Release Date: March 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Planet 13 Holdings Inc (PLNH, Financial) reported a year-over-year revenue growth of 18%, reaching $116.4 million for the full year.
- The company successfully expanded its retail footprint by adding 30 new dispensaries, bringing the total to 34, including the superstore.
- Early results from newly upgraded greenhouses are showing strong performance, indicating improved product quality and supply.
- The company ranked as the 4th highest in branded sales in Nevada, demonstrating strong market presence.
- Planet 13 Holdings Inc (PLNH) maintained a strong balance sheet with an unrestricted cash balance of $23.4 million as of December 31, 2024.
Negative Points
- The company faced significant price compression across key markets, impacting gross margins.
- There was a sequential decline in revenue from Q3 to Q4 2024, attributed to seasonal trends and broader economic pressures.
- Gross profit and margins declined due to industry-wide price compression and discounting of lower quality products in Florida.
- The company anticipates continued competitive pressure and pricing headwinds impacting top-line revenue in 2025.
- Challenges in the Florida market, including product consistency issues and the failure of the adult-use initiative, have impacted sales.
Q & A Highlights
Q: Can you provide more details on the margin profile changes from quarter to quarter, especially regarding the quality product issues in Florida?
A: Unidentified_4 (CFO): In Q4, we had to sell lower testing THC products at steeper discounts due to not having our upgraded greenhouses operational yet. Now, with the new greenhouses online, we expect improved quality and supply, leading to better margins in Q2 and Q3. We are targeting gross margins of 50-53% in Florida and high 50s in Nevada retail operations.
Q: What are your plans regarding free cash flow positivity and CapEx in Florida?
A: Unidentified_4 (CFO): We have spent $3 million on new store openings in Florida and plan an additional $3-5 million in CapEx for the year. We are focusing on reducing costs and achieving cash flow positivity while expanding our footprint strategically.
Q: Given the challenges in Florida, are you considering expanding into other states?
A: Unidentified_5 (Co-CEO): Our focus is currently on Florida, despite the challenges. We are open to opportunities in other states like Nevada and Illinois if they present themselves, but any acquisition would need to be a fantastic deal, given the current market conditions.
Q: Is there an image problem with the Vidaca network in Florida, particularly regarding product quality and store locations?
A: Unidentified_5 (Co-CEO): Product consistency has been an issue, especially with seasonal degradation affecting sales. We are addressing this with improvements in our cultivation facilities, which are already showing significant improvements.
Q: Are there concerns about the statute of limitations affecting your amended tax filings?
A: Unidentified_4 (CFO): We have filed or are about to file all necessary amended returns for 2020-2023, and we have not encountered any issues with the statute of limitations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
