Planet 13's Financial Numbers Down Across the Board for 2022, Losses Jump 152%

Co-CEO's remain optimistic about future earnings.

Nevada-based cannabis multistate operator Planet 13 Holdings Inc. (CSE: PLTH)(OTCQX: PLNHF) had a pretty bleak 2022, with financial results down in nearly every category and a total loss of $49 million for the year, more than doubling its losses of $19.5 million in 2021.

Still, company leadership projected optimism heading into 2023. Co-CEO Larry Scheffler said in a press release that “pricing compression trends” began to “stabilize,” and pointed the finger at “state-wide pricing trends and the overall economic environment” as the primary reason for the 2022 performance.

“We remain optimistic about the outlook for 2023,” Scheffler said, noting that “Despite the pressures on retail, we grew wholesale revenue by 26% year over year and had a top-five brand in every product category. Moreover, in California, we increased our share of shelf and wholesale revenue every quarter.”

Planet 13’s other co-CEO, Bob Groesbeck, noted that the company is carrying zero debt and has $52.4 million cash in the bank, and insisted that cash flows remain strong.

“This is a strong foundation that alongside our numerous growth projects sets us up for future operating cash flow expansion,” Groesbeck said.

Wholesale revenue may be the only metric by which Planet 13 had a better year than in 2021, however. According to the company’s fourth-quarter earnings report:

  • Revenues dropped 12.5% for the full year, to $104.6 million from $119.5 million, and were down 16.8% for the fourth quarter, to $24.8 million from $29.9 million.
  • Gross profit was down 27%, to $48 million from $66 million in 2021, and dropped 34% in the fourth quarter to $10.7 million from $16.2 million a year prior.
  • Net losses for 2022 were up 152% to $49 million, compared to losses of $19.5 million in 2021. Losses for just the fourth quarter were up 657%, to $38.6 million from $5.1 million.

Also in the fourth quarter and early 2023, however, the company unveiled several new expansion plans that could put it on a path to profitability. Those include:

  • Starting work on a new Illinois dispensary as of November.
  • Obtaining the regulatory green light for a consumption lounge at its flagship store in Las Vegas.
  • Setting up a new dispensary in Daytona Beach, Florida.
  • In February, the parent company announced that it had purchased the outstanding 51% of ownership stakes in Planet 13 Illinois.

Future Revenue

On the company’s earnings call, the Co-CEO’s were asked about future revenue for Illinois and Florida. CFO Dennis Logan responded, “I think it will be closer to the end of Q3 — end of Q4, depending we’re a little bit ahead of schedule in terms of our construction budget timeline (for Illinois). Florida, it’s really going to depend on the opportunities that we’re currently working on. If they come to fruition, it could be sooner. And if they don’t, then it will be likely back end of the year into 2024.”

With regards to Nevada, Groesbeck said, “We’re seeing traffic upticks. We’re seeing convention upticks. That’s all positive news. And the type of events that are coming are really exciting. We think we’ll complement our facility. For instance, we’ve got this weekend, the Sweet 16 and the Final 8 College Basketball Tournament here in town. We’ve got one of the largest concerts of the year here at Allegiant Friday Night. And through the balance of the year now, we’ve got F1 coming in, which we think is going to be a huge draw later in the year. And with things such as the Super Bowl coming in, and festival season is just starting with EDC and the other large outdoor events like Life is Beautiful. We see a really strong summer and we’re excited. The thing that’s a bit concerning, of course, is addressed — is where does the economy go from a macro perspective where as we see the Fed just raised interest rates again yesterday. This all has an impact on the customer and their wallets and their ability to pay.”

John Schroyer

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