10-K: Planet 13 2025: Revenue Drops, Florida Expansion Continues

Planet 13 Holdings Inc. reported a significant revenue decline and net loss in 2025, driven by market price compression and strategic exits, while expanding its Florida dispensary network.

Summary

• Net revenue decreased by 11.2% to $103,378,829 in 2025 from $116,408,966 in 2024.
• Gross profit declined by 28.9% to $39,872,708 in 2025 from $56,110,446 in 2024, with gross profit margin falling to 38.6% from 48.2%.
• Net loss for the year increased to $63,923,695 ($0.20 per share) in 2025 from $47,796,856 ($0.16 per share) in 2024.
• Impairment charges totaled $29,844,227 in 2025, primarily related to cultivation assets in Nevada and California.
• The company exited the California wholesale market at the end of 2025 and shuttered one cultivation facility in Beatty, Nevada, and one of two in Las Vegas, Nevada, while substantially reducing capacity in the other.
• Planet 13 expanded its Florida dispensary network, opening new locations in Port Richey, Orange Park, Edgewater, Deland, and Pace in 2025, bringing the total to 33 active dispensaries.
• Successfully recovered $10.5 million from the El Capitan legal settlement, including $5.5 million in cash and real estate valued at $5.0 million (net $4.1 million from sale).
• Launched HaHa Soft Chews and partnered with Praetorian Global for ONI-branded products in Florida.
• Opened DAZED! Consumption Lounge at the Las Vegas SuperStore on April 5, 2024.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a challenging period marked by significant financial underperformance, including declining revenue, gross profit, and increased net losses, alongside substantial asset impairments. While strategic adjustments and Florida expansion offer some long-term potential, the immediate financial results are concerning.

Positives

• Successfully recovered $10.5 million from the El Capitan legal settlement, including $5.5 million in cash and real estate valued at $5.0 million (net $4.1 million from sale).
• Strategic expansion of the Florida dispensary network, adding new locations in Port Richey, Orange Park, Edgewater, Deland, and Pace in 2025, reaching 33 active dispensaries.
• Launch of new branded products (HaHa Soft Chews, ONI-branded products) in the Florida market.
• Opening of DAZED! Consumption Lounge at the Las Vegas SuperStore, enhancing experiential retail.
• Termination of the acquisition agreement for a Las Vegas dispensary from Exhale Brands Nevada LLC in January 2025, avoiding a potentially unfavorable deal.

Negatives

• Net revenue decreased by 11.2% to $103,378,829 in 2025 from $116,408,966 in 2024.
• Gross profit declined by 28.9% to $39,872,708 in 2025 from $56,110,446 in 2024, with gross profit margin falling to 38.6% from 48.2%.
• Net loss for the year increased to $63,923,695 ($0.20 per share) in 2025 from $47,796,856 ($0.16 per share) in 2024.
• Significant impairment charges of $29,844,227 in 2025, primarily on Nevada and California cultivation assets due to market price decline and oversupply.
• Exit from the California wholesale market and closure/reduction of Nevada cultivation facilities due to overproduction and price compression.
• Cash flows used in operating activities increased to $14,191,888 in 2025 from cash provided of $5,210,899 in 2024.
• Working capital decreased to $17,996,091 in 2025 from $28,951,955 in 2024.
• Closure of two Miami dispensaries in June 2025 as part of operational restructuring.
• Trece Eatery + Spirits restaurant closed at the end of March 2024, with the space now available for sublease.

Risks

• Cannabis remains a Schedule I controlled substance under U.S. federal law, posing risks of federal enforcement actions, asset seizure, and criminal prosecution for employees/investors.
• Uncertainty surrounding U.S. federal government policies and potential enforcement actions by the Department of Justice (DOJ) or Attorney General.
• The industry is still developing and subject to extensive, rapidly evolving regulation, leading to potential increased compliance costs or operational restrictions.
• Difficulty accessing banking services and processing credit card payments due to federal illegality of cannabis, potentially forcing cash-only operations.
• Significant tax liabilities under Section 280E of the Internal Revenue Code, which prohibits deductions for businesses trafficking in controlled substances, leading to higher effective tax rates.
• Risk of product liability claims, regulatory actions, and litigation due to products designed for human ingestion, including potential contamination or adverse reactions.
• Increasing competition from localized and multi-state operators, potentially leading to price compression and reduced profitability.
• Reliance on operations in limited jurisdictions (Nevada, California, Florida, Illinois) means adverse changes in these states could materially affect the business.
• Exposure to risks inherent in an agricultural business, such as insects, plant diseases, and drought, despite climate-controlled conditions.
• Threats to information technology systems, cyber-attacks, and security breaches could impact business, reputation, and financial condition.
• Lack of access to U.S. bankruptcy protections for cannabis businesses.
• Potential for state laws legalizing cannabis to be repealed or overturned, or local governments to limit applicability.
• Limitations on ownership of cannabis licenses in certain states may restrict growth.
• Potential for FDA or ATF regulation if cannabis is reclassified, leading to new compliance burdens.
• Risk of criminal prosecution or civil liabilities under the Racketeer Influenced Corrupt Organizations Act (RICO).
• Dependence on consumer acceptance and demand for products, which can be influenced by scientific research, regulatory investigations, and media.
• Reliance on key inputs (raw materials, electricity, water) and their related costs, with potential for supply chain interruptions or increased costs.
• As a holding company, dependence on earnings and distributions from subsidiaries.
• Termination of material leases could adversely affect the business.
• Competition for acquisition and leasing of suitable properties may increase costs or impede growth.
• Currency fluctuations could expose the company to exchange risk.
• Difficulty acquiring additional financing to fund growth, especially if federal authorities change their stance on cannabis.
• Conflicts of interest due to officers and directors being engaged in other business activities.
• Actual financial position and results may differ materially from management expectations.
• Increases in cost or reduced availability of materials, equipment, commodities, or energy due to inflation, tariffs, trade policies, or geopolitical events.
• Challenging global economic conditions could negatively impact consumer spending and sales.
• Failure to successfully integrate acquired businesses (e.g., VidaCann, NGW) or realize anticipated benefits.
• Inability to effectively manage growth and operations.
• Issuance of significant number of Common Shares in future financings or acquisitions could dilute market price.
• U.S. federal trademark and patent protection may not be available for intellectual property.
• Co-CEOs exert significant influence over shareholder matters.
• U.S. domestic company for tax purposes, subject to U.S. tax law, and Canadian holders subject to U.S. withholding tax on dividends.
• Market price volatility of Common Stock.
• Difficulty for U.S. holders to resell Common Stock over the CSE.
• Future sales by existing shareholders could reduce market price.

Future Outlook

The company anticipates a positive impact on margin and overall profitability in 2026 and beyond due to exiting the California wholesale market. It expects to revisit expansion plans for the Beatty facility once the wholesale market in Nevada stabilizes. The company continues to strategically evaluate its cultivation and dispensary footprint across Florida. Federal cannabis policy continues to evolve, with potential rescheduling to Schedule III and ongoing legislative efforts like the SAFER Banking Act, though timing and outcome remain uncertain.

Management Comments

• "We believe that the reduction in Las Vegas tourism, both domestic and international in 2025 disproportionately impacted the Las Vegas Market and in particular our Las Vegas Superstore location."
• "An overall reduction in the disposable income of our customers during the year ended December 31, 2025 also had a negative impact on the buying patterns and resulting revenue at our retail locations."
• "The Company increased its reserve for slow moving inventory by $3,619,463 during the year ended December 31, 2025 and has implemented additional strategies including a substantial reduction to its cultivation operations in Nevada to help prevent excess inventory build and reduce production costs."
• "The Company exited the California wholesale market at the end of December, 2025, which will have a positive impact on margin and overall profitability in 2026 and beyond."
• "Management believes it will be able to raise capital as required in the long term, but recognizes the risks attached thereto."
• "Management believes it its more-likely-than-not that the Companys net deferred tax assets related to its loss carryforwards, stock compensation, and Florida license would not be realized in the near future and records a full valuation allowance on these deferred tax assets."

Industry Context

StockSavvy.ai notes that Planet 13's challenges in 2025, particularly price compression and oversupply in Nevada and California, reflect broader trends in mature cannabis markets where competition intensifies and illicit markets continue to exert pressure. The strategic exit from California wholesale and reduction in Nevada cultivation capacity align with industry efforts to optimize operations and improve margins in a challenging pricing environment. The continued expansion in Florida, a vertically integrated medical-only market, positions the company in a less competitive, albeit still regulated, landscape. The ongoing federal discussions around cannabis rescheduling and banking reform (SAFER Banking Act) highlight the significant regulatory uncertainty that continues to shape the U.S. cannabis industry, impacting operational efficiency and access to capital for all participants.

Comparison to Industry Standards

• The reported gross profit margin of 38.6% in 2025 is significantly lower than the 48.2% in 2024, indicating a substantial decline in profitability per sale. This is below the typical range for well-established, vertically integrated cannabis operators, which often aim for gross margins above 50% to offset high operating costs and Section 280E tax burdens.
• The net loss of $63.9 million in 2025, an increase from $47.8 million in 2024, suggests ongoing operational inefficiencies and market pressures, contrasting with some larger, more diversified multi-state operators (MSOs) like Curaleaf Holdings, Inc. or Green Thumb Industries Inc., which have demonstrated paths to profitability or positive adjusted EBITDA in comparable periods, albeit with different market footprints and scale.
• The significant impairment charges of $29.8 million in 2025 on cultivation assets in Nevada and California reflect a common industry challenge of oversupply and price compression in certain state markets, a trend also observed in other MSOs that have had to rationalize their cultivation footprints.
• The expansion into Florida, a vertically integrated medical market, aligns with strategies seen from companies like Trulieve Cannabis Corp., which has successfully dominated the Florida market through extensive retail presence and vertical integration, suggesting Planet 13 is pursuing a proven model in that state.
• The recovery of $10.5 million from the El Capitan settlement is a positive, but the initial misappropriation highlights financial control risks that are not uncommon in a nascent industry with limited access to traditional banking.

Management Changes

Corporate Governance

Legal Proceedings

• On January 22, 2024, the company initiated a lawsuit in Santa Monica, California, against El Capitan, its founder Andrew Nash, Casa Verde, its managing member Karan Wadhera, and Jamie Nash, seeking approximately $16.5 million in compensatory damages and other relief for alleged fraud and misappropriation of funds.
• On February 28, 2025, the company secured a settlement with Casa Verde for the remaining approximately $2.1 million of the WAB Funds, bringing the total recovery of funds held at WAB to $5.5 million.
• As part of the settlement, the company also obtained real estate property formerly associated with Andrew and Jamie Nash, valued at approximately $5.0 million, which was subsequently sold for a net value of $4.1 million on July 15, 2025.
• The internal investigation regarding the El Capitan matter remains ongoing, and the company continues to vigorously pursue its rights to reclaim the remaining misappropriated funds.

Related Party Transactions

• Building Lease: The company entered into a long-term lease agreement with Loop's Nursery (primarily owned by David Loop, a board member) for its primary cultivation facility in St. Johns, Florida. Payments for rent and associated costs totaled $3,421,058 in 2025 (vs. $1,208,531 in 2024).
• Promissory Notes: Related party notes payable to David Loop and Mark Ascik (former Co-President Florida Operations) totaling $1,500,000 (face value) were assumed as part of the VidaCann acquisition. Interest payments totaled $112,500 combined in 2025 (vs. $75,206 in 2024).
• Florida Apartment Unit Lease: Effective March 1, 2025, a 30-month lease agreement with PRMN Investments Ltd (primarily owned by Robert Groesbeck, Co-CEO) for a Florida apartment unit used for executive travel. Payments were $51,958 in 2025. This lease was terminated in November 2025 by mutual agreement.
• Consulting Agreement: Effective September 19, 2025, a three-month consulting agreement with Off the House, LLC (owned by the stepson of Robert Groesbeck, Co-CEO). Total contract payments were $44,650 in 2025. $5,935 was due to Off the House, LLC as of December 31, 2025.

Stakeholder Impact

• Shareholders: Negative impact due to increased net losses, declining revenue and gross profit, and asset impairments. Potential dilution from future equity financings. Positive impact from legal settlement recovery.
• Employees: Operational restructuring, including closure/reduction of cultivation facilities and Miami dispensaries, may lead to job reassignments or reductions. Share-based compensation plans aim to align incentives.
• Customers: Expansion of dispensaries in Florida provides increased access to medical cannabis products. Introduction of new branded products offers more variety. Closure of Miami dispensaries reduces access for some customers.
• Creditors: Repayment of some promissory notes (VidaCann Shareholders, Lafayette State Bank) reduces debt. Draw on revolving line of credit increases short-term debt.
• Suppliers: Changes in cultivation capacity and market exits may impact relationships with suppliers in affected regions.

Next Steps

• Complete the exit from the California market, with license transfers awaiting final regulatory approval in Q1 2026.
• Continue to strategically evaluate cultivation and dispensary footprint across Florida.
• Open a new dispensary in Sarasota, Florida, subject to state and county approvals.
• Introduce additional edible products, including sugar-free HaHa soft chews and Dreamland branded chocolates, in Florida.
• Launch additional ONI-branded cannabis products in Florida in 2026.
• Revisit expansion plans for the Beatty, Nevada cultivation facility once the wholesale market in Nevada stabilizes.
• Sell the real estate property obtained from the El Capitan settlement.
• Continue to vigorously pursue rights to reclaim remaining misappropriated funds from El Capitan.
• Monitor the ongoing DEA review for cannabis rescheduling and legislative efforts like the SAFER Banking Act.

Key Dates

Recommendation

The company faces significant financial headwinds, evidenced by an 11.2% decline in net revenue, a substantial 28.9% drop in gross profit, and a 33.7% increase in net loss in 2025. The shift from positive to negative cash flow from operations and a notable decrease in working capital highlight deteriorating liquidity. While strategic exits from underperforming markets and expansion in Florida are positive long-term moves, the immediate financial performance and substantial asset impairment charges indicate ongoing operational challenges and market pressures. The cannabis industry's inherent regulatory risks, including federal illegality and tax burdens under Section 280E, further compound these issues. A seasoned investor would likely view the current financial trajectory as concerning, warranting a "sell" recommendation until there is clear evidence of sustained profitability, improved margins, and a more stable operating environment.

Keywords

Cannabis, Marijuana, Dispensary, Cultivation, Production, Florida, Nevada, California, Illinois, Retail, Wholesale, Superstore, VidaCann, DAZED!, SEC, 10-K, Financials, Earnings, Net Loss, Impairment, Regulation, 280E, Controlled Substances Act, MSO, Multi-State Operator