Planet 13 Holdings in Las Vegas, Nevada (CSE PLTH), (OTCQX (PLNH), slowed down its growth to adjust for industry problems. These included the lack of marijuana recreational legalization by Florida’s legislature and a “continuing industry-wide pricing compression” as stated during last week’s quarterly earnings conference.
Bob Groesbeck stated during the conference call that there will likely be fewer new stores opening in 2025 than originally planned. The company’s co-CEO noted the importance of “increasing the productivity of our footprint” in Florida following VidaCann’s acquisition last year.
Groesbeck stated that “2024 will present industry-wide issues, such as the competition of the illegal market, an increase in the use of hemp products with high levels of intoxication, and significant pressures on the margins due to price compression.”
Planet 13 has changed its strategy, mainly because it lost nearly $50 million in revenue last year. It is also unlikely to see a boom of revenues from Florida now that Florida has only medical marijuana following the vote on November.
Groesbeck stated that “while we had planned a few additional dispensary opens for this year including one last week, we have intentionally slowed the pace for new openings throughout the remainder of the year.” According to Groesbeck, Planet 13 is likely to open an additional four or five cannabis dispensaries throughout Florida in the coming year. This will bring its total retail footprint up from the current 34 shops.
Groesbeck stated, “Our focus right now has to be Florida.” We’re disappointed by the results of the November election, but there are still close to one million Florida cardholders. It’s an extremely challenging market at the moment. It’s a challenging market right now.
Dennis Logan, the CFO, noted that in recent months the company was able to improve its financial position, in part, by recovering $10.5 million in a legal dispute from Casa Verde, a cannabis investment firm, and Orange County Sheriff’s office.
Planet 13 also obtained $19.3 million in tax refunds from the Internal Revenue Service by filing amended tax returns that claim exemption to 280E, a strategy that has been employed by several multistate operators over the past year but which still rests on the possible outcome of either federal marijuana rescheduling – which is now very much in doubt – or the fate of one or more federal lawsuits.
But that hasn’t stopped Planet 13 – like other MSOs – from filing the amended returns going all the way back to 2020, in an attempt to claw back as much in federal taxes as they can.
Logan stated that since September 2023 they have not applied 280E and as such have paid estimated taxes. Logan said that there are several tax matters pending and in the very near future we expect to know the outcome of these cases and what position we’ve taken. As of December 31, 2024 the uncertain tax balances stood at $19.3 millions and was included in our long-term liability and separate line items.