Planet 13 Holdings Inc. (CSE:PLTH) released its first-quarter results for 2019 on Thursday. The Nevada-based company continued to break records generating $13.8 million in sales, more than $10 million higher last year’s quarters $3.6 million in sales.
Planet 13 operates the world’s largest cannabis retail shop on the Las Vegas Strip, and the SuperStore banked $5 million in sales per month over the quarter. While SuperStore saw sales slightly decline in April, despite a strong showing on 4/20, it was the second straight month revenues surpassed $5 million. And the mega store is still growing in popularity with increased foot traffic bringing in more than 3,000 visitors per day.
And tourists are the catalyst in driving the growth:
“With roughly 70% of the customers coming through the SuperStore each month originating from out of state, we expect the value of the platform to increase as it becomes a proven launchpad for national brands and by building awareness of our brands across the U.S. in advance of out-of-state expansion.”
– Larry Scheffler, Co-CEO of Las Vegas-based Planet 13
Planet 13’s SuperStore location is critical to the company’s long-term growth strategy to further expand and take advantage of the burgeoning cannabis market in Las Vegas. The massive pot shop gives the company a leg up on competition in Nevada, and gives Planet 13 nationwide brand recognition if it chooses to expand in other states.
Cannabis retailer lands in the red
Planet 13’s $1.6 million in income taxes wiped its chances at breakeven, and the company was in the red with losses at $1.5 million for the quarter.
Although operating expenses were up for the quarter, Planet 13 was still able to generate an operating income of $344,000 in Q1, compared to $459,000 a year ago. Operating income is normally an important indicator of how a company is doing rather than net profit, which can be influenced by taxes and other income and expenses.
Good cash flow to facilitate more expansion
Another positive from its quarterly results, was the positive cash flow generated from company operations, with $2.6 million from day-to-day activities. It’s a big increase from the $98,000 it brought in last year. And with only $2.2 million spent on property, plant and equipment, Planet 13 still had free cash left over.
This is important because it can ensure its self sufficient and doesn’t need to issue shares and dilute its shareholders positions in order to grow and expand its business. It’s in a much better position than other marijuana companies that rely on their stock prices to keep themselves afloat and fund further expansion.
Planet 13 has not only demonstrated strong growth, but it has developed a business that can be profitable and one that could be self-funding as well. It’s a rarity in the industry and it demonstrates that the company is on the right track.