Planet 13 Holdings Inc. (OTCQB: PLNHF) financial results for the fourth quarter and year-end December 31, 2019. Revenues increased 99.8% in the quarter to $16.5 million versus last year’s $8.3 million for the same time period. While the company characterizes the fourth quarter as a slow one, it benefits from the MJBiz cannabis conference which brings in over 30,000 cannabis industry participants. The company trimmed its net losses to $2.6 million from $3.1 million in the previous year.
Planet 13 said its first-quarter 2020 looks to be flat sequentially with revenue coming in at $16 million.
For the full year of 2019, revenues increased 200% to $63.6 million versus the previous year’s revenue of $21.2 million. Planet 13 also lowered its net losses for the year to $6.7 million versus 2018’s net loss of $10.7 million
“Over the past month, businesses across the country have had to quickly adjust to the reality of COVID-19 related restrictions, and Planet 13 has been no exception. While this has impacted our day to day operations, we are approaching this challenge as an opportunity to deliver safe and responsible cannabis to our community,” said Larry Scheffler, Co-CEO of Planet 13. “When cannabis dispensaries in Nevada were told to close, we pivoted to focus on our delivery business, and in only 25 days we’ve ramped our delivery service from five to twenty-eight vehicles and have shifted our customer mix from 15% local area residents, to 100%.”
The company’s focus has always been on the tourist crowd, which has all but evaporated in the city. Scheffler addressed this saying, “While tourism will continue to be a strong driver of our business when things return to normal, this is a unique opportunity for us to build a strong local base and gain lasting market share as we become a fixture in the daily lives of Las Vegas Valley residents.”
The company reported that it has cash of $12.8 million at the end of the year versus 2018’s $19.4 million. The company’s cost of goods sold in the fourth quarter was $7 million and the total expenses were $9.6 million. The company said it has paired back expenses, reduced fixed costs and expect that the SuperStore operations will be breakeven or better if the shutdown is extended indefinitely.
Pivot To Residents
On the company’s earnings call, Sheffler said, “Through April, we were generating an average of over $80,000 per day in delivery revenue. We believe that once we have added additional drivers we can move that number easily north of $100,000 per day. This is new revenue for Planet 13 and on top of the 40%ish revenue growth that was being driven by Phase 2 prior to the shutdown. As everyone knows historically, 50% of our revenues come from locals, 100% of our revenue today is coming from residents of the Greater Las Vegas Valley. We are optimistic that we can retain many of these new customers even after the dispensaries reopen and life returns to normal.”
Bob Groesbeck, Co-CEO added, “We opened Phase II of the SuperStore during Q4 and are pleased to report that as projected, it drove increased traffic, customer engagement, and higher average ticket. During Q1 2020, we saw the network effect of Phase II accelerate, resulting in ~$16.6 million in revenue, a 20% increase compared to Q1 of 2019, despite effects of COVID-19 starting in the middle of March. In addition, the customer-facing production facility is fully ramped up and we have begun to offer Planet 13’s portfolio of in-house brands to select third-party dispensaries on a wholesale basis.”
The company did say on the earnings call that even if it gets deliveries up to $100,000 a day from its current $80,000, its revenues will still be cut in half.