PLNHF - Earnings call transcript Q1 2022

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Operator

Hello, everyone. Welcome to the Planet 13 Holdings 2022 First Quarter Financial Results Conference Call.

As a reminder, this conference call is being recorded on May 16, 2022. 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 I now Planet Instructions] Head [Operator will of Mark over Investor Kuindersma, to Relations for XX. turn the call

Mark Kuindersma

website, EDGAR and as statements, Thank you. XX First the are planetXXholdings.com. XX-K, press available XXXX Quarter including for on The website, us results today. the today. on Holdings released thanks and financial release, Good well Planet joining MD&A our SEDAR, everyone, as afternoon, company's and SEC financial

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

and could to does statements as assume call. results results those or the are and these detailed results events and SEDAR, differ As in call we or in this statements of company in not the United on for that made of information, actual in encourage Exchange materially except company's made herein. obligation any such these filings from related Securities forward-looking Commission a factors revise affect result mentioned uncertainties, and Risk the to applicable that today's forward-looking any listeners conjunction and conference are any The may by public available are read with call. the events. risks or this intention disclaims law, predicted Planet statements update XX date or of with to disclosure required as liability

both to we measures. will In GAAP and refer non-GAAP addition, financial

reconciliation measure, website. refer U.S. indicated. dollars, non-GAAP press posted call to please comparable most on our and U.S. statements our directly this the unless are regarding in to information on discussed dollars, presented results the financial in otherwise financial today's release measures XX's are Planet and For GAAP

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

Larry Scheffler

and Good going first let to in since thank our discuss on in X.X ago. California Nevada our later We're we our growth update call. initiatives afternoon, keep participating call and call. everyone, performance Bob provide We'll you short last months talked to you in the this for about quarter an other and

Vegas. by up, and traffic also about January was are February all macro talked season for XX% into some last we March year, and months As new slowest of lesser and Las sales. for of as improve retail concern. starts tourist to pick we Despite our last COVID the the traffic less in significantly share and And April Nevada in tourist over saw slower added We all becomes year impacted quarter, tourist maintained dispensaries traffic Omicron. the peak a this around the in still market, the

February. million from December. We million in $X -- customers. delivery, was traffic Nevada extremely volume down environment, million. from total visitor revenue tourist related to for directly SuperStore generated statistics, SuperStore, towards wholesale from compared Nevada, and million curbside Medizin January lower lower continue The and revenue sequential tough of Nevada $X.X very tourist and in $XX.X was to we and XX% Vegas $XX.X in on to other tourist $X.X complete well than Las locals in Based a tilted In compete well more million QX and extremely

line hit targeted sales and our offerings state's in Medizin like and dispensary locals at curbside sales the with figures. delivery Our

in entire space growing Nevada. consider state when Nevada a especially for in X% continues as This sales impressive QX. in across Our you incredibly taken to after well, is is roughly QX. shelf wholesale perform we've sequentially the XX.X% sequentially XX.X% growing This was more down dispensaries

HaHa Our broad-based for market vapor edibles research both in According strength. concentrate beverages. the a QX; X% portfolio Headset, and XX% showing at categories of TRENDI is embedded the was firm to and X% of

ahead line typical develop carefully tourist gas as We're impact visitors pick with trends. in XX we're increased typically inflation, with Looking which to monitoring shoppers -- Las tourist how starting numbers, up seasonal which see XX at Planet California, sales me, higher from Vegas Planet especially prices, shoppers. for can trends Nevada, over-index excuse

continue these update trends the to see on how progress we you We through year.

due March significant the of the QX X, California, first given unique California including flower with the closed with and small Omicron to build disruptions, wholesale facility facility. Seeing been of Green integrate We've On Sales us to pattern quality strains. to cultivation Wave of allowing May us and lines weaker COVID into on in into XXXX, brand to restrictions. our added We very expand Florida has Wave cultivation vertically firsthand were California. batch the confidence the with Turning facility, down the staffing we of time. and from employees. first our and out acquisition this Next consumer Next off for our crossover introduced TRENDI, decision Green X, impressed

the $X.X wholesale during launching super HaHa, up by quarter. enough edible California will then and million available our be we we months, We be the in initially In popular both vapes and once store coming concentrates generated lines. supply. at total, These our at in followed will built

Looking for that from driving of coming will XXX using unlock or on-ramp to freeway. time California, the the adds XX of directly the store be minutes the beach our completion anyone ahead highway major about in the

side, in profitable With our financials. presence. small and wholesale the will the expand of Dennis to focus California discuss that to On on be that it our over wholesale markets pass I'll brand world, operations is one that, challenging our recognize we the the most

Dennis Logan

Thank you, Larry.

everyone issuer. domestic we stated I under I Before U.S. that begin, are like in and are dollars, unless GAAP discussed reporting and call a stated specifically on numbers remind to would otherwise, that as are U.S. all classified today's U.S.

generated increased QX on pressure Despite Omicron, the into with attributable in expansion during Nevada, to California was QX XXXX, over period. carried in disrupting inflation, our significant operations California QX along Nevada The putting in growth tourism consumer. approximately we $XX.X from headwinds these million increase macro the business. wholesale over X% in increase our the So headwinds, year with revenue and an prior and

seen the Las QX, in the ahead traffic with Looking typical pressures we in are tourist tourist facing April, at seasonal more stronger have have of traffic. and but potentially line macro the aware could the very consumer on impact Vegas that trends,

weaker prior from sales customers XX.X%, drive XXXX hand, pressure the being of over mix. with change by last in California the of a growth -- Specifically, due balance year factors. is a stimulus Vegas, higher coupled The to and of gross price in of year consumer with inflation take in tourist in higher more portion gas. they QX a the overall the consumer compared California quarter. compared pricing rates decreased margin to tourists lower, portion to interest sales XXXX, in among was the other typically were margin the lower and were tourists to position down when a XX.X% the local in dynamic, wholesale than Las view of us is as this checks The impacted cautious quarter different in to leading QX Lower were of year. year Gross was part

was We term, $X.X pricing offsetting long integration this expense vertical to with and pressures. gains margins automation and from XX% quarter, in QX. continue target the marketing down or Sales million gross $XXX,XXX for higher from

the on quarter, Wave $XX.X company's We expense $X.X in domestic The to with million we line top transaction $XX.X in with company the during marketing and QX. the expenses. focus excludes experiment approximately the QX revenue. quarter a transition million from the by optimal onetime continue inflated U.S. and Green down maximizing spent to the administration share-based of million associated status was This on general expenses XXXX. in Next sales with QX with mix profitability compensation issuer SG&A over that and XXXX finalized approximately

For the some being biggest wages. the anticipate year, balance of on the pressure, one cost with we

acutely constrained income and forced into current the the are operating revenue of immense current profitability million, cash in XXXX, capital cash generated market, the And a and environment positions, macro The unprofitable we obligations. debt of company company positive cash operations. payment on no are providing In debt unfavorable aware our March prioritizing quarter. we being of XX, cleanest focused a with financing of balance capital one equity sales risk have fund a and and any on flow the growth. had flexibility flow tax are or as removing over and to of $XX.X We

priorities are and of cultivation capacity. capital the Our our Nevada expanding operations our Florida continued build-out

that, with to of to pass requirements the on have all We and Bob. build-out our the our we'll of complete CapEx update to continue priorities, each the call the of initiatives. market periodically strategic And on capital and over hand I'll

Bob Groesbeck

Florida, prove dispensary map. We've market out announcements other the higher-producing and Walmart destination successful This progress Medizin of Home the dispensaries we've in to road local our sales. In in making and to is to been announced of and continue Depot, is local our retail we'll a build-out the at in state. setup high-traffic adjacent good Each Thank the neighborhood far, you, and lead-up X roll the Dennis, afternoon, significant start those Florida to of so everyone. our dispensary thoroughfares of making major on like one Nevada, a or typically stores. dispensaries grocery on

the on track dispensary producing harvest to production line and also Our openings. cultivation in with build-out start were

while genetics, regulators reminder, significantly in our the the flower climate to a high-quality allowing new revenue is early and with and the disclosed indoor, and Florida. At maintaining all to time from doing of we additional out operations expect increased after Combined lounge, into grow up part sales infused time are to about for. are regulations and We're costs, build-out the California are of on the Green year. track time, of build exploring various entirely our revenue speeds California. premium for lounge Next and a is our partners plan cultivation Nevada, we've reduce on As controlled, be footprint. The with ability facility has to ways feel the drive the known market, patterned SuperStore starting In convert building next become restaurant we opportunities facility. modular we flower in diversify core working us in quality same at the premium prefabricated good customer to to produce diligence type and It line traffic. the an same same restaurant of on our Wave the cannabis XX drive with to Planet proven modular previously

synergistic potential with the the remaining location use cannabis our space around Las given and options think designers We prominent are district. the In fit the Vegas club due closely adult on Vegas the that museum, we at operators to these Strip we and SuperStore. entertainment Vegas diligence are addition with Las between nightclub our negotiations squarely working entertainment the traditional Las

approval focus for our once opportunities gross currently the to that to we square as on margins, will update profitability ultimately, unlock feet on market further do into we regulators. nightclub. We have license Vegas the everyone in diversified as time, dispensary, expansion facility in received profitability. we XXXX. the our space still delays. they With Overall, But clarity improved available. open our maintain and XX,XXX when continue the these will again, And lounge wholesale and will And Medizin cannabis of not we Thank continue entering in year. flow for implemented a tough profitable drive I company, participating. lines traffic, and that will on the indoor agreements. improving cultivation from revenue more wholesale increased sales develop. and in continue have that to XX% thank operating Nevada and integration are given In is and profitability as Las in cultivation do, will state increase the customer expansion a regulatory more build-out is cash place the will focused by insight the be at this operations accretive X% on the and now be have plan add that to held Once while you. to flower. when at began we our on operator you restaurant, leverage again increasing In premium like XXXX, share reserved expanding grow in through and would this In Florida, macro believe courts said, California, into developing I'd In legal be vertical any we to up operating April license and will Illinois, we ask focused share our plans questions. of are executing the This such in growth to Bell and We for background. this

Operator

is question Burleson Bobby first Your Instructions] [Operator from from coming Canaccord.

Bobby Burleson

like out. to not if audio else, happened the I'm going this sure seems was it anybody but in and

I and any little Santa a had and about So consumers a missed SuperStore sensitivity seeing at may what doing I of question the what those you're bit. you're Ana. are what consumers, just contrast have price in seeing between

be differences there. any Just on may color

Dennis Logan

Bobby, can the in. stab others that, Sure. at and it's I'll Dennis. a take jump

the So tourists SuperStore, $XXX range. in biggest coming ticket 'XX QX Average QX was really the number I in store. line think for 'XX QX 'XX QX with impact us, that and to of versus the was

average in were the was up are in was $XXX, with that the with state's it in -- -- the And as 'XX was of around down over in mentioned, Larry the Medizin, line customers our same at it QX but -- down. was QX. price It revenue. actually numbers than to Same from prior QX So QX, the was good. significantly line ticket that with same decrease line and increased QX number in

where a -- didn't of April then really location, the It's into number in see and that's we're so more specifically back than it in tick at up we store we January, February, in the last March, seeing to and coming issue, QX. County as was numbers have Orange And year May. Nevada. those average ticket So that really tourists

number range coming and back customers QX We California. in. X% seems line solid But at about So little bit a to off were and $XX 'XX a in coming customer average in growing. ticket compared of was off of, the 'XX customers QX in in that and traffic is overall,

average with offering mentioned, margins. integrating And on-ramp and our own and under Larry up. that into able the if should store that introduced operations, think Green will we as ticket can I maintain we're more there our we see to push in number Warner Boulevard, acquisition tick that traffic Next into -- be XXX capture Wave vertically brands that

we back significant should of improvement So a California see the 'XX. over half in

Bobby Burleson

Curious quick Vegas. seeing the of Las the traffic are now? terms for Great. tealeaves And summer? the tourist of you right look a just then setup What in like in in terms What follow-up. guys

Dennis Logan

Yes.

Larry? that Now the over I'll turn ground. and to guys the on Bob

Bob Groesbeck

however. even the some lot say events We're a due traffic an and area. particularly Bob. tighten significant prices, nice already in belts the come had to and impact, here going are gas food, it's Bobby, last part economy here hi. of events some seems talent. with Folks rising We're We're We at traffic. optimistic. seeing an the caution, latter just to really having It's concert rents, it's to think, to their impact, concert uptick, of with Again, It's the overall solid. when starting have they arena, Vegas. registers. But that I seeing a I week several big

and we're to -- right trending mark goes, to continue where excited said, I watch traffic are of to balance where -- summer. going as the as and far things are things that we're as but through So now very the closely

Bobby Burleson

think sensitivity And that, you integration out of given progress puts do you've little price made guys advantage of you bit wholesale? a on the an and vertical that

Bob Groesbeck

manufactured it we helps, products obviously, they're think our selling We margin -- mean, up. get it's I a for -- pick I Well, significant. sure. is

drive it customer traffic, to an great create opportunities gives us opportunity incentives register. the So to to for

Operator

question coming Beacon from next Doug from Your is Securities. Cooper

Doug Cooper

quarter? Wave on Next thing. the Green What contribution just First, was in revenue the housekeeping a from

Dennis Logan

in it's March. -- March. Doug, the only XX only last here we $XXX,XXX of month the It let about Like for it around just it we it's it up had -- days to owned -- of for you. me pull was

Doug Cooper

$X.X So Ana did the store then Santa roughly million?

Dennis Logan

Yes, $X.X million, million, $X.XX $X.X million.

Doug Cooper

market, being The if have for on what you increased pertains can level guess, if it -- X taxes black starting cannabis, think, field. and up then more collecting guess, budgets budget -- I credit, in you I the comments playing the I to just any a I recent that activity for cultivation and I proposed policing that July call think particularly, proposal for California the means for California you goes retailer essentially, increased the legal tax little and And guys? that call going to and excise

Bob Groesbeck

is it's you? How Bob. Doug, in dark for ray what's pretty a It's are Yes, Yes. obviously sunshine a while. been -- a over there market

tax anything market. we So rein to those the to particularly the it. get take do on And question But to of whether see signs by really we'll we it's lines. funds off in take way something it is, to big actually law effort where it's the of by allocating they're black course, the if the to on cultivation a can. side, Governor release state And nice that enforcement going concerted along can

we're standpoint, it's a positive. signed, until But that again, talk. from So bill is nothing but

Doug Cooper

for the is with steps of timeline recent…? the What in Right. next that terms

Bob Groesbeck

don't I the priority the the highest is other the day, know of to Governor's lobbyists exact in our it According timetable. Well, Office.

happens. see we'll So what

Doug Cooper

of terms Just guess, if I say the on taken does -- remind, your and in right, Or your your remainder in Can year. -- What that exactly that? of really that. year-over-year? can for terms flattish? more to -- stance the that of talk, sort quantify when of thoughts conservative you you've mean mention taking a you growth Is I mentioned expectations when you you in that bit

Bob Groesbeck

don't why in here? you Dennis, jump Yes.

Dennis Logan

Yes. Make sure -- yes.

look X.X%. revenue QX, at was overall if of sort Doug, we up So

were company the SuperStore. down of as kind of in a X.X% we the whole, For as Nevada

X% and impacted uptick back mean obviously, by the store. to think inflationary the are. to start be unknown the the around tourists of negative over and to slightly balance -- the QX. seem more bit locals by the The a Medizin SuperStore really than We'll pick turns I is the up positive some environment flat from become I this see year. the

wholesale that Nevada products. we're where has we do that's pressure. is, our to upside in picked seeing some business have up of though, So because some nicely best-selling the The quite

-- we out. the come will going is interesting where be be to it So to see mix

think get think translate and through or we where where on decent revenue-wise, quarter-over-quarter that the that continues our as own go, can margins I will tickets and see we again, if a year integration positive should summer vapes will think Again, that be are product we to pushing some our year-over-year flower to basis. getting I our into are for we the the average push our flower XX% own and vertical up our integration, edibles. online, facility more expanded the vertical cultivation with we of market and it

Doug Cooper

environment, market becomes the free important flow it this preservation seems positive. In Okay. cash obviously becoming like and cash

restaurant Would So cash be or to of a which for the allocated far, Maybe bit continuing, tempered on-site for included, changed lounges walking is have coming that obviously with consider Florida. of that? think, from bunch for in license sure, limbo of given, this of some have Or alcohol I plans a wholesale still lot prices of allocated got and would that you you Florida you priority? about a is maybe in that little to been was to your now can't a What now that things in terms that, and Illinois some ever, the down, Illinois? right? or competition away

Dennis Logan

in. not would and than market right, build Orange looked think at what smaller If license that sell that like in you're options but Dennis. we looks bunch if to going the third the out. things anywhere to a than a cautious a a were market approach table. Bob, we into to are you see table. it of take We're see and I probably right, opportunities have jump taking cautious on SuperStore We Illinois, a vertically one I do married in it. it, gets County. we'll when mean smaller Bob -- the mentioned. we're integrate we Nevada can on -- it don't to to But that to granted. you'll put as in it's promising, the really All It's we not us similar are license party. waiting is would all approach, we're If

it. on outpost, it's And that not we'll any right take so given can now, money a find if we're a look Illinois. single right we and the But at opportunity, spending

Doug Cooper

Dennis, is XX, that how budget million Can remind you remind as is what Florida? March just just maybe, $XX to -- Of of CapEx in had us much you allocated the of us Florida. the

Dennis Logan

already sure Well, that to million the our we approach of assets Florida budget $XX and have. the $X we're defying just until that can smaller the overall cultivation stores, $XXX,XXX retail And running. that on lease in we then kind we smaller amount of and build-outs prominent $X the on facilities get sort -- spend in the $XX and million was spent those get taking million We've million of between probably up asset a and Medizin-sized locations range. cultivation like million and them $X.X on rent-free the is of make

So on that good success one. we're some having

of at total Florida. on So cultivation would $XX we're $XX million exploring And had million through QX. options another between of QX, any go mentioned, and the will to that of QX, probably initiative Bob where as of capital call probably that late kind haven't coming we yet. in expansion Nevada come of looking the that off QX, $X it, allocated QX end early up other are million alternatives part And first crop to coming then the the is million $X but online, to

back think to transitioning capital consumption kitchens/infuse the did I into that consumption infuse that restaurants come into debt space to guys. it, get us mention that, being having and a with not and we do [TRENDI] lot consumption lounge. think lounge you to Bob spend lounge, pretty we'll that convert at premium that a we lets to So of caveat -- have hope about one I mean on-site talking offering

all options So at as that looking well. on

Doug Cooper

$XX say million you'll to So of fair million, it it, unallocated… is the have on $XX call let's

Dennis Logan

dry along now sort can our objectives. of Yes. powder we million meeting to it yes, I do make $XX way right mean unallocated to all what’s continue -- sure really is that's

option look $XX sale some on we recoup then have Florida built of build-out. but spend potential is So we to and out, that's -- the after sort that assets, at leasebacks million once we those of it's that

So...

Doug Cooper

wage terms Is on side. the at Or of And we budget? And question consumer? X%, I -- Bell talk to Can all? inflationary guess other talking about growth, the along are When tightening it wage what Okay. you my those we raising consumer. prices can dispensaries X%? in final you about talked the on to pass the you

Dennis Logan

So they don't seem to be. I mean we pushed through some price increases.

are the Our the quarter would of -- up is the were in up of average quarter tickets this I XX% line where say, X%, and average in to sort QX last QX. of ticket dispensary with over we sort

the, and say, it's bud as -- paid the find trying but price some in it not we're on the increases accounting higher of So some and to holding, tender Trying be lots we're really front we -- depends department -- let's intense approach positions. -- level, on position depends pressure to at talent people did of the but people pressure sort for. the and leaving it wages hiring for it nearly to increased on trying at the put to seem our the the pressure as we're is QX. seeing seeing Yes, front, price level. labor They through on

that labor and of way keep force we as good sort and this -- then we -- hopefully we us keep rightsize they as let the So opportunity -- cost for control, to as is look sort people just an go. through we at -- can even its work the of go,

Operator

and ladies conference you This our session attending Thank call. Q&A and you, Thank presentation. for gentlemen. concludes today's

You may disconnect. now

Planet 13 (PLNH) 17 May 222022 Q1 Earnings call transcript