Planet 13 Reports Q1 Loss, Maintains Nevada Market Share

May 16, 2023 · Green Market Report

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)

In category:Business
Next Post

Pelorus Breaks Credit Grass Ceiling With A Rated Notes

Cannabis debt has been typically given low ratings if receiving a rating at all. This week, cannabis commercial real estate lender Pelorus Capital Group announced that $50 million in aggregate principal amount of 7% senior secured notes due September 26, 2026 issued by its…
Previous Post

Regulators And Advocates Discuss Next Steps For Marijuana Interstate Commerce

A top California marijuana official says that the U.S. already has an established interstate cannabis market. It’s just been unregulated, forcing cultivators to make the choice between staying legal—but isolating products from each operation to one state—or engaging in illicit…
Random Post

Celebrate 420 in Phoenix with these 10 events and deals, from comedy shows to a block party

Dispensaries across metro Phoenix are celebrating April 20 — also known as Weed Day — with block parties, giveaways and deals three years after recreational marijuana was legalized in Arizona. Some events will take place on the actual holiday while…
Random Post

Wyoming Bill Seeking to Ban Synthetic Intoxicating Hemp Products Moves to Legislature

A bill to ban intoxicating hemp products in Wyoming is moving to the Legislature after passing the Joint Judiciary Committee in a 6-8 vote on Monday, WyoFile reports. However, following the vote, at least two lawmakers, including the co-chair of the committee, said…
Random Post

Designing the Future of Retail

We’ve all heard the adage “time is money,” but successful retailers understand space also is money. Cannabis operators need to leverage their space more than almost any other retailers. After all, due to laws and regulations, a single physical space…
Random Post

Labor Union Victories Mean More Pressure on Margins and Profits in the Cannabis Industry

A new front in the conflict between cannabis businesses and labor unions is forming as the cannabis industry keeps growing and gaining legal recognition in more states. A surge of labor-management disputes within the developing business is being heralded by recent triumphs…