PLNHF - Earnings call transcript Q2 2021

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Operator

Hi, everyone. And welcome to Planet 13 Holdings 2021 Second Quarter Financial Results Conference Call.

As a reminder, this conference call is being recorded on August 26, 2021. At this time, all participants are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session. at questions. for provided queue analysts be for up will that research time to Instructions Instructions]. [Operator will I the Investor turn now Relations Head Mark for of Kuindersma, Planet XX. call over to

Mark Kuindersma

joining on afternoon, are SEDAR and second Good available XXXX were financial on press results our as today. financial Planet discussion statements, you. Thank and quarter thanks for management website, XX us planetXXholings.com. everyone, Holdings' The release, as released well today. and analysis

like no to call of prove the I materialize. such the we'd or of or a forward-looking to Before management's information accurate listeners over portion will estimates remind management, future today's statements. pass that There assurance will include circumstances discussion developments, be results expectations can to be that or

risks results the predicted uncertainties, the with result detailed As those encourage results results may materially listeners these statements affect a to these read company's in filings on events. are conjunction from of could are we events or that differ today's made And actual statements in available forward-looking that SEDAR. in call. public factors or Risk and

the are liability in assume are statements dollars herein. in presented mentioned disclaims statements update otherwise intention discussed law. call conference in made XX are financial of or any unless for XX date required does US Forward-looking during It of information, not Planet call. the obligation call the to except disclosure such relating or company this to US Planet applicable any indicated. revise and as as this dollars any results by

CFO. over Larry Inc. Co-CEO Planet and Scheffler, Co-Chairman Groesbeck, pass Scheffler, Co-Chairman and the Co-CEO; Holding call On Larry to the call Bob now have XX and Logan, Dennis will today, Co-Chairman and of I we Co-CEO;

Larry Scheffler

boost operations added around cemented his on performance QX Good grow, must-visit our afternoon, playing Vegas to Bob just first we have over further performance and trip record for and this and were which The Planet a retail XXX% time not we strong from growth $XX.X the over $X.X a Month-by-month, and is driver have other and sequentially going and SuperStore, on The absolutely our overall to ever amazing our in is potential, California the to an experience completed XX throughput the our single over $X to quarter which every We've expansion month of budget. on update everyone, our data, Vegas. watch XX.X%, dispensary with month of thank SuperStore days. share mid-September in Medizin and May surprisingly store on we of around million in a now space in new the available QX Las and a $X.X and discuss million for customer increase of It's California the it wholesale Nevada call. months QX a year from for coming couple strong finish for the month $X.X to participating drivers we We'll November. Nevada operations been cylinders seen super expansion provide you later grown sales reputation being let Las of XXXX million, all including returned. the advertising, doing the a down $X a – busiest customer Breaking and increase providing customer, and million not second In month We're a with a $XX.X Nevada built done. last from highest on necessary from million itself quarter retail third and In pre-COVID. share perfected our XXXX. second I'm great and and sales, reached quarter as in experience, any curbside SuperStore have initiatives was was tourists The call. XXXX. for and largest media. delivery. on Nevada QX, growth million up revenue. our million the delivery from word-of-mouth SuperStore for through upgraded our XX.X% other entertainment social in-store generated and and when continued of

upon the make And experience. TikTok at are and marketeers. week entertainment, additional Facebook the of throughput, are best thousands customers and their to they their customer to incredible experience continue diversity We posting see to what people enjoyed on always, have family there overall our improvements the the SuperStore. as products thousands Every Instagram, for friends of and

quarter other The prior grew the XX.X% quarter. business, which wholesale our the large was growth driver in over

and the According the would market. be for flower I number had state brands every now the concentrate there and across is edibles the brand Headset, number supply. brand gaining number six brand brand three recognition the our two number HaHa the enough of HaHa and our TRENDI three if know is to Our are we beverages. vape brand in

be what Our Allegiant has medicine NFL forward to our our medicine on Stadium impact the at store. continued dispensary that has first fans to solid with neighborhood looking we're performer and season a and seeing

with Looking July mandates again. August, marginally remained QX. throughout Las into Traffic Vegas ahead implementing with to August and strong softer being mask

to over to successfully under any, our ready if to I'll effect, of bolstered we're environment. challenge necessary will monitoring are by come our to the Regardless scenario. meet steps be see any to the While restrictions measures working able potential Dennis, it maximum measures, that, further discuss carefully there lockdown to potential might experience restrictions, and under With we're operate our of any be taking any financials. COVID what we don't into pass on

Dennis Logan

Thank you, Larry.

today's otherwise. to everyone discussed are the unless remind that all numbers specifically begin, just call I in Before dollars on stated US I'd like stated

strength in million. July, year month total QX August, number. our And meet $XX.X generated revenue improvement a increase into As quarter of of with XX% on Larry over California QX In generated we $XX.X XXXX. to mentioned, track a we and in XXX% The are continuing over first a QX. was with that million record QX, company last a open,

optimize awareness quarter marketing revenue. XX.X% margin biological time of from and We the customers to the larger we a up XX.X% up to as Gross as of last our expect tourist California improved assets impact share ramp programs. build made over before

margins We in fall will our to from and slightly than operations as a up. expect QX expect Nevada The has margins we structurally market our XXXX, Orange gross that ramps dilute and overall. marginally XX margins County the Planet lower pricing contribution California the

in expense the customers return target as marketing California. to and marketing for XX% more $X.X Vegas of million continue the and heavily term. of margins we Las quarter, began gross with We tourist Sales excess increased our marketing spend was this in long in significantly

XX time The to anticipate longer G&A and percentage spent revenue, up our Planet XX over the last XX% expect higher it XX.X% or as in decrease company our revenue Orange revenue $XX.X a of to As This sales next continue will of California of to revenue. increased increase the the million as million or optimize stores X.X% in we again from location. start to build on California we and County from start we marketing and term, generate quarter. quarter $X.X X.X% Planet channel in awareness quarter for marketing in we

G&A fully and the Orange as of to County quarter store grows. revenue staffed and watermarks, of in a from expect QX fall a revenue Orange as this as have be up County high to as percentage XXXX revenue portion expect already We we the

cash million generated XX, company of in a as taxes. As a a June This Cash included balance million result million. income cash XXXX of in over $X $XXX $X operations. a number increased flow of the had of QX payment XXXX from

added Orange by also $X.X million We CapEx on from County. spent financings $XX.X offset million in

CapEx CapEx. year, this $X expansion Orange million Superstore cultivation spent and at on the far maintenance SuperStore, our on at all for County one build-out, $X our Phase-X facilities So we've approximately the $XXX,XXX million the on of completed improvements outstanding dispensary

As currently for other we finalize monitoring into funds taking commitments the Chicago The around are earmarked dispensary. balance legislation account before consumption current opportunities, the of expansion plan is build-out a after accretive the lounges we the Bob and M&A activity and elaborate, build-out. including construction for of budget will

Looking of planned SEC with ahead I'll to GAAP And with over that, transition we reporting registrant anticipate and date XXXX. call US a Bob. XX X will the to Planet January effective pass become an

Bob Groesbeck

good Thank afternoon and everyone. you, Dennis

of As a fantastic was first We budget. indicated, COVID out-of-state completion is with on mandates mask on Dennis and QX The momentum. well, continued our destination expansion place quarter, indicated. initial and time QX the with positive our next California currently are strong tougher sales with operating in expansion Nevada off and encouraging. growth in we in backdrop a secured despite as Nevada started performing

on budget. Our July one Orange on County in opened time and store

on top million number $X As million month and a its and facility. of $XXXXXX roughly licensing build-out County that first a that month. $X about generated Orange spent in on is on of reminder track to full operation further this we

We disappointed us we sales Larry's time position are the time. reputation first Orange say, people the Las opened it seeing reputation I'd ultimately start and growth to earn location when in echo I'll Vegas build to people as in comments that and numbers. again Give we awareness, takes market. County the people remind many our sales. were To initial and those

been Through has a of it selling robust We cost-effective and in This good high long counts in a Chicago. with and also of areas a population and city opportunity done Planet cannabis. use identified XX we've the experiences we our expansion tourist incredibly are received one next tourist large partnership in license expansion high cannabis at account We've way. a market. -- our dispensary targeted adult creating style an

starting steps dispensary. recognize still the to there number are do location, that on potential and of winning a license opening are a We our research between but

shareholders update process. as about know dispensary. of process Illinois Planet progress will our applicant social lot equity for a was there opening loyal specifically We social new the are to equity licensing I a partnership this structure XX designed and applicants. questions towards dispensary continue The we

a and and applicants number seen provide partner to run open companies to dispensary. necessary of support ourselves successful You've a with the other these

Nevada created to a provides subsidiary In Chicago dispensary on of LLC extremely think we much risk. our license. own great As are share a at more with structure, it this I that upside can are Planet deal of low and continue a we will next time, have months. part details XX licensing but Illinois shareholders a drafting at the Planet to look very the XX vision can't the deal regulations this which and pleased cannabis over like monitoring lounge will what the time a the and share Larry the as allowance regulators we confirmed details Vegas XX input to are will Planet should needed. once Las and more of we lines several and I grand provide regulations and

cultivation or We Nevada our in network for vertical dispensaries M&A by increases in dispensaries also that markets. continue bolt-on to California; pursue neighborhood supported SuperStores of in cost-effective and integration new opportunities local new

Our with now and continue With to the excited the operations I in month like and Overall, everybody to and operator down grow today line market accretive to said time opened over long-term ask our budget taking and company the grow shareholders. this to open to for want to XX our value We've for I'm up the Orange in million I by expansion to incredibly now participating Planet call would thank position $XXX it's very today's have is pleased create Nevada month. us share in and walked to next questions. and that are being to to awareness sales. path for ultimately County and still M&A. on on pursue

Operator

Burleson Our Canaccord. Instructions] question question. Please Bobby proceed with comes with your [Operator from first

Bobby Burleson

taking Thank question. for my you

XX% it congratulations store driven So on growth, was more that existing doors not up wholesale is stores? whether penetrating Curious sequentially. by the that shelf growth at space you're or opening or

Bob Groesbeck

Bobby again. thanks. this. This with is Bob. talk Good to I'll take you

offering I continue mentioned. of you reorders new It's of feedback. from The a the existing lines think we're combination positive received very product everything to customers we're increase the seeing throughout it's -- just course state our month-over-month.

pleased here some with really the those upside. we're new even we market progress coming numbers. on we excited and But got offerings there's additional shortly. into we're think know can the We've We expand about So that.

Bobby Burleson

supply demand guys? you did capacity you outstrip terms in capacity? for are curious, guys of -- I'm production Great. How

Bob Groesbeck

into we flower coming is can I a -- instance to shortly. markets. function to again product for offer recently. had lines. And we've line -- as wholesale other that said, retooling demands came It's here a just sugar meet got we've out couple do It some demand our it's out. the soda also offerings we into those Well, issues meeting the getting of overall. with can't -- -- haven't -- we're It the one of market do again, able expand been initially we thing It's -- our

that's to go. capacity I'm quarters aggressively rectify where online. take very engines we're would additional firing going The I we as cylinders. confident all bring on So probably But But few to issue another that anticipate. working we

excited we're about So demand. meeting that

Bobby Burleson

And just more. Curious then County. about one Orange Great. Ana or Santa

marketing some versus imagine marketing approaches doing profile? off to a different But of there are curious I'd any guys what other the you're It there. curious reflects like You SuperStore? that market? Vegas customer sounds what applying good kind taking are to you kind of Las different specific I'm just start. that that approach you're

Larry Scheffler

Ana. just as great. their this had for day keeping to about keeps and every go there If you've building you that because as Vegas. it's Santa Well, Have every whether takes time That's as one. it. The what it we yet? Larry. to this and the pictures And why our also advertising But seen and what in best I'll you've is and to over that's this They're as here they're And talking friends. seen people happened. excited sending here an thing in and week. through Vegas tourists main use is what's locals we've see Las of it, been think building billboard whether We we yet? through we customers. see down difference be that videos we the good like part Ana when worked got marketeers down more it it's and think was it Santa that -- as we happening down soon is it, I same build I again Las be taking that It into answer in, them. soon in the or get expanding it destination they're is We we than entertainment saying about and model it's they was anticipate feel do our to they

Bob Groesbeck

too. just me let that add Bobby, to

of a bit Santa store one little we is think started the Ana. I the unique in things from scratch that's

fully So yet. not and stabilized associated a travel There's the with tourist market down still is of uncertainty there COVID. lot

the Orange marketing kind of funds, awareness So of our rather. majority the directed in Santa and at creating or metro really targeting funds we've County Ana our area

start it's The and part said. we're of going start So that we to really place. But it to store delivery it's into and now building locals working the it little kind on of a as we're of getting accustomed right the now focusing take traction, aware slower platform. it that as becoming tourist a will will area. to all longer that into But little Larry fall very confident get

Bobby Burleson

Great. Thank you.

Bob Groesbeck

you. Thank Yeah.

Operator

next proceed from [Operator your Northland comes Securities. Please Greg Instructions] Gibas question. question Our with with

Greg Gibas

Thanks Larry, congrats afternoon, and strong questions on the Bob, Good in Dennis. Great. taking for QX. results the

Bob Groesbeck

Thanks, Greg.

Greg Gibas

And the should dispensary guess any I cultivation and manufacturing I -- much, as guess know high you or running? a I timing it's wanted at too state this can't for and early the well? level how to but we I share Chicago getting in up process about think of and plans

Bob Groesbeck

question, great a That's Greg.

we're We've working number potential identified -- working to we've sites. of a sites. So literally mean been I today, identify

the us. great is all of today it's It's Now kind the our pretty fairly it's a will process want Chicago hazard licensing all for quickly. Chicago, around Working unknown. for But of things really licensing. partner because it's here I new guess in we're to -- don't and with again move confident the new

as expect that our your integrated So, we'll well. I'm Illinois place see be we'll hopeful over second and meet locations we fall the next months, we're obviously that the around point, looking to -- work in criteria. market and to with To continue few also that yes, identify into then

some confident at And that looking in we're are that will opportunities in we our meets in we cultivation get criteria here now us to something least tandem. the find at Chicago. So, near-term,

Greg Gibas

in. market yes, I much. too the market And an and seems a can't one it's Great. to Sure. But great exciting like definitely participate share you for realize SuperStore it

Bob Groesbeck

We're very excited.

Greg Gibas

I a Follow-up I level that expect in take side Where to you or and do to you California? should and around sales long when or create then expense marketing guess maybe expect to ramp commentary maybe the it going of how want on as margin of of percentage revenue, things that peak? will out awareness forward. kind of And we your you guess it that kind

Dennis Logan

the Greg, question. thanks for

the think Santa remarks, As building in going I is Orange end QX County Ana it. my I what we peak of yet. and as tourist it's in QX work of said said, to through Bob again on really stabilized in not beginning market And

So, more billboard the focusing local marketing. are we advertising and on

Disney I cetera and basis our going tourist location. beginning really stabilize, be goes. also the on with marketing be to having percentage gauge starts depend area so will think it's kind So, a a peak on especially starts revenue QX that et to when regular the can customer revenue tourist of basis of, spend that market peak, But opening, we QX in -- will at ramp the to revenue of as where

Greg Gibas

got there to owned Dennis It a -- XX% sales year it. And like of in-house a too represented looks ago. That's brands with or topic. represented brands Okay, XX% helpful. follow-up you separate on versus

And guess Just wanted I the introduction third-party of the new that just there to drove of products? ask was decline? lot a it dynamics what

Dennis Logan

It was sales Greg. function a

our had revenue revenue, we overall percentage was nominal of sales brands, much. house record which all because a So, so house products up dollar and was of on a brands as for it of our basis all down our

but on down. our quarter-over-quarter growth a basis on sales year-over-year own brand So, sequential dollar percentage-wise value

and rectify premium mentioned, are, there that Bob flower expansions our cultivation of some one ability with both try and Larry on as flower. provide on So, to side we to rectifying facilities our

we towards of XX% less that recently flower focused speak on as Las this buckets has other the to revenue, XX% returning shutdown shifting products the of to of only mix massive some on of COVID tourists. the tourist product more being you and the and see flower of historical Vegas and rates and been back can to the During more overall balance the by kind consumption with

a So, will as we of in-house and our both brands continue percentage. increase overall percentage think that dollar-wise revenue nominal to

Greg Gibas

Okay, in-store there. revenue me. didn't last sense. for I ask that the guess I to make base about, great. does I consider development. wanted one Yes,

of to some If I new And I additions. or have What to features I you said or noticed ask more for you Vegas if Phase at of But store California the store at that California I expansions X out you guess any kind for to those? there? SuperStore. three could should maybe wanted you're regarding expect we SuperStores, planning complete of and ask next announcement just adding what's And discuss nice X? the now, room of just wanted kind two you Phase

Larry Scheffler

sundries as just XX Vegas, course, type into, get XX-foot type Well, should that we be long Phase of levitation was the out We've here of doing of vendors And cylinders production actually the consumption short to with that they we've registers. In or that always looser cash that our all again, tall, law pie special the wall shop X, That's have We're of -- going the call winner XX-foot And so to a now. back -- new, thing to them September, been operation. trying small small on a they actually X,XXX-square about open California tall are And for it robot we added that talking we're are to store effects. a our an we in scenes We moving written place. we've closer In a device get the some coffee digital a and We're rent Phase going move We working so X lease going to restaurant. us. that of said, of some with they part do be bill production from open of that our talked a robots where beer can by towards facility. behind square itself lounge, weeks just the four-foot nine lot display where the a Row. an Phase work about in two X a the kinds about into And memorabilia added be also retail get Las which to to We'll there. on live, and their atrium then and they XX on consumption on. Ana have get be with end right in Santa last our on a now of products. the pours and are we officials Gucci forward all to we'll lounge. of feet. was for new to things going on the production And adding the about soldiers. the is line XX,XXX choreographing facility. getting items. -- the looser going our to the go will foot it

Greg Gibas

on. Yeah. great. guys. Okay, and I'll Thanks works, things exciting it of Lot pass

Larry Scheffler

Greg. Thanks,

Operator

you. Thank

question from next proceed Our comes question. John Meridian. Visintainer with Please with your

John Visintainer

and of Hey a continued have think progress. dynamics kind forward. on the to quarter, of about couple most Congratulations Yes my and the so been recap answered, guys. quickly the moving questions just

off, good bit on, a given is occurs Vegas. August But how typically of perspective Do and things bit some kind prime of you gave August? First fall you color seasonality from things a travel? typically the one where more the give or can kind the heat, that Las on months little a are in for of in off numbers, tourism color

Bob Groesbeck

yeah hey Bob. it's John, Well, Good question.

people here whether hot. hot So, it's our obviously not. And is But come summer or is month. hottest it's obvious

on again, with new mandate day changes as So What it there's here last like year, towards a has we've just fact the and them as restrictions. they had town. not every the larger the is seems and that not as got nearly venues were really it but – mask They're impact Dennis that's in I to, difficult COVID a alluded detriment generally. as mentioned, an

vacationing pretty it other confident need a kids But Las some probably may the that, that's so that how to factor school families ready impact. shaped for back relevant a in that, getting part latter tour they're there's Overall, more of are going the aren't from we and the the is is with bit So uncertainty because school standpoint. August, have fact Vegas we're up consider to of again. month an

So then going typically again September, into heading are that's But indicator. historically, as meaningful have considerably And to October. slow any and of traffic also, probably back I a in thing course things Vegas we will I down a November, of I then meaningful then think, in want have bit more just one to ramp-up focused aware now. December. convention But don't they think and you be really in and that's on, in Las Vegas

of take to that going that's to ramp-up. So a for bit time

So early next year, larger come online. we'll the start shows seeing back

John Visintainer

hopefully NFL offset cetera. by That stadium et in the near-term Okay. the some

So that nice. be could

Bob Groesbeck

Yeah. helpful. be will that of course. does. to excited That see Yes, what Yeah, We're

John Visintainer

vertical And pricing was the for favorable pricing it's non-vertical all out a integration? get guys of to Does flower that lot dynamics had challenging a change other where for Okay. in regarding of seeking a at Does I continue terms then integrator? the just dynamic you cultivators, producers. question in for for point California the you as

Bob Groesbeck

we've expected be integrated. always Well, to

large margin the own mean, we're California. in alone and that, But the want our margin some look to that on add in important just our pursuing makes opportunities And Dennis, – on if We're it's that products now. fortunate anything our buyer, over leverage I got the we're that's you end pickup got So products it own at don't actively the and on we've side. worthwhile. I our to know, stores. of to project day yeah, vendors. there's our do what we're lines product going a we've

Dennis Logan

I flower worried what's as there. That No, our our our John, own Bob basis our get and and Yeah. we market own mentioned, to But Bob. brands. yes own California a product covers in, and on daily the view off side. we're the need happening mean, on margin control strains

So the always been that's plan.

size what vertical will we'll Larry start II and on our facility we – the are then mentioned Phase to appropriately there the production with size needs so. it So as for, appropriately at in cultivation the it

John Visintainer

Well, Great. Okay. thanks guys.

catching forward again to up Looking soon.

Bob Groesbeck

Thanks, right. All John.

Operator

This Thank participation and the reached at your Ladies disconnect this the gentlemen, and of for Thank and concludes time. a you. session. conference end have we have may you today's lines your you wonderful day. question-and-answer

Planet 13 (PLNH) 27 Aug 212021 Q2 Earnings call transcript