Las Vegas-based Planet 13 Holdings (CSE: PLTH) (OTCQX: PLNH) slowed its roll to accommodate industry setbacks, including the November loss of recreational marijuana legalization in Florida and “ongoing industry-wide price compression,” company leadership said during its quarterly earnings call last week.
That means less rapid expansion and probably not as many new store openings in 2025 as originally hoped, co-CEO Bob Groesbeck said during the call, noting that the coming year’s focus will be on “increasing productivity of our footprint, particularly here in Florida” following the acquisition of VidaCann last year.
“2024 presented industry-wide challenges, including competition from the illicit market, the rise of intoxicating hemp products and significant price compression putting pressure on margins,” Groesbeck said.
As a result, Planet 13’s strategy has shifted, particularly because the company lost almost $50 million last year and now won’t be seeing a revenue boom in Florida, given that the state has remained medical-only following the November vote.
“While we’ve had a few more dispensary openings planned for this year, including one this week, we are intentionally slowing the pace of new openings for the balance of the year,” Groesbeck said. He estimated that Planet 13 will still likely open another four or five dispensaries in Florida this year, bringing its retail footprint to 38 or 39 cannabis stores nationwide from its current number of 34 shops.
“Right now, our focus has to be Florida,” Groesbeck said. “We’re disappointed with the vote in November, but we still have close to 1 million cardholders here in Florida. And it’s a challenging market right now. And I think it requires our complete focus to really build these stores up and drive revenue and of course, get to the margins that we need.”
The company has also been able to bolster its balance sheet in recent months, CFO Dennis Logan noted, in part by recouping $10.5 million from cannabis investment firm Casa Verde and the Orange County Sheriff’s office in connection with a lawsuit.
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.
“Since September of 2023, we have taken a position that 280E does not apply, and we have been making estimated tax payments as such,” Logan said. “There are several pending income tax cases ahead of us, and we anticipate that we will have a better understanding of the potential outcome and the position we have taken in the near future. The uncertain tax balances as of Dec. 31, 2024, stood at $19.3 million and is included as a separate line item and long-term liabilities on our balance sheet.”
[[{“value”:”The Nevada-based company joined other MSOs in filing amended tax returns to nullify 280E’s effect.
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