In an exclusive interview with The Fly, Planet 13's Bob Groesbeck discussed competition, legalization and more
In this edition of "Rising High," The Fly conducted an exclusive interview with Bob Groesbeck, co-chief executive officer of Planet 13 Holdings (PLNHF), a vertically integrated Nevada-based cannabis company. In the interview, Groesbeck discussed the company, competition, legalization, and more. Here are some of the highlights:
CANNABIS SUPERSTORE: Planet 13 Holdings is a cannabis company in the Nevada market focused on offering an unparalleled dispensary experience and optimizing cultivation efficiencies through technology. On November 1, the company opened the world’s largest, most advanced retail dispensary immediately adjacent to the Las Vegas strip. “We are the best dispensary on planet Earth,” Groesbeck said. “We’re generations ahead of what is a traditional dispensary, not only in size but in the amenities we offer our customers.”
COMPETITION: Groesbeck said there is certainly going to be much more competition in the market going forward, but Planet 13 has a simple three-pronged philosophy to differentiate itself. “We provide great products, great service and great venues and that’s what the Planet 13 superstore encapsulates,” he said. “This is a large open facility with about 16,200 square feet of retail floor space and we’ve tied an experiential component into the whole project.” The store features an interactive LED floor, 3D visual projections on the ceilings, interactive laser graffiti and a choreographed aerial orb show that takes place “every hour on the hour,” Groesbeck said, adding, “The whole idea is to create an experience.”
LEGALIZATION: When asked which country might follow Canada’s lead in legalization, Groesbeck said he hopes that the United States is next but he sees countries in Europe that are moving pretty quickly. Regarding a potential timeline for U.S. legalization, the co-CEO said it is hard to predict. “I’m optimistic there will be some bills that get serious consideration in the current Congress but I’ve been optimistic in the past and nothing has happened…But I think there’s a momentum,” he said, noting legalization in some states. “To use the old adage, ‘You can’t put the toothpaste back in the tube.’”
EXPANSION: Groesbeck said the company is looking at several opportunities outside of Nevada as the industry expands. “Our superstore will probably be the largest flagship operation of the company, but as we move into these other jurisdictions we anticipate building facilities very similar to what we have here just at a smaller scale,” he said. The company has been looking at the Boston market as well as areas in New York, Florida, Southern California, Michigan and Colorado, according to Groesbeck. “We’re just trying to partner up with companies that see our vision and want to be part of the Planet 13 brand going forward,” the co-CEO said.
CHALLENGES: When asked about challenges in the space, Groesbeck said the biggest issue is the fact that cannabis is still federally illegal in the U.S. “That’s a huge issue and a byproduct of that illegality, or Schedule 1 listing, is the fact that it’s very difficult to build banking relationships,” he said. “It’s very difficult to access traditional sources of capital and debt financing is almost impossible through a traditional bank.” Groesbeck added that tax treatment is also very “oppressive” under 280E. “We do need congressional action to deal with these issues,” he said. “They’re all very serious issues that we need to remedy.”
OPPORTUNITIES: The co-CEO said he believes creative operators that can take care of customers on a high level are going to excel. “This business is no different than any other business,” he said. “Customers demand excellent service and great products and if you can do that consistently, that’s a recipe for success. That’s what we constantly strive to do every day.”
CANNABIS USE: Following the opening of the superstore, Groesbeck said he has seen a transition from flower use to derivative use. “Our original location we were seeing probably about 70% of our customers purchasing flower and then 30% was the edibles and extracts and whatnot,” he said. “We’ve seen almost an exact reversal of that as we moved over to this new location, which focuses primarily on the tourist customer.” Groesbeck said he believes the tourist customer is looking for new opportunities as they are only in the area for a short period of time. “As the public gets more knowledgeable about the products and product lines, you’re seeing a lot of new folks coming in to the industry looking for those opportunities other than a traditional smokeable product,” he said.
INVESTORS: As investor interest rises in the space, Groesbeck said it’s important for investors to dial in on earnings. “There are a lot of companies out here that have spent large, large amounts of money trying to acquire licenses and be in multiple jurisdictions but at the end of the day it’s all about money,” he said. “Does the business have the ability to generate revenue and by virtue of that, does it generate profits?”
OTHER CANNABIS STOCKS: Other publicly traded companies in the space include Aurora Cannabis (ACB), Aphria (APHA), CV Sciences (CVSI), CannTrust Holdings (CNTTF), Cronos Group (CRON), General Cannabis (CANN), Canopy Growth (CGC), Tilray (TLRY), Innovative Industrial Properties (IIPR), India Globalization Capital (IGC), ICC International Cannabis (KNHBF), Biome Grow (ORTFD), MediPharm Labs (MLCPF), Indiva (NDVAF), OrganiGram (OGRMF), KushCo (KSHB), MedMen Enterprises (MMNFF) and Elixinol Global (ELLXF).
“Rising High" is The Fly's recurring series focused on cannabis stock news.