Planet 13 (PLNHF) has shown that it can grow its business despite an inconsistent market filled with uncertainties due to the coronavirus pandemic.
The innovative cannabis retailer managed to break even during the period when its main Las Vegas market was closed to tourists, and it continued to grow amid the uneven tourism patterns caused by the delta variant, and now the variant. omicron.
Co-CEO Larry Scheffler outlined his company’s final quarter in Planet 13’s third quarter earnings call:
“The third quarter was a strong quarter in Nevada, although it was marked by sales headwinds due to COVID resurfacing and seasonal pattern changes. Nonetheless, we continue to maintain the market share north of 10% in Nevada. In the third quarter, we generated $ 22.6 million from the SuperStore; $ 2.7 million curbside and delivery; $ 3.5 million from Medizin; and $ 1.6 million wholesale and other, a 33% increase from the third quarter of 2020. “
He noted that September’s results were slightly affected by the construction of the Las Vegas Superstore. Once that was completed, however, sales returned to a growth pattern.
“In October, we had several days that exceeded $ 400,000 in sales which improved the flow of customers,” he said. “[This has meant] we are able to serve more customers in a timely manner during these light busy days. “
Scheffler expects the real benefit of expanding floor space to be felt when big conventions return and normal tourist patterns take hold during the busy spring season. Las Vegas has been a story of steady growth for the business, but Planet 13 investors want to know how its new location near Los Angeles performed as well as what lies ahead of the business in its slow-growth plan to open SuperStores. across the United States.
How is planet 13 Santa Ana?
SuperStore Planet 13 in Santa Ana, California opened on June 24. In the third quarter, it generated sales of $ 2.4 million. This has been affected by a lack of out-of-state tourists due to the fact that COVID remains a concern and is escalating somewhat with the delta and omicron variants. Sales were also affected by “the significant construction of motorways in the close vicinity”, according to Scheffler.
Once this work is completed, however, he expects a boost for the store because “it will be much easier to get on and off the freeway at our location, but right now that’s a major obstacle.”
The co-CEO explained why sales were below expectations, but he also saw some bright spots.
“These numbers disappointed us and while there is some consolation in knowing that our customer reviews are among the highest in the state and sales are artificially low due to obstacles beyond our control, this is one of the main areas of focus. “, he said,” Based on what it costs to acquire and build a store and the current execution rate, that’s about 2 times the sales. And while that may be in line with the rest of the industry, it’s not a number we’re happy with. “
Scheffler may be disappointed in the short term, but he believes the Santa Ana location will continue to develop as normal tourism patterns return.
An American list for Planet 13?
Planet 13 is traded in Canada and has been over-the-counter in the United States. This is something CFO Dennis Logan expects to change soon.
“The company is in the process of becoming a national US company and registering with the SEC,” he said.
To accomplish this, the business will need to adopt US GAAP accounting practices while “implementing Sarbanes-Oxley compliance and becoming an SEC registrant by preparing and filing a registration statement on Form 10,” a he added. “This prepares the company for a possible stock market listing on a recognized US stock exchange and for the expansion of our shareholder base.”
In addition to moving towards uplisting, Planet 13 continued with its measured growth plans. Co-CEO Robert Groesbeck detailed those plans, which include a location in Chicago and several stores in Florida.
“The third quarter was to prepare Planet 13 for future growth. We won an Illinois dispensary licensing lottery through a social equity partnership,” he said. “Illinois has long been one of our targeted expansion areas. It has a large population, a significant number of tourists, and a robust adult market.
The company expects the license to be issued in the first half of 2022. It has already started looking for a location for a Chicago Superstore. In addition to the Illinois expansion, Planet 13 also has big plans in Florida, a state that only has legal cannabis for medical reasons, not recreational purposes.
“We acquired a vertically integrated license in Florida, arguably the best medical marketplace in the country and one with potential for adult use,” said Groesbeck. “Our plan over the next year is to open a network of neighborhood stores modeled on our highly productive and successful Medizin store, supported by culture and manufacturing.
Planet 13, its co-CEO added, plans to eventually open a couple of SuperStores in the state (likely in Miami and Orlando) when recreational use for adults becomes legal. The company plans to have six of its smaller Medizin dispensaries along with growing facilities to support them over the next 12 months.
The company’s shares closed on Dec. 3 at $ 3.29. That’s a drop of more than 50% from its 52-week high of $ 8.67.