Planet 13 Holdings Inc.: Steller Q2 Results Show Vegas Is Back for This Pot Stock

Outlook for Planet 13 Stock Is Excellent

Planet 13 Holdings Inc (CNSX:PLTH, OTCMKTS:PLNHF) is a no-brainer when it comes to U.S. pot stocks. Instead of being heavily invested in growing weed, the company focuses on running two of the largest marijuana dispensaries on the planet.

Furthermore, Planet 13 Holdings Inc recently opened a new cannabis SuperStore in California and announced that it won a license to build another SuperStore in Illinois. The company also recently reported stellar second-quarter results and an excellent outlook.

Despite all the good news, Planet 13 stock’s performance has been underwhelming in 2021, down by 9.2% year-to-date.

That’s not what Planet 13 shareholders are accustomed to. In 2020, PLNHF stock advanced by 178%. From its March 2020 lows until the end of the year, Planet 13 stock soared by 698%.

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On the bright side, the lackluster year-to-date share-price performance isn’t a result of Planet 13 Holdings Inc doing anything wrong. Cannabis stocks have been in a down market for a few months now. What’s amazing is that PLNHF stock has followed the herd during the sell-off.

Moreover, the recent sell-off has put one of the best pot stocks in a better trading range.

Chart courtesy of StockCharts.com

That isn’t to say Planet 13 stock has been having a bad year. PLNHF stock is actually up by 52% year-over-year. It has also been trouncing the broader stock market and entire cannabis sector since stocks bottomed in March 2020.

Judging by all the great things going on at Planet 13 Holdings Inc, this positive trend should continue.

Chart courtesy of StockCharts.com

PLNHF Stock Overview

Planet 13 owns and operates the two largest cannabis dispensaries on the planet. In Nevada, the company’s Las Vegas SuperStore, which is the closest marijuana dispensary to the Las Vegas strip, covers 112,000 square feet. (Source: “Corporate Presentation: August 2021,” Planet 13 Holdings Inc, last accessed August 31, 2021.)

The company also operates the “Medizin” dispensary in Las Vegas. At 4,750 square feet, this dispensary is much smaller than the SuperStore but 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 company also owns and operates three cultivation and production facilities.

On July 1, Planet 13 officially entered the California market when it opened phase 1 of its Orange County SuperStore—on time and on budget.

This SuperStore is planned to be a 55,000-square-foot consumer experience. That’s about the same size as an NFL football field. The dispensary floor covers 16,500 square feet. Once phase 3 is complete, the Orange County SuperStore will be the largest pot dispensary in the most developed cannabis market in the U.S.

This is just the beginning for Planet 13 Holdings Inc.

Over the next five years, the company hopes to open eight or more SuperStores in tier-one markets in the U.S. and Canada. Potential U.S. sites include San Francisco, Portland, Seattle, Miami, Boston, and New York City. Potential Canadian sites include Toronto and Vancouver.

Planet 13 Illinois Wins Chicago Pot Retail License

On August 5, Planet 13 Holdings Inc announced that Planet 13 Illinois LLC won a Conditional Adult Use Dispensing Organization License in the Chicago-Naperville-Elgin region. (Source: “Planet 13 Illinois Wins Chicago License,” Planet 13 Holdings Inc, August 5, 2021.)

The new location, which will mirror the Las Vegas and Orange County SuperStores, is expected to be anywhere from three to six times larger than anything comparable in Illinois today.

“Chicago has been one of the main target markets for a Planet 13 SuperStore with its rapidly growing cannabis sales, large population base, and attraction as a tourist destination,” said Larry Scheffler, co-CEO. (Source: Ibid.)

Planet 13 Holdings Inc partnered with Frank Cowan, a local entrepreneur. Cowan owns 51% of Planet 13 Illinois and Planet 13 Holdings owns 49% (for now). Planet 13 Holdings will eventually want to acquire majority control so the company can incorporate Planet 13 Illinois LLC’s financials into its results.

Q2 Revenues More Than Triple Year-Over-Year

On August 26, Planet 13 announced that its revenue for the second quarter ended June 30 soared by 205% year-over-year to $32.8 million. (Source: “Planet 13 Announces Q2 2021 Financial Results,” Planet 13 Holdings Inc, August 26, 2021.)

The company’s net loss before taxes came in at $900,000, versus a net loss of $3.3 million in the same prior-year period. Its net loss for the second quarter of 2021 was $4.4 million, or $0.02 per share, versus a second-quarter 2020 net loss of $4.0 million, or $0.03 per share.

Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) were $7.2 million, compared to an adjusted EBITDA loss of $600,000 in the same period last year.

Planet 13 Holdings Inc ended the second quarter with $136.3 million in cash, up from $79.0 million as of December 31, 2020.

“Q2 was a strong quarter for Planet 13. With tourism back, the Superstore’s in-store experience is once again proving that it is on the list of must visit destinations for any trip to Vegas,” said Scheffler. (Source: Ibid.)

Bob Groesbeck, another co-CEO, added that the company’s brands continue to gain traction. “HaHa” was the No. 2 edibles and No. 3 beverage brand in the state and “TRENDI” was the No. 3 concentrate and No. 6 vape brand.

“Subsequent to the quarter, we also won a dispensary license for the Chicago area giving us a clear path for our next SuperStore. Supported by a robust [merger and acquisition] pipeline and over $130 million in cash, Planet 13’s future is bright,” said Groesbeck. (Source: Ibid.)

Analyst Take

Planet 13 Holdings Inc continues to get better and better. Las Vegas is back, and sales have been soaring at the company’s two marijuana dispensaries in the city.

As mentioned earlier, in July, Planet 13 opened a new SuperStore in Orange County, and in August, the company announced that its subsidiary Planet 13 Illinois won a cannabis dispensary license in Chicago.

With all those developments, Planet 13 stock could be on the way up.