, the cannabis edibles market is set to explode in the next four years. Arcview estimates annual sales of edibles in the US and Canada could hit $4.1 billion by 2022.
The bottom line? Early industry leaders in California’s high-growth cannabis edibles market should be killing it in the next five years.
That’s why I am excited to reveal the #1 cannabis edibles stock in California.
- This company sold more cannabis edibles in California in the Q4 than any of its competitors.
- It owns some of the most popular edible products in the market.
- It just entered the baked goods edibles vertical with an acquisition.
Plus Products, Inc. (CSE: PLUS, OTC: PLSPF) is California’s #1 cannabis edibles company according to a recent sales report from a well-respected market research company.
Plus started trading on the Canadian Securities Exchange on October 29, 2018, under the ticker symbol PLUS. I see average daily volume of around 100K so this ticker is plenty liquid.
I also see a US-based ticker symbol PLSPF with average daily trading volume of 54K, so this ticker is also plenty liquid.
Here’s why Plus is so interesting – the company just won the coveted #1 cannabibles company in all of California. This isn’t some frivolous win – Plus cannabis edibles generated more revenue than any other edibles competitor in the entire state of California.
Here are some more details directly from the press release:
Plus Products Inc. today announced that, according to BDS Analytics (bdsanalytics.com) retail sales data, during Q4 2018, PLUS again secured its position as the #1 best-selling cannabis-infused edibles brand in California and saw its lead over the #2 brand widen over the prior quarter.
According to BDS Analytics, during Q4, PLUS also had 3 of the best-selling branded products in all product categories including flower, vaporizers, edibles and topicals. PLUS “Uplift” and PLUS “Restore” remained the #1 and #2 best-selling SKUs. PLUS “CBD Relief” was the #5 best-selling SKU, and the top CBD-only SKU according to BDS analytics.
This impressive sales growth fueled impressive Q3 results for the period ending September 30, 2018.
Q3 2018 Financial Highlights
- Record Q3 2018 revenue of $2.56 million representing a 617% increase over the three months ended September 30, 2017, and a 60% increase over the previous quarter (Q2 2018).
- Retail sales of PLUS grew 104% quarter-over-quarter to $8.0 million in Q3, as measured and reported by BDS analytics.
- Q3 2018 gross margin of $0.38M (15%) compared to -$0.17M (-48%) in Q3 2017.
- Strong cash position of $11.1 million dollars at end of Q3, prior to the closing of CAD$20 Million IPO on October 26, 2018.
Plus Just Entered the Baked Goods Edibles Vertical
Plus continues to expand its product portfolio and enter into new cannabis markets.
In December, Plus announced it had acquired a leading cannabis baked goods brand.
Here are some more details from Plus.
Plus Products Inc. intends to acquire the assets of California-based cannabis-infused baked goods brand GOOD CO-OP, INC. (“GOOD”) in an all-share transaction.
• Represents a strategic entry for PLUS into the third largest edibles category, baked goods, after having reached the top position in edibles with only four full-time products
• The acquisition is valued at approximately CAD$2,030,000, to be satisfied through the issuance of 357,464 restricted subordinate voting shares of PLUS
• Approximately 90% of the deal consideration is subject to an earn-out against quarterly baked goods revenue targets, which total to approximately USD$5,900,000 in 2019 and $19,800,000 in 2020
• PLUS has secured an additional 4,800 square feet of manufacturing space and associated equipment in Northern California, which bolsters the Company’s current 12,000 square foot manufacturing facility in Southern California
Plus is up 80% Since Shares Began Trading on October 29
Plus is up 80% since going public in October. Shares have rallied big with the broader cannabis sector in 2019.
The Big Picture on Plus
Plus is in the right place at the right time. Plus is an early industry leader in California’s high-growth cannabis industry. I expect to see a ton of sales growth in the next few years.
Editor, Cannabis Stock Trades
About the Author & Cannabis Stock Trades
Michael Vodicka is an equity analyst with more than 20 years of experience in trading and investing. His research has been featured in some of the industry’s most respected publications.
He has been investing and leading investors in the cannabis sector since 2013. Now, Mr. Vodicka brings his expertise and guidance to the members of Cannabis Stock Trades.
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