Planet 13 Holdings Inc: Pot Stock Set to Rip Higher

Planet 13 Stock Poised to Break Out in Back Half of 2021

Planet 13 Holdings Inc (CNSX:PLTH, OTCMKTS:PLNHF) was one of the better-performing U.S. pot stocks of 2020, rising 178% that year. Planet 13 stock also finished the year up 698% from its March 2020 lows.

While PLNHF stock has done well in 2021, advancing roughly 25% in the first half of the year, it has been trading in a tight range since late May. But that’s about to change.

There are many reasons to be bullish on Planet 13 stock as we enter the back half of 2021. Despite COVID-19 putting a dent in January and February sales, the company reported strong first-quarter results.

Now that Las Vegas is open, tourists are back, and hotels are selling out, sales have come roaring back. In fact, in May, Planet 13 Holdings Inc reported its third consecutive month of record sales. And that momentum is expected to continue, which should result in the company reporting record second-quarter results.

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It looks like the third quarter could be one for the record books, too.

On July 1, Planet 13 opened its highly anticipated Orange County, CA SuperStore. This is the company’s third retail outlet, but the first one outside of Nevada.

Chart courtesy of StockCharts.com

PLNHF Stock Overview

Planet 13 Holdings owns and operates the two largest pot stores on the planet. The company’s Las Vegas SuperStore, which is the closest weed dispensary to the Las Vegas strip, covers 112,000 square feet. (Source: “Corporate Presentation: March 2021,” Planet 13 Holdings Inc, last accessed July 2, 2021.)

In November 2020, Planet 13 officially re-opened its second Las Vegas dispensary, “Medizin.” At 4,750 square feet, this dispensary is much smaller than the SuperStore, but it offers the same kind of experience.

Accounting for nine percent of all legal cannabis retail sales in Nevada, Planet 13 Holdings Inc sells vapes, edibles, pre-rolls, concentrates, and accessories—including its own branded products. The Las Vegas SuperStore also contains a coffee shop, bistro, and pizzeria.

As mentioned earlier, on July 1, the company opened its Orange County SuperStore. This is the company’s first foray into California, the world’s biggest cannabis market. The second-largest pot dispensary in the world, the Orange County destination is planned as a 55,000-square-foot experience with 16,500 square feet devoted to dispensary retail. The phase 2 and 3 construction will include memorabilia sales, ancillary retail, and a pot consumption lounge. (Source: “Planet 13 Announces Grand Opening of Orange County SuperStore,” Planet 13 Holdings Inc, June 24, 2021.)

More SuperStores are in the works. Over the next five years, Planet 13 hopes to open eight or more s SuperStores in tier-one markets in the U.S. and Canada. Potential U.S. sites include San Francisco, Portland, Seattle, Chicago, Phoenix, Dallas, Houston, Denver, Miami, Boston, and New York City. Potential Canadian sites include Toronto and Vancouver.

Strong Q1 Results

For the first quarter of 2021, ended March 31, Planet 13 Holdings announced that its revenue had increased by 41.8% year-over-year to $23.8 million. (Source: “Planet 13 Announces Q1 2021 Financial Results,” Planet 13 Holdings Inc, May 27, 2021.)

The company’s gross profit (before biological adjustments) was $12.8 million, or 53.8%, compared to $9.0 million, or 53.9%, in the same prior-year period.

Its first-quarter net income before taxes was $3.0 million, a 900% increase over the first-quarter 2020 net income before taxes of $300,000. Its net income was $400,000, or breakeven per share, versus a first-quarter 2020 net loss of $1.4 million, or a loss of $0.01 per share.

“After a slower January and February, due to COVID-19 related restrictions in place in Nevada, we had an absolutely outstanding March, April, and now May,” said Larry Scheffler, co-CEO, “After a year of fighting against the largest possible macro storm, it feels great to have the wind at our backs and to see all the improvements we put in place start to pay off.”

Third Straight Month of Record Sales

In early June, Planet 13 announced record sales for the month of May of $11.2 million. May represents the third consecutive month of record sales as Las Vegas and most of the country return to normal. (Source: “Planet 13 Continues String of Record Months with $11.2 Million in Sales in May,” Planet 13 Holdings Inc, June 7, 2021.)

In April, Planet 13 reported record sales of $10.7 million, which is almost equal to what the company generated in the entire second quarter of 2020 ($10.8 million). It also set a new record for a single day on April 20 (4/20), when it brought in $543,000. (Source: “Planet 13 Exceeds $10.7 Million in Sales with Another Single Month Record,” Planet 13 Holdings Inc, May 5, 2021.)

In March, Planet 13 dwarfed its previous single-month record, with sales of $9.7 million. (Source: “Planet 13 Announces Full Year 2020 Financial Results and Q1 2021 Revenue,” Planet 13 Holdings Inc, April 5, 2021.)

Analyst Take

Planet 13 Holdings Inc did well in 2020, thanks in large part to the fact that cannabis was deemed an essential service in Nevada and 28 other states. This helped the company report strong financial results and helped Planet 13 stock more than double in price.

Those are strong gains, but 2021 could be even more monumental, with Las Vegas back in business and the company reporting record monthly sales and opening its new SuperStore in Orange County.