It wasn't long ago that Jake Heimark, the 31-year old CEO of cannabis-edible company Plus Products (PLPRF) was fighting to save his company. Known for its cannabis-infused gummies, Plus was mostly limited to California -- and while consumers liked the product, the company was struggling. But this week, Plus shares popped when the company teamed up with superstar musician John Legend and mattress giant Casper Sleep Inc. to launch a line of CBD-infused gummies aimed at helping people with sleep problems and other ailments.
The news sent PLPRF shares 11% higher to close at $3.95 on Tuesday, although they gave back much of those gains to close at $3.64 (-7.9%) on Wednesday.
The high-profile deal represents a big win for Plus and Heimark, who not that long ago was just trying to keep the company afloat. "Three years ago, I couldn't make payroll. My top executives were taking pay cuts," the CEO candidly admitted during a symposium at this month's Green Market Summit in Los Angeles.
Heimark added that when asked why he took the company public before Plus seemed ready, he answers: "I had taken my parents' money, my friends' parents' money, my friends' money. I couldn't lose that."
In fact, the CEO not only took seed money from friends and relatives, but also runs Plus with his family's help. Heimark's dad is chairman of the board and chief strategic officer and also served as chief financial officer until May. Even Heimark's mother works with the company.
It was this commitment to family that helped draw Legend to the company. The singer was already a firm believer in CBD's benefits, but he's also an avowed family man himself. Legend and his famous wife, model Chrissy Teigen, fill their social-media accounts with images of family activities.
"We love the values of this company," Legend said this week at the new product's launch. "We love that they're committed to research, science and doing the work to back up the anecdotal claims that a lot of people think they know about CBD. They want to make sure people are taking the right doses. So, we really respect the values of this company."

Legend, Casper and Plus are teaming up to launch a nationwide line of hemp-derived CBD gummies that focus on three health reasons why consumers are drawn to CBD products in the first place. There are new Plus Balance gummies, Plus Uplift gummies and Plus Sleep gummies.
Consumers often buy marijuana for help with things like sleep problems. For example, one study found that consuming cannabis reduced REM sleep, which resulted in deeper sleep while cutting down on dreams (or nightmares, for those with post-traumatic stress disorder).
Plus gummies omit marijuana's psychoactive THC, but add in melatonin. The company believes that can give people with a lift, which sounds good to Legend.
"My very first album was called 'Get Lifted,' but I've never had a CBD partnership before. I've finally found a company that I really wanted to work with and grow with," Legend said at this week's launch party." Let's keep getting lifted."
The deal certainly lifted PLPRF's stock price on Tuesday, if only briefly. Canaccord Genuity analyst Bobby Burleson rates the company as a "speculative buy," with a C$8 price target ($6 in U.S. dollars at current exchange rates).
Burleson's estimates didn't include any sales beyond California, nor did they consider the company's new product line. But still, he wrote in a March note that "we believe successful expansion could drive as much as 100% upside to our estimates for revenue, and greater upside for EBITDA."
Overcoming Early Struggles
Plus currently has the No. 1 and No. 2 best-selling products in California, according to BDS Analytics. That makes it hard to believe the company ever struggled.
But Heimark readily admits the company made mistakes in the early days. For instance, Plus initially launched with a cannabis-infused chewing gum that didn't sell well.
Chewing gum continues to be a slow category for the industry, but gummies have proven quite popular. The company has also launched a line of mints, and late last year acquired a baked-goods company called GOOD.
But to make such a switch and grow the company, PLPRF needed more money. Fortunately, with all of the capital flooding the cannabis industry these days, it's difficult to imagine no one wanting to invest in Plus. Key investors came from Canada, but their caveat was that the company had to go public quickly so that backers could recoup their investment.
Over the longer term, Plus reported has reported sales of $3.5 million for 2019's second quarter. That's a nice jump over $1.5 million during the same period last year.