Nevada seemed like a sure bet before the pandemic for cannabis companies. A seemingly never-ending stream of tourists from states where cannabis isn’t legal or the legal product offerings were meager. Several companies made huge investments in the state, especially in Las Vegas, to capitalize on tourists happy to plunk down big bucks to sneak some products back home. Of course, it isn’t legal to take cannabis products across state lines, but that doesn’t stop many tourists from taking the risk. The pandemic, of course, caused that market to crash as tourism dried up and the operations were left to depend on the business of residents only. Now it looks like the cannabis comeback is underway.
Planet 13 Holdings Inc. (CSE: PLTH)(OTCQB: PLNHF) reported record sales in May of $11.2 million with gross margins above 50%. The company said that May represents the third consecutive month of record sales as Las Vegas and America return to normal. In a statement, Planet 13 said that hotels across the Las Vegas strip have reported having hotel rooms sold out for the foreseeable future and Planet 13 expects continued strong sales on the back of increased tourist traffic. In May, Planet 13 reported that its first-quarter revenue rose 41% to $23.8 over 2020 before the pandemic had really settled in and lockdowns began. So, there is a great deal of optimism about the second quarter.
“Tourism and business are looking up in Nevada and our operations are mirroring this trend by experiencing consistent, month-on-month growth. We are thrilled to share that the momentum gathered over the past few months is continuing, with yet another month of record sales in May. Planet 13 has built a successful retail cannabis brand that resonates with Americans. We remain confident about the continuation of this upward trend as Las Vegas reopens to its full potential as well as the upcoming opening of our Orange County SuperStore in July,” said Larry Scheffler, Co-CEO of Planet 13. The company is opening its California Super Store on June 24, which will feature electronic waves, a 16-foot octopus, an Instagrammable Planet 13 bus, and 50 registers.
One of the biggest issues that Las Vegas had faced with cannabis sales was the lack of anywhere for the tourists to consume. Flower sales are always the biggest seller, but there was nowhere to smoke. Hotels often don’t allow smoking in rooms or on balconies. While cigarette smoking is allowed in some spaces, cannabis smoking isn’t. This caused the state to pass Assembly Bill 341 in early June that allows adults 21 and older to purchase and consume adult-use cannabis products on-site at any licensed “cannabis consumption lounge.”
According to NORML, “The measure establishes regulations for two distinct types cannabis consumption lounges. One group would be reserved for existing marijuana dispensary license holders who can then apply to operate an on-site cannabis consumption lounge. The other designation would be for new, independent businesses to apply for a license to operate an “independent cannabis consumption lounge” which is not attached to or adjacent to an existing retailer. The bill also provides for reduced license application fees for qualifying social equity applicants. Local governments can enact policies restricting access to cannabis consumption lounges under this bill.”
Prior to the legislation, only NuWu Cannabis in Vegas featured a tasting room within its 16,000 square foot marketplace. Since the dispensary is located on sovereign land owned by the Las Vegas Paiute Tribe, it is not subject to the same restrictions as the rest of the state. Instead, NuWu is self-regulated through the Las Vegas Paiute Cannabis Authority. As such, there are no Nevada marijuana taxes, no waiting rooms, and no reason not to open a consumption lounge. However, the location is north of the Fremont strip so consumers must travel about 15 minutes by car to get there.
Planet 13 said it has reserved an expansive dedicated space within the Las Vegas SuperStore for a consumption lounge which it will look to get built as soon as possible.
“We are thrilled that after the long wait, Nevada will finally be home to consumption lounges. We’ve long believed that tourists needed a safe, legal, and enjoyable place to consume cannabis and have been planning for a consumption lounge at the SuperStore since the bill was originally proposed two years ago,” said Bob Groesbeck Co-CEO of Planet 13. “Our SuperStore is one of the only dispensaries with the space on site and the proximity to the Las Vegas Strip to create a truly Vegas-style club. As with the rest of our dispensary, we look forward to setting the bar and showing the industry what is possible when your goal is to Out Vegas, Vegas.”