Planet 13 Archives - Green Market Report

Debra BorchardtOctober 27, 2021
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The state of Nevada has joined the billion-dollar bud club as the Nevada Cannabis Compliance Board (CCB) and the Nevada Department of Taxation (DoT) released figures showing more than $1 billion in taxable sales reported by Nevada’s legal cannabis industry over a 12-month period. The agencies noted that during the Fiscal Year 2021 (July 1, 2020 – June 30, 2021), licensed adult-use cannabis retail stores and medical dispensaries generated $1,003,467,655 in taxable sales. Th groups stated that this is an increase of more than $318 million versus the $685 million in taxable sales from the fiscal year 2020. The majority of sales took place in Clark County and unincorporated cities in Southern Nevada.

Provided by CCB/DOT

Schools received over $67 million from the CCB, representing combined revenue from the State Wholesale Cannabis Excise Tax, along with civil penalties, licensing, and other fees collected through regulation of the cannabis industry. In addition to that, over $92 million in Retail Cannabis Excise Tax Revenue was sent to the school’s distributive account in FY 21.
In 2019, Governor Sisolak signed SB 545, which stated all revenue from the 10% retail cannabis excise tax would be sent to the Distributive School Account.

“This is what Nevadans expected since the legalization of recreational marijuana,” Governor Steve Sisolak said. “Education remains one of my top priorities, and I’m proud to see promised tax revenue from cannabis sales directly funding our students and classrooms.” The CCB officially began regulating Nevada’s cannabis industry on July 1, 2020, transitioning oversight
from the DoT’s Marijuana Enforcement Division.

Nevada Cannabis Statistics

There are now 346 certified medical cannabis establishments in the state and 408 licensed recreational cannabis establishments. 336 entities hold dual licenses. There are 87 active dispensary/retail stores in the state.

Planet 13

One of the best-known operators in the state, Planet 13 Holdings Inc. (OTCQX: PLNHF) reported $11.9 million in sales during July. During the first month of operations, the new Orange County store generated ~$800 thousand in sales. In September, the company doubled the size of the Las Vegas superstore cannabis retail area by adding 40 registers for higher sales volume and faster customer checkouts. The store also added an additional reception desk in order to better address the crowds of shoppers.

“Based on the early results we’ve seen from the Orange County store we are confident in the trajectory of sales and the quality of service and product we are providing. Sales have grown week over week as we start to gain traction as one of the top dispensaries in Orange County,” said Bob Groesbeck, Co-CEO of Planet 13. “Looking back at the early days of Planet 13 Las Vegas is a good reminder that it takes time to build customer trust and awareness. We took that dispensary from generating around $3 million a month to now north of $9 million with gross margins above 50%, all by focusing on the customer and continuing to refine and improve the experience and product selection.”


Debra BorchardtOctober 15, 2021
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Viridian Capital Advisors analyst Jonathan DeCourcey is looking into his cannabis crystal ball and says skip 2022 – it’s 2023 that should be the focus for investors. He points out that 2023 will be the first full year with adult-use cannabis sales in the key markets of Connecticut, New Jersey, and New York. He wrote,

Based on 2023 expectations, top operators are likely to look much cheaper overall than they do today.

The analyst said that the cannabis market’s current bear market is unwarranted and presents buying opportunities. While company estimates for 2022 have been increasing, he says the real story will be what happens in 2023. He wrote, “As we look to 2023, the opportunity becomes even more favorable. Even omitting the share gains for large public players (both through execution and consolidation) and conservatively growing estimated 2022 revenues by the roughly 20% growth rate for broader US cannabis sales in 2023 and leaving adjusted EBITDA margin levels unchanged from 2022 estimates, US cannabis companies will be trading at a roughly 50% discount to the one year forward projections of this winter with 2023 multiples (’23EV/Sales at 2.1x and EV/EBITDA at 6.3x). These valuations levels are incommensurate with the high growth nature of US cannabis and look inexpensive even relative to slower growth more mature industries.”

In his opinion, many of the companies considered to be the top operators for 2023 are not necessarily the biggest by market cap or the most expensive today. His big list of companies that he believes look even better when considering the 2023 numbers are Ascend Wellness, Ayr Strategies, Body & Mind, Cansortium, Columbia Care, Glass House, Goodness Growth, Jushi, TerrAscend, and Tilt Holdings. The two companies DeCourcey specifically highlighted in his report that was published on October 15, was 4FrontVentures (OTC: FFNTF) and Planet 13 (OTC: PLNHF).

4Front

Viridian has a Buy rating on 4Front and a $2 target price. The analyst noted that the 2022 estimates only represent about 40% of the company’s long-term plans. 4Front recently broke ground on a cultivation and production facility in Illinois called “Big Daddy.” The first phase of this project will be a 250,000 square foot cultivation facility that will open in early 2023 giving the company 65,000 square feet of cultivation versus its current 9,000 sq. ft. today. This expansion will allow 4Front to sell more house brands at its own locations, plus open itself up to wholesale business. The company has said that the initial buildout will allow it to produce $100 million of sellable product.

In addition to Illinois, the Massachusetts operations are expanded by a recent acquisition of  New England Cannabis Corporation. 4Front said that NECC is expected to be significantly accretive to its EBITDA expectations for 2022 and will immediately scale 4Front’s presence as a dominant wholesaler and producer in the state. The acquisition is said to more than double 4Front’s total flower canopy in Massachusetts to over 30,000 sq. ft, with further expansion potential for up to an additional 10,000 sq. ft. of canopy, and will approximately triple 4Front’s kitchen, processing, and distribution space.

4Front also has an outstanding license application in New Jersey, which could also present a big opportunity. DeCourcey also pointed out that 4Front could end up being a potential takeover target by a larger MSO.

Planet 13

Planet 13 was truly beaten up by the pandemic. As a dispensary superstore that thrived on tourist traffic, the lockdown was especially difficult. Fast forward to today and Vegas is coming back. The MJ Biz conference next week is sure to bring lots of attention to the flagship store in Las Vegas and could be a short-term catalyst for the stock. Beyond that, the company has also opened a superstore in California.

Yet the analyst stated that right now, Planet 13 appears expensive as it has an EV/EBITDA multiple of 13.8x or a roughly 81% premium to the broader peer group. Still, he doesn’t think the 2022 outlook tells the whole story for the retailer. Looking even further out to 2023 results, Planet 13 has plans to open another store in Chicago now that it has a license through a joint venture and it acquired a Harvest license in Florida.

“We anticipate additional expansion even beyond those two initiatives coming given the company’s well-capitalized balance sheet and management’s stated initiative of having at least eight Superstore locations open within the next five years,” wrote the analyst. He suggested Planet 13 could potentially buy smaller assets that could be built out and more stores in tourist-friendly cities. He also thinks Planet 13 could be a target for a larger MSO to acquire.

 


Julie AitchesonOctober 1, 2021
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The impact of Covid-19 on shopping behaviors is a matter of great concern not only to retailers but economists, city planners, public health officials and a whole slew of other interested parties. A 2020 survey of online consumers in 9 different countries produced by The United Nations Conference on Trade and Development and titled “Covid-19 and E-Commerce”, found that the pandemic has accelerated a shift towards online shopping.

The survey also suggests that the shift towards a digital retail world may be permanent. This news has sparked some intriguing innovations in the cannabis retail space, including the rise of “immersion retailing”, which seeks to create all-inclusive, multi-sensory shopping experiences that lure customers off of their couches and back into stores.

Planet 13

Planet 13’s (OTC: PLNHF) flagship store in Las Vegas recently added a new 80-feet wide LED wall in the expanded dispensary showcasing immersive entertainment (like lions breaking through the wall, vines growing up to the ceiling and much more creating an incredible visual experience for customers). The dispensary also has a Willie Wonka style production window where customers watch edibles and beverages being produced and interact with products on flat screens. There is a choreographed Orb drone show over the dispensary floor, an interactive floor in the grand hallway, and a giant laser graffiti wall.

Planet 13 Las Vegas is the largest cannabis store in the world at 112,000 square feet, is not actually a store in the conventional sense but more of an “entertainment concept”. This concept includes Budtender greeter/concierges, beautifully merchandised products, special shop-in-shop areas where top brands showcase their offerings, Trece restaurant with signature cocktails, Purc café for gourmet coffee, and a new merchandise and collectibles store. Future plans for the as-yet-unmaximized space include a large consumption lounge inspired by the Las Vegas nightclub scene where customers can enjoy products on site. Planet 13 has taken this model to California with the recent opening of its 55,000 sq-ft Orange County cannabis SuperStore, and it has acquired licenses for expansions into Florida and Illinois.  

Alchemy

Toronto-based Alchemy is an independent retailer offering an immersive and experiential shopping alternative. It is the brainchild of former triathlete Richard Browne, who envisioned Alchemy as “a museum where you can touch, feel, and interact with the elements.” This is accomplished, in part, through a playful approach to interior design which eschews the conventions of dispensary aesthetics and focuses instead on what Alchemy’s multidisciplinary designer Paolo Ferrari refers to as “a cerebral experience infused with artistry, nature, and technology.” From the kaleidoscopic visuals on display for waiting guests to flower showcased in custom “smelling-globes”, Alchemy’s creators leave no stone unturned when it comes to enticing the senses and giving the in-person shopping experience an edge over the convenience of click-and-pay.

Cannaffornia

Cannaffornia, one of the newest immersion retail experiences to make the scene, offers two of California’s largest consumption lounges at 5,000 square feet each, situated on a 100-acre campus in southern California’s Imperial Valley. The location is strategic in its attempt to capture travelers transiting through Arizona, California, and Mexico. Cannaffornia boasts two large retails stores, Queen of Dragons and The Other Guys, which stock top brands and invite consumers to sample the goods in one of their spacious lounges before committing to a purchase.

Global management firm McKinsey & Company attributes the shift towards digital retail in the Covid Era to three change forces—economic downturn, preference shifts, and digital acceleration. With consumers sticking to trusted brands, spending less, shopping less often and sticking closer to home, the cannabis industry’s gamble on immersion retailing faces some significant obstacles. Some industry innovators are turning those obstacles into opportunities to change the retail landscape. 


StaffSeptember 1, 2021
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Planet 13 Holdings Inc. (CSE: PLTH)(OTCQX: PLNHF) is buying a subsidiary of Harvest Health & Recreation Inc. (OTC: HRVSF) in an all-cash deal valued at $55 million. The company will be named Planet 13 Florida Inc. and will purchase a license to operate as a Medical Marijuana Treatment Center issued by the Florida Department of Health to the seller. The acquisition is dependent on the successful close of the Trulieve Cannabis Corp./Harvest arrangement transaction and the Florida Department of Health’s Office of Medical Marijuana Use approval for Planet 13 Florida.

“Florida has long been one of our most coveted markets with over 20 million residents, 130 million annual visitors and incredible consumer demand already demonstrated in the medical program. It was important for us to enter the market prior to a transition to adult-use to put the pieces in place to capitalize on this market in both the short and long term,” said Larry Scheffler, Co-CEO of Planet 13. “We are excited to introduce our best-in-class retail experience and portfolio of popular products to the Florida market and to continue to build the Planet 13 brand across the United States.” Planet 13 is known for its adult-use cannabis superstores in Las Vegas and Orange County. This will be a medical-use only location.

As of August 26, 2021, there were 22 companies with MMTC licenses with 371 dispensing locations across Florida. License holders are not subject to restrictions on the number of dispensaries that may be opened or on the number or size of cultivation and processing facilities they may operate.

“After a lot of planning on how we wanted to approach this market, now is the time for action. We are well-capitalized to complete the initial buildout of our cultivation and retail plan which includes a network of neighborhood stores in priority metro areas to support future SuperStores in Miami, Orlando, and other tourist destinations, said Bob Groesbeck, Co-CEO. We have a successful track record of completing large retail and cultivation buildouts on time and on budget. This expertise combined with our differentiated, experience-driven retail and diverse product portfolio gives us confidence moving into the Florida market.”

 


Debra BorchardtJune 7, 2021
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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.

Consumption Lounges

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.”


Debra BorchardtApril 22, 2021
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420 was predicted to be a huge day for cannabis sales and it certainly didn’t disappoint. Akerna said that by the time Tuesday hit, the daily retail sale of legal cannabis was expected to gross $95 million nationally, bringing total 4/20-related sales to $370 million in the U.S. if Akerna’s data proves accurate.

Planet 13

Nevada-based Planet 13 Holdings Inc.(OTCQB:PLNHF)  a leading vertically-integrated Nevada cannabis company, announces record sales day on April 20, 2021 (“420”). The Company generated $543,000 in single-day sales with gross margins during the month in excess of 50%.

“The demand and acceptance for cannabis is growing across the country, and nowhere is that more evident than in Las Vegas. For tourists returning to Vegas, Planet 13 is synonymous with cannabis and an incredible entertainment experience,” said Larry Scheffler, Co-CEO of Planet 13. “The demand is so overwhelming that even with the many improvements we have made to streamline throughput, we still can’t capture all of the demand. I’m excited for the relaxing of COVID restrictions on May 1st and our expansion which doubles our sales floor and points of sale to handle the unprecedented surge in customer traffic.”

Planet 13 said it is also hiring over 300 workers to staff its Vegas dispensary expansion (doubling points-of-sale/registers to 85) and to staff its new California SuperStore.

Ayr Wellness

Ayr Wellness Inc. (OTCQX: AYRWF) said it celebrated the 420 holiday with retail sales records across its six-state footprint. Nevada, Massachusetts, and Pennsylvania all had record days. In total, the company saw 14,241 transactions and $1.24 million in sales on Tuesday, for an average ticket of $87. Retail gross margin remained high at over 50%.

In Nevada, where the local economy is seeing the benefits of the reopening of the casinos and entertainment venues, Ayr, through its service and operation agreements with licensed operators, saw over 7,500 transactions, including over 2,000 in its busiest location in Henderson, NV, 30% above its average daily count.

“I could not be prouder of our Ayr Wellness team. This 420 we set a new standard for performance and customer service with over 14,200 transactions processed in one day. As cannabis continues to mainstream throughout our culture and 420 increasingly becomes a “National Holiday”, we are thrilled to provide our consumers with an exceptional customer experience, excellent products, and new ways to safely celebrate the wellness and wonder of cannabis,” said Jonathan Sandelman, CEO of Ayr Wellness.

Eaze


California’s largest marketplace for legal cannabis delivery announced record 420 sales. Eaze customers bought an average of $200 worth of cannabis on 4/20/21, a 50% increase in order value over 420 2020. Deliveries were also up significantly, with a 185% increase compared to any other Tuesday in 2021. Eaze, which has completed 7 million deliveries to date, recently announced its expansion into Michigan and its line of private label brands. “Cannabis consumers moved to delivery as their preferred way of shopping last year, so we’re not surprised to see such a strong 420 in 2021,” said Ro Choy, CEO of Eaze, “Even as daily life begins to return to normal, consumers are staying with the convenience of delivery. It’s the future of this industry.”


StaffNovember 25, 2020
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Planet 13 Holdings Inc. (CSE:PLTH) (OTCQB:PLNHF) reported that revenues rose 36.5% to $$22.8 million for the third-quarter ending September 30, 2020, versus last year’s $16.7 million. The company also delivered a net income of $0.2 million as compared to a net loss of $1.7 million in 2019. The net income before taxes was $3.4 million as compared to a net income of $0.3 million last year for the same time period.

“Our performance in the third quarter exceeded expectations – leading to our highest quarter of sales ever,” said Larry Scheffler, Co-CEO of Planet 13. “Despite being impacted by the ongoing global pandemic and our Las Vegas SuperStore only at 50% capacity, we achieved 36% higher revenue compared to pre-COVID quarters. This is a testament to the strength of Planet 13’s business model and the success of the operational improvements we put in place to ensure our ability to serve local customers. As Las Vegas returns to normal and the economy recovers, we will undertake further strategic initiatives to grow revenue at the SuperStore and increase our sales to local customers in Las Vegas.”

The operating expenses, excluding non-cash compensation expense and depreciation and amortization, was $7.2 million in the quarter versus $6.7 million in 2019, an increase of 7.9%.  The third-quarter 2020 adjusted EBITDA of $6.2 million was higher than the 2019 Adjusted EBITDA of $3.4 million.

“In the third quarter, our in-house brands contributed 25% to SuperStore revenue – continuing to be one of the most recognized and fastest-growing segments within the Planet 13 portfolio. In the wholesale market, we saw increasing sales month over month throughout the quarter and continuing into October. Building on this momentum, we continue to invest in cultivation with our recently announced acquisition of a 45,000 square foot facility in Las Vegas, better positioning us to supply wholesale and retail sales within the state,” commented Bob Groesbeck, Co-CEO. “We are excited to leverage our knowledge and experience from Nevada to California, with the opening of our new dispensary in Santa Ana in 2021 – the world’s second-largest dispensary. Planet 13 is well-capitalized, and we look forward to executing on future expansion into other major growth markets.”

Post Quarter Updates

Following the end of the third quarter, the company listed the following highlights in a statement:

  • On October 13, 2020, Planet 13 announced the addition of non-cannabis retail space to the Las Vegas SuperStore.
  • On October 19, 2020, Planet 13 announced expanding the dispensary floor of the Las Vegas SuperStore.
  • On October 19, 2020, Planet 13 announced a CDN$20 million bought deal public offering.
  • On October 20, 2020, Planet 13 announced an upsize to bought deal public offering to CDN$25 million.
  • On November 5, 2020, Planet 13 announced the closing of a CDN$28.8 million bought deal public offering.
  • On November 20, 2020, Planet 13 announced opening the Medizin dispensary.

StaffOctober 6, 2020
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Planet 13 Holdings Inc. (OTCQX:PLNHF)  announced preliminary 2020 third-quarter revenue of $22.8 million a 110% increase over the second quarter. The company did not release any profit or loss figures for the quarter. The company delivered a net loss of $4 million in the second quarter. The gross margin was ~50% in the third quarter.

Planet 13 said that the store served ~1,625 average customers per day in-store with an average ticket of ~$124. In June of 2019, the store was serving over 2,000 customers a day, so there is clearly a decline in the store traffic as tourism is yet to return to the old levels. The average ticket in June 2019 was $88, so the ticket size is increasing even if the traffic is lower.

“Q3 has proven Planet 13’s resilience and strength. We drove an impressive rebound in sales and a record quarter by making operational improvements in response to COVID-19. The improvements have led to higher average tickets and conversion rate despite the reduced tourist traffic. Along with these operational improvements at the store, our delivery and curbside pickup have expanded our revenue from Las Vegas residents,” said Larry Scheffler Co-CEO of Planet 13. “We are opening our neighborhood dispensary in Q4 and continuing to drive increased delivery and curbside sales to increase our share of sales to Las Vegas residents.”

The company also reported the following statistics:

  • In-Store revenue of $18.5 million in Q3 2020 compared to $16.3 million in Q3 2019, an increase of 13.0%.
  • Delivery & Curbside revenue of $3.4 million in Q3 2020 compared to $295 thousand in Q3 2019.
  • Wholesale & Other revenue of $1.0 million in Q3 2020 compared to $61 thousand in Q3 2019.
  • Total revenue of $22.8 million in Q3 2020 compared to $16.7 million in Q3 2019, an increase of 36.5%

Separately, Akerna (NASDAQ: KERN) reported that for the customers using its MJ Platform in Nevada that in May, cannabis sales started to recover, which could be attributed to the reopening of restaurants and shops. “Adult use sales experienced a 52% increase in average daily sales when compared to April. It is estimated that cannabis retailers experienced a 35% potential loss in total sales between March 21 and May 31, when compared to January and February averages.”

Bob Groesbeck Co-CEO of Planet 13 added, “We started wholesaling our products at the end of June, and are rapidly gaining momentum. We are now in 33 dispensaries across the state and expect this to grow as our brands continue to gain name recognition. Between wholesale and retail sales our edible, concentrate, and beverage lines are among the top 10 selling SKUs statewide. In Q3, inhouse brands made up 25% of cannabis sales. In order to achieve the Company’s goal of delivering a minimum of 50% of revenue from our in-house brands, we are transitioning our newly purchased indoor cultivation facility to our in-house strains to increase sales of our popular, high-margin, Medizin flower brand.”

 


StaffMay 21, 2020
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Planet 13 Holdings Inc. (OTCQX: PLNHF) is expanding beyond its universe of Las vegas Nevada as the company acquires a California dispenary. Planet 13 said it is has closed on its plan to buy Newtonian Principles, Inc. in a stcok and cash deal valued at $4 million.

The acquisition includes the California cannabis sales license held by Newtonian, and a 30-year lease for a dispensary in Santa Ana, California, and certain other assets from Warner Management Group, LLC.

“Closing the Acquisition is a major step towards Planet 13’s first California location.  We’ve examined hundreds of locations and are confident in our ability to replicate the SuperStore experience at this location, introducing new customers to the Planet 13 brand,” said Bob Groesbeck Co-CEO of Planet 13. “At this time, due to COVID-19, we are not putting a timeline on the opening of the dispensary.  We have budgeted approximately six million dollars in CAPEX for the opening of the Santa Ana dispensary, leaving us plenty of cash on hand to manage any COVID-19 related impacts on the business.”

The price paid was much lower than the originally agreed-upon price of $10 million back in June of 2019. At the time, the company said, “After a thorough and deliberate search, we identified this excellent site located three miles from the South Coast Plaza Mall, which hosts 24 million visitors a year and is just a short ten-minute drive from Disneyland, with 18 million visitors per year.” Then it seemed as if the deal was off when Planet 13 said it had terminated the deal, but the announced that it had renegotiated the terms in April 2020.

Planet 13 had started 2020 off with record sales in historically slow months for tourism, but then the COVID-19 pandemic stopped all tourism as hotels and casinos closed. The company was able to sell to local residents but sorely missed its tourist crowd.

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%. 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.”

 


Debra BorchardtApril 15, 2020
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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.

 

 


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Pretty scary results on Delta-8 products by The latest from

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