Earnings call transcript: Planet 13's Q3 2025 revenue drops amid market challenges

Planet 13 Holdings Inc., a cannabis company, reported a decline in revenue for the third quarter of 2025, citing difficulties in key markets such as Nevada and Florida. The company recorded a revenue of $23.3 million, down from $26.6 million in the previous quarter, and faced a significant adjusted EBITDA loss of $4.1 million. Following the earnings announcement, Planet 13's stock price fell by 13.33%, closing at $0.82, with the company's financial performance reflecting broader market challenges.

Key Takeaways

• Revenue decreased to $23.3 million in Q3, impacted by Nevada's tourism downturn and Florida's pricing issues.
• The company is exiting California operations to focus on high-return markets.
• Stock price dropped by 13.33% post-earnings announcement.

Company Performance

Planet 13's performance in Q3 2025 was marked by a notable revenue decline, primarily due to external market pressures in Nevada and Florida. The company has decided to exit the California market, aiming to streamline operations and concentrate on areas with higher return potential. Despite the challenges, Planet 13 is working on enhancing its product offerings and operational efficiency.

Financial Highlights

• Revenue: $23.3 million, down from $26.6 million in the previous quarter.
• Gross Profit: $5 million, with a margin of 21.3%.
• Adjusted Gross Margin: Approximately 45%, excluding one-time items.
• Adjusted EBITDA Loss: $4.1 million.
• Cash Position: $17.2 million.

Market Reaction

Following the earnings announcement, Planet 13's stock experienced a significant decline, dropping 13.33% to $0.82. This movement reflects investor concerns over the company's financial performance and market challenges. The stock's current price is closer to its 52-week low of $0.24, indicating heightened market pessimism.

Outlook & Guidance

Looking ahead, Planet 13 expects improved performance in the fourth quarter, anticipating better margins as a result of exiting the California market. The company projects a monthly cash flow improvement of $300,000 to $350,000 post-divestiture. Additionally, Planet 13 is focusing on optimizing its operations in Nevada and Florida to drive profitability.

Executive Commentary

Bob Grossbeck, Co-CEO of Planet 13, emphasized the company's commitment to sustainable operations, stating, "We're not chasing growth. We're focused on profitable, sustainable operations." He further noted, "Q3 marked a trough. We've made difficult but necessary decisions."

Risks and Challenges

• Market Saturation: The cannabis market in Florida is experiencing pricing compression, affecting revenue.
• Regulatory Changes: Potential hemp derivative market regulation could impact THC operators.
• Operational Restructuring: Exiting underperforming markets like California poses transitional challenges.

Planet 13 is navigating a complex market landscape, with strategic shifts aimed at bolstering its financial health and competitive position. The company's efforts to streamline operations and focus on high-return markets are pivotal as it seeks to rebound in the coming quarters.

Full transcript - Planet 13 Holdings Inc (PLTH) Q3 2025:

Conference Operator: Thank you for standing by. Welcome to the Planet thirteen Q3 twenty twenty five Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you.

I would now like to turn the conference over to Mark Kindersna, Head of Investor Relations. Please go ahead, sir.

Mark Kindersna, Head of Investor Relations, Planet Thirteen Holdings: Thank you. Good afternoon, everyone, and thanks for joining us today. Planet thirteen Holdings third quarter twenty twenty five financial results were released today. The press release, the company's quarterly report 10 Q, including the MD and A and financial statements are available on the SEC's website, EDGAR and SEDAR plus as well as on our website, plan13.com. Before I pass the call over to management, we'd like to remind listeners that portions of today's discussion include forward looking statements.

The forward looking statements in this conference call are made as of the date of this call. There can be no assurances that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize. Risk factors that could affect results are detailed in the company's public filings that are made available with the United States Securities and Exchange Commission and on SEDAR plus We encourage listeners to read those statements in conjunction with today's call. As a result of these risks and uncertainties, the results or events predicting these forward looking statements may differ materially from actual results or events. In addition, we will refer to both GAAP and non GAAP financial measures.

For information regarding our non GAAP financial measures and reconciliations to the most directly comparable GAAP measures, please refer to today's press release posted on our website. Page 13 financial statements are prepared in U. S. Dollars and results discussed during this call are in U. S.

Dollars unless otherwise indicated. On the call today, we have Larry Scheffler, Co Chairman and Co CEO Bob Grossbeck, Co Chairman and Co CEO and Steve McLay, Interim CFO. I'll now pass the call over to Larry Scheffler, Co Chairman and Co CEO. Larry, go ahead.

Larry Scheffler, Co Chairman and Co CEO, Planet Thirteen Holdings: Good afternoon and thank you for joining us. I'll cover our operational performance across the quarter. Steve will detail the financials and Bob will discuss our strategic repositioning, including our decision to exit California and concentrate resources on our highest market returns highest return market, sorry. In Q3, our superstore including days generated $9,800,000 Las Vegas pays significant headwinds. Visit volume was down roughly 10% year over year in the quarter with notable weakness in both tourists and local spending.

As the destination experience historically focused on tourists, we felt these impacts acutely. In a typical quarter, we service approximately 80% tourists and 20% local. In Q3, this was down closer to fifty-fifty as the number of tourists declined. However, our efforts to attract more local traffic are beginning to gain traction and we're seeing signs of a pickup in tourism as well. October revenue increased 5% month over month and early but encouraging sign that repositioning is working.

Our neighborhood store network delivered $11,300,000 in revenue with Florida representing $7,600,000 of that total. Q3 marked the low point for our Florida operations as we work through the final impacts of our previously discussed flower quality issues. We are now seeing tangible improvements. October sales were 8% higher than the average Q3 month as better flower quality drives customer reacquisition. Our VHO lab comes online by year end, completing our product portfolio with a full range of concentrates and extracts that Florida customers expect available in Q1 twenty twenty six.

This should build on the Q4 momentum we're already seeing. Outside our two core markets, Illinois was a bright spot with revenue up 9% sequentially from Q2. Combined, our superstore and neighborhood network generated $21,100,000 in total retail revenue compared to $23,900,000 in Q2. Wholesale revenue was $2,200,000 down from 2,700,000.0 in Q2. This decline reflects two primary factors.

First, we purposely began winding down California operations during the quarter, which resulted in selling through aged inventory at reduced prices. Second, in Nevada, the combination of our wholesale team restructuring that began in late Q2 and softer statewide retail performance impact our ability to negotiate with larger dispensary chains. Q3 was undoubtedly a challenging quarter marked by difficult market conditions and our two largest markets. But we're already seeing signs of stabilization. October showed sequential improvement in both Las Vegas and Florida.

Our VHO label will be operational by year end and our decision to exit California removes a drag on resources and profitability, allowing us to focus capital and attention where we can deliver the strongest returns. We are far from where we want to be, but we are seeing the early indications in October that our strategic adjustments are taking hold. With that, I'll turn it over to Steve to walk through our financials.

Steve McLay, Interim CFO, Planet Thirteen Holdings: Thank you, Larry. In Q3, Planet thirteen delivered $23,300,000 in revenue, down from $26,600,000 in quarter two. As Larry outlined, two factors drove this decline: the outgoing tourists and economic downturn in Nevada impacting our superstore and Florida reaching its low point. Based on October's performance, we're optimistic that we've turned the corner in both markets. Our local customer initiatives in Nevada are gaining traction and improved flower quality in Florida's winning back customers.

Looking ahead, we expect stronger performance from our core states in Q4, even accounting for typical seasonal headwinds. California will remain in our Q4 results with the divestiture expected to close in Q1 twenty twenty six. Gross profit was $5,000,000 with a gross margin of 21.3%. This figure includes significant onetime impacts. As part of the California divestiture, we sold flower below costs to clear inventory and convert it to cash.

This had about a $1,100,000 impact on our gross profit in the quarter. We also recorded a $3,500,000 inventory reserve in Florida related to lower quality flower and distillate accumulated earlier this year. Excluding these items, our gross margin would have been approximately 45%, which reflects our strategic use of promotional pricing in Nevada and Florida to drive customer traffic and rebuild market share. This is consistent with the strategy we outlined last quarter, leveraging our scaled cultivation to compete on price where necessary. We expect meaningful margin improvement in Q4 as we move past these onetime charges and as Florida benefits from higher quality flower and our expanded product portfolio.

Sales and marketing expense decreased 24% sequentially to $1,200,000 as the cost reduction actions we initiated last quarter begin to flow through. G and A declined 14% to $12,000,000 from $14,000,000 in Q2, reflecting our ongoing focus on operational efficiency. We continue taking a disciplined approach to expenses and identifying additional opportunities for savings. Adjusted EBITDA loss was $4,100,000 in Q3, impacted by the gross margin charges I just described, along with lower operating leverage from reduced revenue. We view this quarter as a low point.

Q4 should show meaningful improvement as we eliminate these onetime impacts and benefit from revenue recovery in our core markets. Turning to the balance sheet. As of 09/30/2025, we had $17,200,000 in cash. With our BHL lab construction essentially complete, we don't expect meaningful capital spending for the remainder of the year. Total remaining CapEx is estimated at less than $1,000,000 At quarter end, we had approximately $10,600,000 in short term debt with 9,700,000.0 of that in the form of a revolving credit line at a very favorable interest rate.

Subsequent to quarter end, we sold our Orange County, California store. Now while this transaction doesn't materially impact our near term cash position, it will have a positive impact on our margins in 2026 once the sale closes. With that, I'll turn the call over to Bob to discuss the strategic actions we're taking to return to profitability.

Bob Grossbeck, Co Chairman and Co CEO, Planet Thirteen Holdings: Thank you, Steve, and good afternoon, everyone. We've been transparent all year about the headwinds facing cannabis operations in our Nevada consumers. Rather than wait for conditions to improve, we're taking decisive action to restructure the business around sustainable cash flow generation. That drove our decision to exit California. Despite our market position, the state's combination of unchecked illicit competition, compressed pricing and regulatory burden made it nearly impossible to consistently generate positive cash flow for any but the largest, most skilled operators.

We made this strategic call to divest our retail assets and wind down wholesale operations. Exiting California eliminates a persistent cash drain, improves our consolidated margins and reduces operational complexity. Most importantly, it frees our team up to focus capital assets and attention on the assets with the clearest path to profitability. We expect to have completed winding down operations and closing the sale of the dispensary in Q1 twenty twenty six, as Steve mentioned. Chief among those opportunities, we want to redirect focus to Florida.

We're in the final stages of completing the BHO extraction lab, the last major infrastructure investment needed to unlock the full productivity potential of our Florida operations and drive meaningful top line and margin expansion. Our cultivation upgrades have delivered substantial improvements in both yield and potency. We've enhanced post harvest processing and packaging to increase throughput while lowering unit costs. We leaned into pricing to attract customers and reintroduce them to our much higher quality, more potent flower. As Larry touched on, in October, we've been able to increase prices while retaining customers, leading to increased revenue and a testament to the improving quality that we're finally starting to benefit from.

While we made significant changes to our approach to leverage pricing to attract customers, we haven't changed what is core to us. Our customer and entertainment experience has been a bright spot for us in the quarter. Dave's is a perfect example, which had a record quarter in Q3. We've got some exciting stuff lined up for Q4 and next year, and we're excited to continue building on this. Q3 marked a trough.

We've made difficult but necessary decisions, exiting California, restructuring our cost base and completing critical infrastructure in Florida. October sequential improvements in both Nevada and Florida are encouraging early signals, but we're clear eyed about the road ahead. There's still significant work to do. Our mandate remains unchanged, operate with discipline, protect cash flow and build a more resilient, higher margin business. We're not chasing growth.

We're focused on profitable, sustainable operations. Every decision is grounded in capital efficiency and durable returns. The transformation is underway but far from complete. We're rationalizing underperforming assets, driving cultivation productivity, tightening costs and sharpening retail execution. These are structural changes, not quick fixes.

They won't deliver overnight results, but they're already positioning us for materially improved performance. And with that, I want to thank everybody for participating today. And I'll now turn the call over to the operator and open the line for questions from covering analysts. Thank you.

Conference Operator: Thank you. And we will now begin the question and answer If have dialed in and would like to ask a question, please press star followed by the number one on your telephone keypad to raise your hand and join the queue. If you would like to inquire your question, simply press star one again. You. And your first question comes from the line of Kenric Tide with Canaccord Genuity.

Please go ahead.

Kenric Tide, Analyst, Canaccord Genuity: Thank you, and good evening. Just with respect to the timing on the, the VHO lab, I think expectations initially were to come online sometime this month. Could you provide some insight there? Is it simply a regulatory delay or something else on the delay? And second to that, just in terms of the cadence and ramp into the New Year, how should we think about your product suite and the timing of you having a full suite in Florida in 2026?

Bob Grossbeck, Co Chairman and Co CEO, Planet Thirteen Holdings: Kenner, it's Bob. I'll attempt to address that. We're not far off a track. I mean, projections originally were to have the facility completed in November. So we're on target for that.

Pablo Zuanic, Analyst, Zuanic and Associates: The issue of

Bob Grossbeck, Co Chairman and Co CEO, Planet Thirteen Holdings: quarter versus regulatory

Pablo Zuanic, Analyst, Zuanic and Associates: approvals. So,

Bob Grossbeck, Co Chairman and Co CEO, Planet Thirteen Holdings: you know, we unfortunately can't account for that, you know, we build a timeline, we anticipate dates for approvals. We just realistically, we won't get there in November, that's not going to happen. Is, you know, when do we ex expect to see We anticipate that'll be in but in in on the February 1. So

Kenric Tide, Analyst, Canaccord Genuity: Thanks for that. So my third one on Florida, the size of the inventory reserve sort of relative to revenue you're generating there. I mean, this product that is literally just aging out of the reads and press release? Or it's something else that the provision you've taken there, dollars 3,500,000.0?

Pablo Zuanic, Analyst, Zuanic and Associates: Steve, I'll let you address that.

Steve McLay, Interim CFO, Planet Thirteen Holdings: Sure. And some of this issue is kind of a carryforward from right from the acquisition date as we took on a lot of sort of excess concentrates and flower at that time, and we've been working through it. And then with the sales decline that we experienced in Q3 and some of the plans we had to move, some of that excess concentrate have been a lot slower than we anticipated. So we gathered it was time to kind of take those adjustments now. And the the amount of a lot of it is excess trim just that's accumulated.

And from a space standpoint, bringing in the lab and having to make a a choice on what what's the best use of of resources. We're gonna we're gonna end up, you know, moving out a lot of that trim that really just doesn't have any value anymore to us. So that's really what what that that that is. Once once that adjustment's made, we should be in a good place.

Kenric Tide, Analyst, Canaccord Genuity: Appreciate it. And a quick final one, I could, just switching to Nevada. If we look at that, how much more is there that you believe you can do? I think you called out in your prepared remarks some exciting initiatives. But how much more realistically can you do on the ground before you just need to ride out this tourism storm and hope it turns?

What levers are there that you can still pull? And do you think you're at the point where you're as optimized as you can be and from here on in, it's just try and ride the storm?

Larry Scheffler, Co Chairman and Co CEO, Planet Thirteen Holdings: This is Larry. I've got a little bit. We've got a lot we can pull. What we've done here in the last two months, we've assembled a team where we're getting different events. We've got a plaza back there about 4,000 feet on the new plaza we did.

And we started this, I guess in October and we had sold your boy here which drew two twenty people. We had a pregame show within our bar that drew 300 people. All of that gave us a tremendous uptick for about two weeks straight. We then had a little issue with the clarification on whether or not our liquor license was renewed or wasn't renewed. To play it safe, we held off on that and had to go through about a thirty day process to get our liquor license back and our theatrical license for the bars in back also.

So we kind of got a delay for thirty days, but we've got a big plan on creating events, not just for Planet thirteen, but drawing the tours here for different smaller concerts, pregame shows for like I said already with the Raiders. People are loving that and really coming to the location to do it. Again, two weeks straight of doing it in October and it was just very, very successful. So we've got all that starting up now. About a week ago, we finally got all of our liquor licenses in place and we're looking forward to it even a great November and a lot of events, two or three events going on in December yet and increasing even more next quarter.

So it's going to be a different game for us completely with all of that.

Bob Grossbeck, Co Chairman and Co CEO, Planet Thirteen Holdings: Great. Thank you. I'll get back in queue.

Conference Operator: Thank you. And the next question comes from Pablo Zuanic with Zuanic and Associates. Please go ahead.

Pablo Zuanic, Analyst, Zuanic and Associates: Thank you. I guess, Larry, let me let me follow-up on that. So you you said that, typically, for the superstores, 80% purees, 20% locals. So in the second quarter, you did 12,000,000. Right?

That means 2.4 local in terms of sales. And then $50.50 in the third quarter, that's 4,900,000.0. Sorry to be so precise on the numbers. But, you know, roughly, it seems that your sales to locals in the third quarter doubled, right, which is great. And from what you were saying, the the the activation even began more aggressively in October.

Right? So so so the outlook with the I'm right in terms of the math, your sales to locals doubled in the third quarter. In the fourth quarter, you seem to have even more momentum with locals. Or are my

Larry Scheffler, Co Chairman and Co CEO, Planet Thirteen Holdings: Right. Numbers We a great success in October for two weeks until we had this liquor license No, I'm

Pablo Zuanic, Analyst, Zuanic and Associates: not talking I'm sorry to interrupt, Valeria. I'm sorry to interrupt, but I'm talking about the third quarter. The third quarter, based on the numbers you gave us, right, $80.20 in the second quarter, $50.50 in the third quarter in terms of tourists and locals, that means that your sales to locals in the superstores in the third quarter double. So you probably had a little activation already in the third quarter in place.

Larry Scheffler, Co Chairman and Co CEO, Planet Thirteen Holdings: Well, it doubled. So you're wondering why the revenue didn't go up. Is that your question?

Pablo Zuanic, Analyst, Zuanic and Associates: No. No. No. I'm just saying that your sales to locals, it seems that from the numbers you gave us, your sales to locals in the superstore in the third quarter doubled, right, which which is very good. So a lot of your activation already began in July, August, and September.

So I'm just trying to understand what's different in October, November versus the third quarter. It seems that you have even more activation or the activation already began in July and August for the SuperStore in terms of activities aimed to locals.

Larry Scheffler, Co Chairman and Co CEO, Planet Thirteen Holdings: I guess I'm not following the line of questioning. I'm sorry.

Pablo Zuanic, Analyst, Zuanic and Associates: All right. Maybe I'll just follow-up offline. No. Okay. I'm I'm just saying that you guys said that the superstore sales in the I'll move on.

But superstore sales in the in the second quarter were 12,000,000, and 80% was tourist, 20% was local sales. Right? And the third quarter was 9,800,000.0, and that was 50% tourist, 50% locals. So it means that the sales to locals from the superstore doubled. Right?

But don't worry. I mean, I'll move on. So I'm just saying, it it seems that the activation you had in the third quarter really were great. And now you seem to have even more activation in the fourth quarter. Yeah.

Pablo, I'll I'll jump in maybe just real quick.

Mark Kindersna, Head of Investor Relations, Planet Thirteen Holdings: Yep. When you think about the change kind of Q2 to Q3 and the increase in locals, part of that was driven by pricing more than and more local focused events. What Larry is talking about in Q3 is also bringing or in Q4 in October is also bringing back more of the tourist focused events.

Larry Scheffler, Co Chairman and Co CEO, Planet Thirteen Holdings: I think Right. Locals, we get 50% off for locals. So even though it doubled, we didn't get that much more revenue with the locals even though we're double the activation, how many people came in. Our biggest thing is getting the tourists back. Now I would say during the two weeks in October, we hit again 80% tourists and 20% locals.

Once we had the bars and the events soldier boy, pregame, again that fell off. I think in fourth quarter or the balance of fourth quarter, we're going be back at 80% tourists and 20% locals again is what we're going to have. The big money is when we get the tourists in here at full price. The locals are good, but we give a 50% discount to match all the rest of our competitors that give you discounts other than what we charge at Planet thirteen because of the tourist destination.

Pablo Zuanic, Analyst, Zuanic and Associates: Right. Got it. Okay. Thank you. And then just one for Steve.

Can you try to quantify the cash flow benefit going forward from the California exit?

Larry Scheffler, Co Chairman and Co CEO, Planet Thirteen Holdings: Sure.

Steve McLay, Interim CFO, Planet Thirteen Holdings: And this kinda starts at the beginning of next year. We're waiting again to to to to get approval on this the license transfer to complete the sale of the the California store. But once this once once it's all complete, we're expecting approximately 300 to 350,000 a month of of cash flow upside and profitability upside. And there are periods and given the trajectory of that market and the pricing that we were experiencing and seeing, I think there would have been more had we continued that the losses in that market would have been even more than that. So we're kind of heading that off in advance.

But there are some months where we would have experienced an even larger impact. But on average, we're thinking 3 to $3.50 a month.

Pablo Zuanic, Analyst, Zuanic and Associates: All right. Thank you. And a related question in terms of what you can disclose publicly. Is it the Illinois operation? I know it's still in a ramp up mode, but is that is that a cash drain, or is it neutral neutral to cash flow right now, Illinois?

Steve McLay, Interim CFO, Planet Thirteen Holdings: Illinois is cash positive.

Pablo Zuanic, Analyst, Zuanic and Associates: It's cash positive. Okay. That's great. Thank you. And and one last one, Bob.

I mean, you know, some people are getting very excited with this potential hemp ban that may be signed today. You know, you've discussed these at length in prior calls. Know, some people quantify the the hemp derivatives industry close to 20,000,000,000. Right? So so it could be a big uptick for the cannabis industry, but but there are and particularly in the case of Florida, but any thoughts in terms of whether those numbers begin to accrue, whether in terms of pricing or in terms of revenues for operators like yourself on the cannabis side?

Bob Grossbeck, Co Chairman and Co CEO, Planet Thirteen Holdings: Yes. So that's an excellent question. Mean, obviously, we'll see what happens in the vote here today, any of that's stripped out on the House. But look, as a THC operator, I'm encouraged by that because intoxicating hemp, as we've discussed many times, as you mentioned, has had a dramatic negative impact on the regulated industry. And with respect to what the uptick is in Florida, for instance, I don't know what that is.

But I know it's going I anticipate it will be significant because we've been crushed in Florida. Just about every other storefront down there has intoxicating hemp sold at retail. And it's incredibly hard to compete against that, and especially with the regulatory burdens we deal with every day. So look, I'm guardedly optimistic. I never count anything until it happens.

And this is politics. But Pablo, as I've said to you in the past and to your listeners, I don't mind competition. I just want it to be fair competition. And if they want to be in the space, they should play by the same rules that we do and be accountable like we are. So I'm going to keep my fingers crossed here till I have a chance to see what happens on the vote today.

The President has indicated he's going to sign it, whatever it is. So and I think he messaged briefly today that he thought that some hemp performance is probably necessary, so or he could support it rather. So let's see what happens. Fingers crossed.

Pablo Zuanic, Analyst, Zuanic and Associates: Yes. No, that's good. Thank you, Luke. Let me add one more, if you don't mind. I know in the past, I know you've been very disciplined in terms of cash allocation.

But in the past, you've talked about potentially acquiring dispensaries in Nevada to allocate, you know, more production internally to capture more margin. But, you know, after divesting California, it seems that you don't have a lot of wholesale revenue, right, to third parties. So you don't have a lot of product to be selling to third parties. So I'm wondering I'm wondering whether there's a need to be buying Nevada dispensaries if you don't have a lot of additional product to sell to third parties right now.

Bob Grossbeck, Co Chairman and Co CEO, Planet Thirteen Holdings: Well, in Nevada, we've got plenty of capacity that we're actually dealing with that now trying to figure out we're going to better try to balance the supply demand in the wholesale market. Again, it's a challenging market. But to the first part of your question, are we looking to actively purchase dispensaries? We're not now. We're kind of pivoting.

We're trying to just get more efficient internally in how we operate. And we'll see how the market shakes out here in the mid-twenty twenty six, and then we can revisit that.

Pablo Zuanic, Analyst, Zuanic and Associates: And

Conference Operator: the next question comes from Brenna Connington with ATB Capital Markets.

Brenna Connington, Analyst, ATB Capital Markets: Hey, this is Brenna on for Rodrigo. Thanks for taking our questions. So just looking at the pending divestiture from California, what type of financial improvements could we expect to see once that's been divested?

Pablo Zuanic, Analyst, Zuanic and Associates: Yes. Steve, why don't you jump in here?

Steve McLay, Interim CFO, Planet Thirteen Holdings: Yeah. I think we kind of talked a little bit about that. But what we're looking at is about, know, let's call it 350,000 approximately of sort of profitability enhancements given that the one facility is a cultivation facility, and we were near the end having to sell a lot of the product basically at cost or below. This will have a big impact on our margins going forward. So we're going to see a margin improvement and basically a profitability improvement of about three to three 50 a month.

Brenna Connington, Analyst, ATB Capital Markets: Okay. That's helpful. And then just looking at Florida. From a pricing standpoint, what are you seeing there?

Bob Grossbeck, Co Chairman and Co CEO, Planet Thirteen Holdings: Well, it's still a very challenging market right now, a lot of compression. So we've had to get very creative on how we promote products for our customers and how we price to be competitive. So I anticipate there will be continued price compression in the near term. And again, I think for us, we're fortunate with the improvements to our cultivation facility. We've seen much, much better products coming out consistently.

So it makes us more competitive in the flower market. But we're particularly excited, as we mentioned, about VHO coming online. It gives us an entirely new product category to go into. And so we're excited, and we know there's a lot of upside in that segment.

Brenna Connington, Analyst, ATB Capital Markets: Okay, perfect. And then last one for us is just are there any more plans to open any new stores in Florida or potentially closing stores in Florida?

Bob Grossbeck, Co Chairman and Co CEO, Planet Thirteen Holdings: Well, we're continually analyzing the store performance individually, and we're going to continue to monitor that. My guess is, right now, we've got a couple of openings scheduled here, but we've taken a much slower, deliberate path there going forward. We're just and again, our our focus to get profitable. And, you know, then we'll take a look at adding additional stores. That's probably going to be the latter part of 2026.

We've got some opportunities or locations in our inventory now. We're just again, we're not prepared to put the CapEx out there now to get these stores built out. We're in good shape with what we have, and we just need to make those stores profitable.

Brenna Connington, Analyst, ATB Capital Markets: Understood. Thank you so much. I'll jump back in the queue.

Bob Grossbeck, Co Chairman and Co CEO, Planet Thirteen Holdings: Thank you.

Conference Operator: Thank you. And this does conclude our question and answer session. I'd like to thank our speakers for today's presentation, and we thank you all for joining us. This now concludes today's conference call. You may now disconnect.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.