Planet 13 Holdings Inc. (CSE:PLTH) shares jumped more than 12 per cent on Friday after the Las Vegas-based cannabis retail company announced plans to enter the California market a day before.
Planet 13 is set to expand in Santa Ana in Orange County once it purchases a cannabis sales license and lease from marijuana retailer Newtonian Principles, Inc. The Nevada cannabis retailer will make a $6 million payment and issue more than two-million shares (worth around $4 million) once it receives state and local government approval to acquire the Newtonian dispensary.
Planet 13 retail business model in Nevada has seen success with continued sales growth, especially at its Las Vegas SuperStore location — the world’s largest pot shop. And the company hopes to continue the same trend in the larger California legal cannabis market. So far, Planet 13 has enticed consumers with its SuperStore becoming a tourist attraction that could host big events in the future.
California a logical next step
Planet 13 hinted at the possibility of moving into other states and with California’s huge market for cannabis and close proximity to Nevada, it’s a logical choice. Location is a big reason why its Las Vegas stores have done well and the company considered similar factors when looking at California:
“Our team considers many factors when determining the feasibility of a Planet 13 style store, with the location being the single most important criteria. After a thorough and deliberate search, we identified this excellent site located three miles from the South Coast Plaza Mall, which hosts 24 million visitors a year and is just a short ten-minute drive from Disneyland, with 18 million visitors per year.”
– Larry Scheffler, Co-CEO of Planet 13
The Las Vegas retailer will use the same strategy of locating its stores near high tourist foot traffic to boost its Santa Ana location sales. The company’s research team did its homework, which is a good sign for investors because not every company does its due diligence before expanding, and Planet 13 is showing its location strategy prowess with the move.
With a focus on tourists, the company indicated in a release it intended to “replicate the Las Vegas experience with a California feel, creating a must-see destination in Southern California.”
Why Planet 13 stands out from its peers
What separates Planet 13 from other cannabis retailers is its focus on a carefully executed business model before looking to expand. While the company is still expanding its SuperStore , the early sales results have been impressive. The U.S. cannabis retailer is coming off a strong Q1, and although it didn’t produce a positive net income figure, it also wasn’t that far away from breakeven.
A move into California will help the company build on its impressive results thus far and could make it a leading brand in the U.S. cannabis retail sector. With scrupulous attention to its business model for its new location in Santa Ana, Planet 13 is giving itself a good chance to succeed from the start.