A recent equity research report has illuminated the immense potential that lies ahead for Planet 13 Holdings in the Florida market following its acquisition of VidaCann.
The report foresees a bright future for Planet 13 in the Sunshine State, especially with the likelihood of recreational cannabis legalization by mid-2026 on the horizon. Investors are taking notice, with a 26% surge in PLNH stock price over the past month, signaling growing confidence in its Florida prospects.
Expanding Presence in Florida
Planet 13’s acquisition of VidaCann, finalized at $63.4 million in May 2024, has paved the way for a significant expansion in Florida. The company is gearing up to launch six new stores by the close of 2024, with three on the brink of opening, including a flagship store in Ocala.
The rebranding of all VidaCann outlets under the Planet 13 umbrella and the introduction of new product lines, such as HaHa edibles, form the cornerstone of this growth strategy.
Operational Progress and Future Projections
In the second quarter of 2024, VidaCann stores witnessed a commendable uptick in sales, moving an average of 1.86K ounces of flowers per store, marking a 120% surge from the previous year.
While these figures show promise, they still fall short of the state average of 2.34K ounces. Similarly, extract volumes per store experienced a 30% year-over-year growth to 3.26 million milligrams, yet trailing behind the state average of 7.06 million milligrams.
The projection estimates that by the year-end, the 32 Florida stores could generate an annualized revenue exceeding $70 million, provided the existing 25% performance gap relative to the state average is bridged.
Financial Outlook and Market Value
As per the analysis, Florida has the potential to become a key catalyst for both top-line and bottom-line growth for Planet 13. Gross margins in Florida currently stand at around 50%, with anticipated enhancements through operational efficiencies.
If Florida pivots to recreational sales by July 2026, Planet 13 could witness a surge, reaching an annual sales run rate of $225 million by the close of 2026. This forecast, built on a 20% EBITDA margin and a 10x EBITDA multiple, could lead to an enterprise value of $450 million, equating to a potential share price of $1.30, more than doubling from the current level.
Opportunities like these are delved into at the Benzinga Cannabis Capital Conference scheduled for October 8-9 in Chicago, providing valuable insights into the future of investing amidst the evolving landscape of cannabis legalization.
Photo: AI-generated image.
