SEATTLE, Dec. 21, 2018 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- CFN Media Group (“CFN Media”), the leading agency and financial media network dedicated to the North American cannabis industry, announces publication of an article covering the Las Vegas cannabis market and Planet13’s success within it. The cannabis industry is projected to reach $75 billion by 2030, according to Cowen & Co., driven by the legalization of recreational cannabis across a growing number of states. Since legalizing recreational cannabis at the beginning of the year, Nevada—and Las Vegas in particular—has consistently been breaking sales and tax revenue records, while avoiding many of the oversupply and taxation problems facing other states.
Planet 13 Holdings Inc. (CSE: PLTH) (OTCQB: PLNHF) recently reported record third quarter financial results showing a 63% increase in revenue and a 78% improvement in gross margins thanks to its successful execution in Nevada. Investors looking for exposure to the state may want to take a closer look at the company ahead of several important catalysts.
Growing Las Vegas Market
Nevada residents voted to legalize recreational cannabis in November 2016 and sales began the following year. Since then, the state has seen a steady increase in cannabis revenue driven by tourism in Las Vegas. Licensed dispensaries and retail stores raked in nearly $50 million in taxable sales in August—the latest month that sales were reported—which represents a nearly 30 percent increase year over year.
The state projects $69.4 million in tax revenue from marijuana during fiscal 2019 with $370 million in taxable retail sales. By comparison, the industry generated $425 million in recreational sales during its first full year, generating about $69.8 million in tax revenue. These figures suggest that the government’s estimates may be on the conservative side, since they don’t factor in 2018’s spectacular results.
Planet 13 Opens Its Superstore
Planet 13 launched the first phase of its 40,000 sq. ft. cannabis superstore near the Las Vegas Strip at the beginning of November. With bright neon lights and a futuristic look, the company hopes to eventually create the first marijuana entertainment complex within the 120,000 sq. ft. former warehouse.
In a recent press release, Co-CEO Bob Groesbeck noted that the first month saw Planet 13 serve 1,400 customers a day. The team expects to see a consistent flow of 2,000 visitors per day when the dust settles, with 90% of those being tourists that want to see the place and what it means to have a high-end cannabis experience in Las Vegas.
A natural next step for Planet 13 is a cannabis consumption lounge; however, current Nevada state legislation prevents this from happening. A recent trip taken by attorney and politician Tick Segerblom could lead to change. Mr. Segerblom and a seven member team, which included five representatives from Nevada’s state assembly and a North Las Vegas councilman, visited San Francisco to see the consumption lounges in person. Segerblom believes that cannabis consumption lounges could open in unincorporated Clark County—which encompasses the Las Vegas Strip and the majority of Southern Nevada’s over 2 million residents—just months after his term starts in January. “I want to be involved in drafting the ordinance,” Segerblom said. “The goal is to get these pot lounges up and running, get marijuana out of our casinos and hotels, and get it off the streets.” Such a development could certainly lead to an opportunity to enhance client experience at the Planet 13 Superstore.
Strong Third Quarter Results
Planet 13 reported third quarter revenue that rose 63% to $4.9 million along with gross margins that improved 78% to $2.7 million serving approximately 776 people per day. Adjusted EBITDA swung to a profit of $275,568 compared to a loss of $1.4 million during the year ago period. On the balance sheet, total assets rose 214% and total liabilities decreased 56%, which resulted in an improvement in shareholder equity over the timeframe.
Looking Ahead
Planet 13 Holdings Inc. (CSE: PLTH) (OTCQB: PLNHF) represents a compelling investment opportunity in Nevada’s nascent cannabis industry. With the opening of its superstore, investors can expect to see rising revenue moving into the fourth quarter. The company’s long-term plans could also turn the superstore into a leading cannabis destination in one of the hottest tourism markets in the country.
For more information, visit the company’s website at www.planet13holdings.com.
Please follow the link to read the full article: http://www.cannabisfn.com/planet-13-revenue-soars-63-as-las-vegas-takes-off/
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