Planet 13 Stock Is Down 15% Since Its Q3 Earnings


Nov. 29 2019, Published 8:34 a.m. ET

Nevada-based vertically-integrated cannabis player Planet 13 Holdings (PLNHF) announced its third-quarter earnings results on November 25. Since the time of the announcement, the stock has fallen 15%. Currently, it’s trading at $1.48.

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Planet 13’s financial highlights

Planet 13 reported revenue of $16.7 million in the third quarter, up 241% sequentially from $4.9 million. The company’s gross profit stood at $9.9 million, implying an increase of 280% from $2.6 million in last year’s third quarter. Its gross margin slightly expanded from 53.2% in the third quarter of 2018 to the current 59.1%.

The company’s operating expenses increased by 182% YoY (year-over-year). It recorded $3.4 million in adjusted EBITDA, nine times higher than its adjusted EBITDA of $0.37 million in the third quarter last year. The company posted a net loss of $1.7 million in the quarter, down 88% from a net loss of $0.9 million last year.

Planet 13 currently holds cash and cash equivalents of $18.1 million. It possesses $67.1 million worth of assets, an increase of 49% YoY. Its total liabilities stand at $26.0 million, an increase of 269% YoY.

Business highlights

Planet 13 started its third quarter by adding Adrienne O’Neal to its board of directors. During the quarter, the company added new edibles and beverage brands such as HaHa Gummies, Dreamland Chocolates, and Elysium to its portfolios. It also entered into an agreement with the Cannabition cannabis-themed museum to be part of the Cannabis Entertainment Complex in Las Vegas.

The company opened its Rickety Cricket pizzeria and Purc Coffee Shop in the cannabis-themed entertainment center. Recently, it opened a 15,000-square-foot production facility in the center.

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Management’s take on earnings

Planet 13’s agreement to be part of the Cannabis Entertainment Complex is expected to be a growth driver. The cannabis center generated revenue of $59.5 million in one year for the state of Las Vegas. This revenue accounted for 9% of the state’s total revenue from cannabis. Planet 13’s management believes the growth potential of this cannabis center will be a turning point for the company.

The company has achieved positive cash from operations and EBITDA in the last three quarters. It’s also planning to create world-class cannabis entertainment centers in Santa Ana following license acquisitions. CEO Bob Groesbeck believes that these Santa Ana plans will be a success given the tourist traffic and the company’s reputable customer service.

Larry Scheffler, co-CEO of Planet 13, said, “With Phase II and wholesale operations just getting underway, we expect to continue generating profitable growth as we expand the sales of our well-regarded in-house, in-store produced brands both on-site and in 3rd party dispensaries state-wide commencing in the New Year.”


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