Net loss for the quarter rose due to lower gross profit and high one-time costs.
Las Vegas-based Planet 13 Holdings Inc. (CSE:PLTH) (OTCQB:PLNHF) posted a 3% decline in revenue for the first quarter ended March 31, which it primarily attributed to a significant drop in the average price of cannabis in Nevada.
Quarterly revenue fell to $24.9 million from $25.7 million in the same period in 2022. Amid recent downturns, the company saw improvements in retail revenue from their SuperStore, as cannabis prices stabilized.
The company’s co-CEO, Larry Scheffler, highlighted the steady performance despite challenging economic conditions and pointed to their market share in Nevada, which remained above 8%.
Planet 13’s wholesale business also expanded, with the firm adding more accounts and boosting sales with existing buyers. This growth, particularly in California, partially offset seasonal declines in retail sales.
The company reported a gross profit of $10.9 million, a decrease from $12.9 million in Q1 2022. The fall was largely due to a drop in the average price of cannabis in Nevada and an increase in lower-margin wholesale revenue.
Total expenses for the quarter were $15.3 million, down 7.8% from $16.6 million in Q1 2022, reflecting the company’s strong cost-control measures and a reduction in share-based compensation.
However, net loss for the quarter rose to $6.3 million from a net loss of $2.1 million in the same period last year, largely due to lower gross profit and high one-time costs related to potential mergers and acquisitions.
Despite these challenges, Planet 13 Co-CEO Bob Groesbeck outlined the firm’s 2023 strategy of strengthening their core business, increasing scale, and improving cash flow.
“We are leveraging our strong core business, taking strategic steps to reduce costs across our organization, and aggressively pursuing accretive M&A to add scale, operating leverage and improve our ability to generate free cash flow,” Groesbeck said in a statement.
The balance sheet shows that Planet 13 had cash of $42.7 million at the end of the reporting period, down from $52.4 million at the end of 2022. Total assets and liabilities also saw minor adjustments, with total assets at $227.2 million, down from $233.6 million, and total liabilities at $41 million, down from $42.7 million.
The company continued its expansion strategy, announcing a new location for its Port Orange dispensary in Florida, purchasing land for a planned dispensary in Illinois, and acquiring the remaining 51% interest in Planet 13 Illinois, LLC.
The company also announced leadership changes, appointing Lee Fraser as a board member and chair of the Audit Committee following the passing of Mike Harman. (Full Story)