Planet 13 Holdings Inc (CSE:PLTH)(OTCQB:PLNHF), a vertically integrated cannabis company, is a powerhouse in the burgeoning cannabis retail space. The company went all-out to “out-Vegas Vegas” and the result is not just a cannabis store, but “an entertainment destination.”
At 112,000 square feet, the company’s uber luxury flagship Planet 13 Cannabis SuperStore Entertainment Complex is the biggest cannabis store in the world, located steps from the famous Las Vegas Strip. The SuperStore is a showcase for a growing portfolio of branded products including vapes, edibles, pre-rolls and concentrates at a top-rated tourist hotspot in Vegas.
What has made Planet 13 successful in its Nevada home market is simple: vertical integration and high visibility. The company grows its own cannabis and makes its own products for the wholesale, medical and retail markets. It sells its popular brands — Medizin, TRENDI, HaHa, DREAMLAND and Leaf & Vine — at its wholly-owned store in Las Vegas, as well as at dispensaries owned by others. The company currently has three cultivation sites, plus three production facilities to make edibles and other products.
The company is gearing up this year to open its new California outpost, the Orange County Cannabis SuperStore Entertainment Complex which has massive digital screen displays and unique tech-art installations.
Proactive sat down with Planet 13 co-CEO and co-chairman Robert Groesbeck to discover how doing things “Vegas-style” now fuels the growth at this one-of-a-kind cannabis company. A serial entrepreneur, Groesbeck has practiced law for over 25 years and has extensive experience in the legal field.
Proactive: Please touch on Planet 13’s business model as a vertically integrated cannabis company and what sets you apart?
Robert Groesbeck: Planet 13 is a vertically integrated cannabis company with award-winning cultivation, production and dispensary operations. Planet 13 owns the world’s largest Cannabis SuperStore steps from the iconic Las Vegas Strip. We offer unparalleled customer experiences focused on unique interactive entertainment and some of the best cannabis products offered anywhere. Our flagship Las Vegas SuperStore showcases a growing portfolio of our branded products including vapes, edibles, pre-rolls and concentrates. Planet 13’s ambition is to operate ultra-high-end dispensaries in tier-one markets nationwide selling our brands both in-house and wholesale.
How strongly do your inhouse brands contribute to Planet 13 SuperStore sales?
Our inhouse brands are big sellers for Planet 13. They make-up about 20%-25% of inhouse sales in any given quarter, and combined with our growing wholesale, they regularly rank in the top 10 SKUs in Nevada.
Planet 13’s flagship Cannabis SuperStore Entertainment Complex in Las Vegas has been a trendsetter in the industry. How has the world’s largest cannabis dispensary reimagined the retail landscape and picked up momentum?
For us it has always been about doing things bigger and better than anyone could imagine. We like to say “we are going to out-Vegas Vegas”. By that we mean go-big and bring-in one-of-a-kind entertainment features that have never been seen in a retail business. Our strategy has worked. Planet 13 has become a must-see destination. Visitors love taking selfies and videos in-front of our Planet 13 Globe Water feature and they enjoy our interactive digital floor, along with our giant laser graffiti wall, our floating Orb drone shows, and our customer-facing production windows where visitors can see how our products are made – Willy Wonka style.
When is the California outpost of Planet 13, the Orange County SuperStore Entertainment Complex, likely to open and what are some of its attractions?
We like to call our first SuperStore in California Planet 13 2.0, thanks to massive digital screen displays and unique tech-art installations. We have released renderings of our California-inspired interior and exterior design that includes a cascading waterfall, waves, surfboards, and even a giant octopus that will undoubtedly become the focal point for selfie’s and social posts by our customers. When you first walk in, visitors will love our interactive digital floor. It leaves footprints in the sand where you walk and then it washes away when waves come in.
Visitors are also greeted by an 80-foot-long digital wall. It literally looks like Niagara Falls coming down, splashing onto a portal that leads into the dispensary. It creates a projected visual as if you are walking through a waterfall. There are multiple themes we will showcase, beyond the waterfall, on this huge digital wall. We also have different types of special effects, interactive games and a camera at night showing the live sunset and a live beach scene as the sun goes down. Above our 16-foot-tall octopus are 500 umbrellas that create the atmosphere of the entire ceiling. We have C02 fog that hits the top of the umbrellas and flows over the edges, creating an amazing visual effect.
How has the coronavirus (COVID-19) pandemic impacted retail sales and store capacity?
State mandates have temporarily reduced our in-store capacity to 50%. We expect that cap will be lifted soon. Since the start of the pandemic, we have continued to provide a one-of-a-kind experience. It may have looked a bit different during the pandemic with safety precautions in place, but the experience continued to be great service, products and entertainment. Even in the middle of the pandemic we had 90,000 visitors in the month of October. Despite the dip in tourism, demand has remained high as we shifted focus to our local customers. Our performance in the third quarter exceeded expectations - leading to our highest quarter of sales ever. Despite the pandemic we achieved 36% higher revenue compared to pre-COVID-19 quarters. This is a testament to the strength of Planet 13's business model and the success of the operational improvements we put in place to ensure our ability to serve local customers. As Las Vegas returns to normal, we will undertake further strategic initiatives to grow revenue at the SuperStore and increase our sales to local customers in Las Vegas.
What is your retail outlook?
We are bullish going forward. Las Vegas will come back in a very big way as the vaccines start to take hold. There is pent up demand for travel, vacations and fun - and Las Vegas is a primary destination. We are already seeing hotel occupancy rates rising and many hotels are shifting back to 7-nights a week. Tourism and flights are increasing by the day. Our retail outlook is so bullish that we are embarking on our phase-3 expansion, which includes a stand-alone retail store, adding an additional 7,000 square feet to the dispensary floor, and doubling our cash-registers from 40 to over 80.
We saw that 2020 was a banner year for the cannabis industry as New Jersey, Arizona, Montana and South Dakota voters approved legal adult cannabis sales, pushing the US recreational market to 15 states. Do you see cannabis eventually being treated like alcohol sales after 5 to 7 years?
We believe cannabis will be legalized in nearly all states. It will likely be treated like alcohol sales in the not-too-distant future. You can see it now, after every election cycle more states are moving towards legalization in some form. We can see Planet 13 being in 10-15 locations coast-to-coast. If a city is big enough to host a pro sports franchise, then it’s the right size city to accommodate our model.
What are the growth catalysts for Planet 13 in the near-term?
Because our Las Vegas SuperStore has become a must-see destination for both tourists and cannabis consumers it has also become one of the most valuable cannabis retail display locations anywhere. Top brands in all product categories are vying for space on our dispensary floor. We continue to see increased demand and revenue growth from our vendor leasing business. We also recently announced the start of construction on our Orange County Cannabis SuperStore Entertainment Complex - our first expansion outside of Nevada. The combination of our exhaustive design process, attention to detail, and deep focus on customer experience will make it a truly exceptional experiential space for California's discerning cannabis consumers. This is the first of many strategic expansions that will make Planet 13 and our SuperStores must-see destinations in multiple states in the future.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
Follow her on Twitter: @UttaraProactive