Planet 13 Revenue Drops 14% in Q2

Planet 13 (PLNH), a cannabis retail and production company with a focus on large destination retail stores and branded products, reported its Q2 2025 GAAP results on Aug. 13, 2025. The most notable headline from the earnings release was a drop in GAAP revenue to $26.9 million for Q2 2025, below the consensus GAAP estimate of $27.25 million for Q2 2025, and a much wider net loss of $13.3 million (GAAP) for Q2 2025. Both GAAP figures for Q2 2025 missed Wall Street’s expectations, with management citing market price compression, weaker consumer demand, and higher competition in key markets. Margin contraction and deepening losses dominated Q2 2025 (GAAP), as the company’s efforts to cut costs have yet to outpace the slide in sales during Q2 2025 (GAAP). Overall, results reflected continued pressure on profitability and raised questions about the timing and effectiveness of recent restructuring.

Source: Planet 13. Note: Analyst estimates for the quarter provided by FactSet.

About Planet 13 and Its Strategic Focus

Planet 13 operates large-scale cannabis stores, with its flagship “Superstore” location in Las Vegas catering mainly to tourists, as well as neighborhood dispensaries in several states. The business is vertically integrated, handling everything from cannabis cultivation to branded product manufacturing and retail sales.

Planet 13’s growth strategy centers on expanding its retail network, especially in Florida—a large medical-use market with potential for future adult-use sales. Key factors for success include its multi-state license portfolio, strong in-house cannabis brands, and the ability to navigate a complex regulatory environment. Vertical integration and brand strength are critical levers as Planet 13 looks to defend margins and deepen customer loyalty amid harsh market conditions.

Quarter in Review: Financial and Operational Developments

The most striking figure from the period was the 13.6% slide in GAAP revenue in Q2 2025 from the prior year, This decline was driven by lower prices in Nevada and increased competition in Florida. Company commentary attributed these headwinds to intense competition and increased presence of illicit and alternative market options, particularly in Nevada. Management said, “price compression” was felt industry-wide.

Gross profit (GAAP) dropped 26.4% year over year in Q2 2025, while gross margin (GAAP) fell from 50.9% to 43.4% compared to the prior year. This steep margin decline in gross profit percentage reflects industry-wide pricing pressure. Despite efforts to cut expenses, total spending was $18.5 million (GAAP)—a 4.6% reduction in total expenses (GAAP), but not enough to offset the fall in sales.

Adjusted EBITDA, which measures earnings before interest, taxes, depreciation, amortization, and special items, flipped from a $3.2 million profit in the prior year to a $2.4 million loss. Management pointed to severance and restructuring costs, plus lower operating leverage, as the main drivers for this reversal. Net loss (GAAP) widened sharply to $13.3 million, up 64.8% from the prior-year period. Cash usage also accelerated, with cash holdings declining from $23.4 million as of Dec. 31, 2024, to $15.9 million (GAAP) as of June 30, 2025.

Operationally, the company opened two new dispensaries in Florida (Orange Park and Edgewater), growing its footprint in a highly regulated, medical-only cannabis market. Its Las Vegas Superstore continued to focus on tourist traffic—about 80% of visitors—supported by aggressive pricing strategies. Planet 13 rolled out a revamped loyalty program in July 2025. The company is also expanding its proprietary brands, such as HaHa edibles and Dreamland chocolates, into Florida as regulatory approvals are secured. No significant new store launches or strategies were reported for California and Illinois, with those market positions under review for profitability.

A one-time event in the period was the transition of the chief financial officer role, as Dennis Logan resigned and Steve McLean became interim CFO in May.

Products, Branding, and Retail Initiatives

Planet 13’s proprietary product lineup includes HaHa cannabis gummies and beverages, Dreamland cannabis-infused chocolates, TRENDI vape cartridges and concentrates, and Medizin dried flower and extracts. These brands help differentiate the company at the retail level and target broad consumer preferences. Expanded cultivation and processing upgrades in Florida improved flower quality and yields, supporting the local rollout of these branded products. In the quarter, the company cited that new grow houses brought in more potent and higher-yield crops, intended to reduce stock-outs and lower the need for discounting on its medical dispensary shelves.

The company launched a revamped loyalty program in July 2025. Planet 13 also tried new marketing tactics, such as social media campaigns and event partnerships, taking aim at tourist segments and local shoppers alike. In Nevada, price competition remains the primary tactic against alternative retail and illicit suppliers, with management noting the sharp impact of price pressure on margins for even the most vertically integrated operators.

Vertical integration—controlling everything from seed to sale—remains core to Planet 13’s strategy. However, declining gross margin (GAAP) shows the limits of this model when scale and market pricing power are challenged. The company’s business in Illinois and California is currently under review, with management stating it is not “married” to underperforming assets and will focus investment and operating effort primarily on Florida and Nevada. These moves, together with ongoing restructuring, are meant to safeguard liquidity and refocus investment where growth and profitability are more attainable.

In Florida, regulatory hurdles have slowed the introduction of new branded product types, particularly for non-flower forms like vapes or concentrates. Company leaders said this will limit short-term growth in average store sales until licenses and approvals are in hand. Nonetheless, improving yields and a growing in-house product mix are expected to support both store traffic and inventory efficiency in the quarters to come.

Looking Ahead: Guidance and Investor Watchpoints

Planet 13 management did not provide explicit revenue, profit, or cash flow guidance for the next quarter or fiscal year in the earnings release. The company did reiterate its intent to “improved financial performance over time,” but offered no clear timetable or target metrics. Previously, management stated it was targeting positive operating cash flow as soon as the second or third quarter of 2025, but actual results remained negative.

Absent official forward guidance, investors will likely focus on the pace and effect of ongoing cost-cutting efforts, stabilization in gross margins, and further store or product launches in core states. Capital management will also be in focus, given the notable cash burn and rising liabilities, especially increased “uncertain tax positions” (GAAP). One-time restructuring and leadership changes, such as the CFO transition, add to uncertainty for the near-term outlook. PLNH does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.