A recent equity research report signals a pivotal moment for Planet 13 Holdings in the cannabis industry. With the acquisition of VidaCann, the company is aiming to establish a formidable presence in the promising Florida market, foreseeing the potential windfall of recreational legalization by 2026.
Rising in the Sunshine State
Emboldened by the acquisition of VidaCann for $63.4 million, Planet 13 is set to expand its reach in Florida. Plans to unveil six new stores by the year’s end, with three on the cusp of opening, including one in Ocala, mark a strategic shift in focus.
Under the adept guidance of analysts like Pablo Zuanic, the rebranding of VidaCann outlets under the Planet 13 flag, coupled with the launch of innovative product lines like HaHa edibles, form the crux of this expansion endeavor.
Growth Trajectory and Performance Metrics
The meteoric rise of VidaCann stores in the second quarter of 2024, with an average sale of 1.86K ounces of flowers per store, showcases a remarkable 120% year-over-year surge. Despite this upswing, these figures still trail behind the state average of 2.34K ounces, presenting ample room for further growth.
Extract volumes per store also witnessed a commendable 30% year-over-year increase to 3.26 million milligrams, albeit falling short of the state average of 7.06 million milligrams. Closing the existing 25% performance gap vis-a-vis the state average could see the 32 Florida stores amassing a combined annual revenue exceeding $70 million by year-end, as Zuanic speculates.
Financial Projections and Ascendant Valuations
With its gross margins hovering around 50% in Florida, Planet 13 is eyeing enhanced profitability through operational refinements. An optimistic forecast envisions a sales run rate of $225 million by the conclusion of 2026, contingent upon Florida’s potential transition to recreational sales by July of that year.
This rosy projection, predicated on a 20% EBITDA margin and a 10x EBITDA multiple, could catapult the company’s enterprise value to $450 million, potentially doubling the current share price to $1.30, as per Zuanic’s estimations.
Against the backdrop of burgeoning prospects in the cannabis domain, the journey ahead for Planet 13 seems fraught with tantalizing opportunities and boundless growth potential in the flourishing Florida market.
Photo: AI-generated image.