How Planet 13 Holdings Is Working to Drive Sales


Jan. 16 2019, Updated 5:35 p.m. ET

Current operations

As of November 12, Planet 13 Holdings (PLTH) (PLNHF) holds two cultivation licenses with one in Clark County, Nevada, and the second one in the town of Beatty in Nye County, Nevada. Currently, the company operates its 15,000-square-foot facility in Clark County. This facility can produce approximately 2,100 pounds per year. The company’s management stated that is evaluating the state of the wholesale cannabis market in Nevada to decide on the timing of the opening of its second facility in the town of Beatty, which has greenhouse capacity of 2.3 million square feet. Along with these licenses, the company also has two production licenses, which are co-located within the cultivation facilities.

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The company has two dispensary licenses, one for medical, which is operated under the Medizin brand, and the second one for the sale of recreational products. Both the licenses are operated jointly at the company’s Superstore in Las Vegas. The Superstore, which was opened on November 1, 2018, can serve 2,000 to 3,000 customers per day. With phase 1 of its construction being complete, the store spans 40,000 square feet. It features 16,500 square feet of cannabis retail space with 42 registers. In the second and third phase, the company’s management plans to add a coffee shop and a cannabis lounge after the state and county legalize consumption lounges and the company gets the licenses to operate such activities.

Third-quarter performance

On November 12, Planet 13 Holdings posted its third-quarter earnings, which ended on September 30. For the quarter, the company posted revenue of $4.91 million, which represents an increase of 62.5% from $3.03 million in the third quarter of 2017. Daily customer visits were up 73% in the third quarter since July 1, 2017, when the company began to sell adult recreational cannabis products.

During the same period, Planet 13 Holdings’ peers Acreage Holdings (ACRG-U) (ACRGF), MedMen Enterprises (MMEN) (MMNFF), and Curaleaf Holdings (CURA) (CURLF) posted revenues of $5.5 million, $21.5 million, and $21.4 million, respectively.

Analysts’ revenue estimates

In the fourth quarter, analysts expect Planet 13 Holdings to post revenue of $7.70 million to take the company’s 2018 revenue to $21.34 million, which represents an increase of 137.1% from $9.0 million in 2017. In 2019, analysts expect the company’s revenue to rise by 338.8% to $93.6 million.

To drive its sales, Planet 13 Holdings had launched its second brand, TRENDI, on November 12, which comes in three products. The products appear to have resonated well with customers, as the company sold ~5,000 units of TENDI in December, which represents a rise of 260% from ~1,700 units in November.

Next, we’ll look at Planet 13 Holdings’ valuation multiple and analysts’ recommendations.


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