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The vertically-integrated multi-state cannabis company Planet 13 Holdings Inc. (CSE:PLTH) (OTCQX:PLNH) announced on Thursday that it's acquiring a Las Vegas-based cannabis dispensary.
What Happened: The company's wholly-owned subsidiary MM Development Company, Inc. has entered into an asset purchase agreement under which Planet 13 will acquire all assets required to operate a 3,158-square-foot Nevada dispensary.
The acquisition deal also includes cannabis and non-cannabis inventory and other items along with a medical and recreational license from Exhale Brands Nevada LLC.
In return, Planet 13 agreed to pay $6.9 million plus the value of the cannabis inventory. The sum is comprised of $4 million in cash payable at the time of closing and $2.9 million – plus the value of the cannabis inventory at closing – payable in the form of a secured promissory note due a year from closing and secured by the assets being acquired.
Why It Matters: The company's co-CEO Bob Groesbeck, explained what the move means for Planet 13.
"Increasing our scale, operating leverage and verticality in Nevada is one of the most cost-efficient levers for profitable growth we have, and this dispensary couldn't be a better fit for our portfolio," Groesbeck said. "Their location and more local focus customer base complement our SuperStore and other Nevada neighborhood stores. Adding more dispensaries in Nevada allows us to benefit from increased verticality, expand our branded market share position, and share fixed costs across dispensaries."
Read Also: Planet 13 Reports 20.3% Revenue Growth In Q2 2024, Expands Florida Operations
What's Next: The acquisition is expected to close once all conditions have been satisfied, including receipt of all required regulatory approvals including approval from the Nevada Cannabis Compliance Board concerning transfer of the license and approval of the transfer of the business license from Clark County.
Meanwhile, Planet 13 has been ramping up its presence in Florida via the acquisition of VidaCann, which was completed for $63.4 million this past May. The company plans to open six additional stores by the end of 2024, with three already set to open soon, including one in Ocala.
Planet 13’s strategy for growth in the Sunshine State, comes ahead of possible recreational cannabis legalization by mid-2026.
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Planet 13's shares traded 2.56% higher at $0.6 per share at the time of writing on Thursday morning.
