Apr 7, 2021
Operator
Good day and thank you for standing by, and welcome to Plus Products Fourth Quarter and Full Year 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode.
After the presentation, there will be a question-and-answer session. [Operator Instructions].
I would now like to hand the conference over to your speaker today, Cole Stewart, Investor Relations Manager. Please go ahead.
Cole Stewart
Thank you, operator. Good afternoon, and welcome to the Plus Products fiscal 2020 fourth quarter and full year financial results conference call.
A replay of this call will be archived on the Plus Investor Relations website at plusproductsinc.com. Before we begin, please let me remind you that during the course of this conference call, Plus' management may make forward-looking statements.
These forward-looking statements are based on current expectations that are subject to a number of risks and uncertainties that may cause actual results to differ materially from expectations. For more information on the company's risks and uncertainties related to these forward-looking statements, please consult the company's MD&A, press release and other regulatory filings available at sedar.com.
Any forward-looking statements should be considered in light of these factors. Please also note any outlook we present today is as of today and management does not undertake any obligation to revise any forward-looking statements in the future.
In addition to the financial information presented in this call, please review the company's 2020 audited financial statements, press release and associated notes filed on the company's SEDAR profile to www.sedar.com. With me on the call today are Mr.
Jake Heimark, Co-Founder and Chief Executive Officer and Mr. Nate Pearson, Chief Financial Officer.
With that, I'd like to hand the call over to Jake.
Jake Heimark
Thank you, Paul and good afternoon to those joining us. Our highest priority at Plus continues to be protecting the health and safety of our employees, our customers and our partners.
For detailed information on the steps we continue to take in response to the COVID-19 pandemic, please visit plusproductsinc.com/coronavirus. Now, onto our highlights for 2020.
At the outset of last year, we detailed our goal to rein in costs and set Plus on a path towards profitability. We knew that 2020 in the cannabis industry would be defined by companies that were able to effectively transition from grow-at-all-cost efforts to strategies that allow companies to capture sustainable growth while leaning on a foundation of solid fundamentals.
In pursuing this goal, we drastically reduced our cash consumption by 85% year-over-year to just $3.6 million for the full-year 2020 and were able to expand our gross margins significantly from 20% in 2019 to 30% in 2020. These changes to the core economics of the business, along with the $11.6 million in cash on hand to close the year and recent 3-year extension to the term of our debentures, have greatly expanded our runway to continue executing on our growth efforts at Plus.
Despite the substantial improvements on the cost side, we were still able to achieve 15% growth for the full-year 2020. While our top-line performance in the final quarter of the year was not what we had hoped, we have made two important transitions to the business that we believe will set us up well to continue capturing growth in 2021 and beyond.
The first was the company’s shift over the last year from a single brand to a portfolio of brands. In making this shift, we expanded our product offerings to ensure that consumers looking for all different types of experiences can turn to Plus for their cannabis needs.
This transition, which incorporated the introduction of products targeted at specific cannabis use cases such as wellness, relief, and sleep, are increasingly relevant as consumers in our industry grow increasingly sophisticated in their choices. The second was the company’s recently announced transition to a self-service distribution partner, which was coupled with an expansion of our sales team and internalization of all account management.
Despite the success we have had with our full-service distribution partners, in which we relied on a hybrid of both internal and external personnel to make up our sales force, we believe that the most effective way for us to achieve the broadest distribution for our products is to have a member of the Plus team representing the company at every interaction with our retail customers. This transition will make that a reality across the entire California market.
With one the strongest cannabis brands in California, a robust product portfolio, plenty of cash on hand, and a recently expanded sales team, we believe Plus is in a position to excel over the coming year. With that, I would now like to hand the call over to Plus' Chief Financial Officer, Nate Pearson, to discuss the financial results of 2020 in greater detail.
Nate Pearson
Thanks, Jake. Net revenues climbed to $15.9 million in 2020, representing 15% year-on-year growth, as compared to 2019 net revenues of $13.9 million.
Net revenues were $3.1 million in Q4 2020. Q4 net revenues were lower than anticipated due in part to the company's previously announced transition to a self-service distribution partner in early Q1 2021, which resulted in the return of inventory originally sold to its prior distribution partner in Q4 2020, along with higher than anticipated promotional costs.
Looking forward to the first quarter of 2021, the company does expect net revenues will be negatively impacted by a significant one-time accounting shift in which Plus will move to recognizing revenue at the time its products are sold to licensed retailers for all sales occurring through the company’s new self-service distributor. Previously, the company recognized revenue at the point in which inventory was transferred or sold to its full-service distribution partners.
The shift will result in an effective delay in the time at which all sales of products through the company’s new distributor are recognized relative to sales that occurred to its previous distribution partners Gross profits during 2020 grew 104% to $5.6 million compared to $2.8 million in 2019. Gross profit margin in 2020 was 35%, up from 20% in 2019.
And gross profits reached just under $1 million, $950,000 in Q4 2020 compared to $900,000 in Q4 2019. Gross profit margin in Q4 2020 was 30%, up from 26% in Q4 2019.
Operating losses were $8.3 million in 2020, representing a 67% improvement year-on-year from $24.8 million losses in 2019. In Q4 2020, those losses were $3.4 million, which was a 59% improvement year-on-year from $8.2 million in losses in Q4 2019.
The company reported $11.6 million in cash and cash equivalents at December 31, 2020. Cash and cash equivalents fell by $3.6 million during the year.
With $1.5 million in semi-annual interest payments occurring during the year, the company consumed just $2.1 million in cash from normal operating and investing activities for the full year 2020. With that, I'd like to hand the call back to the operator to open the lines for questions.
Operator
[Operator instructions] We have a question from the line of Jason Zandberg with PI Financial.
Jason Zandberg
Thanks for taking my questions. First of all, I just wanted to maybe dig a little bit deeper in terms of that -- the transition that you talked about your distribution.
Can you just talk about the strategy behind that? Is this to expand the number of doors you're selling through?
Is it to go deeper in some of the more high volume dispensaries? Sort of what's the strategy going forward here in terms of what you expect to get out of this change?
Jake Heimark
Hi, Jason. Thanks.
And the strategy of switching our distribution partner to a place that we own it is based around the -- both driving us into new doors, we're at about between 250 to 300 stores a quarter, while most -- many of our competitors are in -- somewhere in the 450 to 600 range, depending on the competitor. And that's one opportunity for us to expand more is to have our sales team actually able to reach those stores and be directly in control of placing the order and have someone else be fulfilling it.
And so, really excited about that opportunity. But just as you called out, our ability to go deeper with the accounts that we already have, Jason, is quite significant.
One of the things that we found with full-service distribution partners is that although there are advantages to having other brands that carry along with us, we were having some difficulty between the time that we were making the order and making sure it was actually fulfilled in the stores, and was actually preventing us from making sure we were always in stock on the shelves. And it's something that we think that the transition to our new partners can really help us make sure we're always on shelves and as many shops in the space we can be.
Jason Zandberg
Perfect for what it's worth. I agree with this new strategy.
Second question. Just in terms of growth initiatives in FY'21, any thoughts about expanding geographically into other states?
Additional product launches? Is there anything you can comment in terms of growth initiatives here going forward?
Jake Heimark
No material updates on partnerships across other states to share today, but I will say the cannabis landscape has changed dramatically in the last year. We're seeing legalization and regulations being passed everywhere for many places in the U.S.
from New York to New Jersey, as well as Mexico today had some more announcements. So we are talking with many companies about partnerships in all of the above and look forward to hopefully having an announcement around those partnerships sometime in the future.
I think what's key to understand about the way that we think about partnerships at Plus is that we've seen a lot of companies find a lot of deals in many jurisdictions but then actually not live up to the promises with those. And we’ve had a good test run in Nevada where we know that if we manufacture our product well, that we actually stay on shelves and customers do value the product that we make, and that creates some brand resonance for us.
So, we're looking to replicate that as we go into other places.
Jason Zandberg
Okay, great. And then, is it -- would it be possible to get an update on your Nevada operations?
I know it's a small portion of your overall sales, but just wanted to see if we could get a little bit of an update on what's happening with that State?
Jake Heimark
Nevada is I'm sure, struggled a lot with the original coronavirus lockdowns, and lack of tourism to that State. We're still operating there with TapRoot, who is our partner in Nevada.
The partnership is going well, and we've had some production. I can follow up Jason with the specific numbers for the Nevada.
Operator
Thank you. And I would like to turn the call back to Jake Heimark for his final remarks.
Jake Heimark
Thank you, operator. And thank you all for joining our call today and for the ongoing support of the company at this pivotal time in our development.
With that, I will turn the call back to the operator to close the lines.
Operator
Thank you. And this concludes today's conference call.
Thank you for participating, and you may now disconnect.