Planet 13 Holdings Inc: Pot Stock Rips to Record Levels on Record Q3 Results

pot stocksPlanet 13 Stock Up 135% in 2020, But Watch Out for 2021

Planet 13 Holdings Inc (CNSX:PLTH, OTCMKTS:PLNHF)  continues to be one of my favorite pot stocks. Early-bird investors have to be pleased with the company’s performance too. PLNHF stock is up 196% year-over-year, 135% year-to-date, and 682% since bottoming in March.

It’s been a great year for Planet 13 stock, and 2021 looks like it could be even better.

The company recently reported another quarter of record results. In spite of the COVID-19 pandemic, which saw the company’s Las Vegas superstore operating at 50% capacity, the company’s revenue was 36% higher compared to its pre-pandemic levels.

Planet 13 Holdings Inc recently reopened its “Medizin” dispensary in Las Vegas, and in 2021, it will be opening anew dispensary in Santa Ana, CA.

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PLNHF Stock Overview

Planet 13 owns and operates the largest pot dispensary in the world and holds six licenses for the Nevada market. The company’s Las Vegas superstore, which is the closest dispensary to the heart of the Las Vegas Strip, covers 112,000 square feet. (Source: “Corporate Presentation, October 2020,” Planet 13 Holdings Inc, last accessed December 7, 2020.)

In November, the company officially re-opened its second dispensary in Las Vegas, Medizin. At 4,750 square feet, this dispensary is much smaller than the superstore but offers the same kind of experience.

Medizin was closed in October 2018 so Planet 13 could transfer the license to its superstore. During its last full quarter of operations before closing, the Medizin Dispensary generated $4.9 million in revenue.

Since then, the Nevada cannabis market has grown 54%. Moreover, Allegiant Stadium (home of the Las Vegas Raiders and the University of Nevada’s football team) has opened, which could bring more customers to Planet 13.

Accounting for 10% of all legal cannabis retail sales in Nevada, Planet 13 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.

More Planet 13 superstores are on the way.

In the first half of 2021, Planet 13 Holdings Inc expects to open its Santa Ana superstore, which will become the world’s second-largest legal cannabis dispensary.

Over the next five years, Planet 13 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, Chicago, Phoenix, Dallas, Houston, Denver, Miami, Boston, and New York City. Potential Canadian sites include Toronto and Vancouver.

Highlights and Recent Developments

  • On July 17, Planet 13 Holdings Inc announced the acquisition of 45,000 square feet of indoor cultivation facilities
  • On August 10, the company was awarded another Nevada dispensary license
  • On October 13, Planet 13 announced that it had added non-cannabis retail space to its Las Vegas superstore
  • On October 19, the company announced the expansion of the dispensary floor of its Las Vegas superstore
  • On November 20, Planet 13 announced the opening of the Medizin dispensary

Record Financial Results in Third-Quarter 2020

On November 24, Planet 13 announced that its revenue for the third quarter ended September 30 increased 36.5% year-over-year to $22.8 million. Gross profit before biological adjustments was $13.0 million (56.9%), a 31.4% increase over the $9.9 million (59.1%) in the third quarter of 2019. (Source: “Planet 13 Announces Record Third Quarter 2020 Financial Results,” Planet 13 Holdings Inc., November 24, 2020.)

Larry Scheffler, co-CEO of Planet 13, said, “Our performance in the third quarter exceeded expectations – leading to our highest quarter of sales ever. Despite being impacted by the ongoing global pandemic and our Las Vegas SuperStore only at 50% capacity, we achieved 36% higher revenue compared to pre-COVID quarters.”

The company reported third-quarter net income before taxes of $3.4 million, compared to third-quarter 2019 net income of $300,000. Planet 13 reported comprehensive net income of $200,000 (breakeven per share), compared to a third-quarter 2019 net loss of $1.7 million (loss of $0.01 per share).

Planet 13 Holdings Inc ended the third quarter with cash of $56.8 million, compared to $12.8 million in the same prior-year period. Total assets were $125.5 million, compared to $62.9 million in the same prior-year period. Total liabilities were $39.3 million, compared to $21.6 million in the same prior-year period.

Bob Groesbeck, the other co-CEO, added, “We are excited to leverage our knowledge and experience from Nevada to California, with the opening of our new dispensary in Santa Ana in 2021 – the world’s second largest dispensary. Planet 13 is well capitalized, and we look forward to executing on future expansion into other major growth markets.”

Analyst Take

Planet 13 stock has been on fire since bottoming in March, soaring more than 675%.

Planet 13 Holdings Inc reported record third-quarter results, swinging to profitability. As mentioned earlier, the company opened its Medizin dispensary in the fourth quarter and it will be opening the world’s second-largest pot dispensary in the first half of 2021.

As Las Vegas returns to normal and the economy recovers, look for Planet 13 to undertake additional strategic initiatives to grow the revenue at its superstore.

2020 was a tough year, but PLNHF stock seriously outpaced the broader market, and by all accounts 2021 will be even better for the stock.