Planet 13 Holdings, Inc. Q1 FY2026 earnings call

Strategic Transition & Cost Restructuring

• Q1 2026 was a transition quarter for Planet 13, reflecting costs of the multi-quarter strategic repositioning to improve cash flow, with early benefits already visible in April 2026 results.
• Completed exit from California operations and consolidation of the Wagon Trail cultivation footprint in Nevada, eliminating persistent fixed cost drag and overhead.
• G&A expense declined 6.7% sequentially ($800,000) to $11.2 million, and is down nearly $3 million year-over-year, with ongoing efficiency initiatives targeted for the rest of 2026.

Market & Competitive Dynamics

• Las Vegas tourism showed early signs of stabilization in Q1, with modest year-over-year visitor growth in March 2026, though overall volume remains ~7% below 2024 levels.
• Clark County passed a stricter ordinance for intoxicating hemp products effective mid-July 2026, paired with federal hemp restrictions taking effect November 2026, to address the competitive imbalance created by unlicensed illicit hemp operators in Las Vegas.
• Pricing in Florida has stabilized amid increased peer store expansion and capacity growth, but overall market growth remains muted.

Regulatory Developments

• In late April 2026, federal regulators rescheduled state-licensed medical marijuana from Schedule I to Schedule III of the Controlled Substances Act, which directly applies to Planet 13's Florida operations (40% of Q1 revenue).
• The rescheduling removes the punitive 280E federal tax provision from Florida operations on a go-forward basis, a material long-term benefit. An expedited standard rulemaking proceeding to move all cannabis to Schedule III is scheduled to conclude by mid-July 2026, which would benefit the company's Nevada and Illinois operations if finalized.

Operational Milestones

• The VHO concentrate lab in Florida completed final state inspections and received partial approval, with full approval expected in the near term. Revenue from the lab will begin in Q2 2026, expanding the company's higher-margin product mix in its largest market.
• April 2026 retail performance was in line with the company's internal Q2 operating plan, with sequential improvements across all three neighborhood markets (Florida, Illinois, Nevada).

1. Superstore (including Dazed): Generated $9.3 million in revenue in Q1 2026, which was marginally up from Q4 2025. Dazed alone grew revenue 47% year-over-year. This segment contributed 44.1% of total Q1 revenue. 2. Neighborhood Store Network: Generated $10.9 million in revenue in Q1 2026, with $8 million coming from the Florida sub-segment (37.9% of total Q1 revenue). After adjusting for the one-time Florida loyalty accrual benefit from Q4 2025 and the California exit, underlying sequential revenue was flat. This segment contributed 51.7% of total Q1 revenue. 3. Wholesale: Generated $0.9 million in revenue in Q1 2026, down from $2 million in Q4 2025 entirely due to the California wholesale exit. Exiting California, Nevada wholesale revenue grew 41% sequentially in Q1 2026, marking the third consecutive quarter of sequential growth. This segment contributed 4.3% of total Q1 revenue. Total company revenue across all segments was $21.1 million in Q1 2026.

• Management expects Q2 2026 to be the first quarter that reflects performance of the repositioned portfolio without transition costs from the California exit and other restructuring activities.
• Gross margin is expected to receive material tailwinds in 2026 from the elimination of California-related margin dilution, the Wagon Trail consolidation, and the addition of higher-margin concentrate products from the new Florida VHO lab.
• Management expects the cash position to improve throughout 2026 as operational improvements translate to stronger cash generation, with minimal capital expenditures planned for the remainder of the year.
• Operational benefits from stricter hemp regulations in Clark County are expected to emerge in the second half of 2026 as enforcement goes into effect.
• The 2026 outlook does not rely on a recovery in Las Vegas tourism, and is built on the current operating model with a cleaner cost structure and normalized gross margins.

• Overall Las Vegas tourism volume remains approximately 7% below 2024 levels, and visitor spending continues to reflect a softer macroeconomic baseline.
• Unlicensed intoxicating hemp operators and ongoing illicit market activity in Las Vegas have created a structural competitive imbalance for licensed cannabis operators, with benefits from new regulations not expected until the second half of 2026.
• Clarity on the tax implications of federal rescheduling, including retrospective relief for uncertain tax positions, depends on future Treasury and IRS guidance, with full details not expected until the Q2 2026 earnings call.
• The broader macroeconomic environment remains weak, with continued pressure on cannabis pricing across core markets.
• The outcome and timeline for full rescheduling of all cannabis to Schedule III via the standard rulemaking process is uncertain, and there is no guarantee it will be finalized as expected.

Q: Have early benefits from upcoming hemp restrictions already appeared, with retailers starting to pull intoxicating hemp products from shelves in Nevada or Florida? / A: Management has only heard tangential reports of reduced hemp orders in Florida, and has not seen any material impact on retail numbers in either market to date. They expect significant improvements to the competitive landscape as the July effective date for Clark County's ordinance approaches, as unlicensed hemp operations close. (190 characters)

Q: With increased peer store expansion and capacity in Florida alongside stable but low growth pricing, will Planet 13 revise its store expansion plans to add more locations in 2026? / A: The company is holding expansion plans steady at the current 38 stores in Florida for the near term. It prioritizes cash conservation to strengthen its balance sheet, and will only revisit expansion if it sees clear, sustained improvements in customer traffic and market growth. (201 characters)

Q: What was the one-time Q4 2025 Florida loyalty accrual benefit, and will this type of non-recurring gain happen again in future quarters? / A: The roughly $2 million one-time gain came from relieving an accumulated loyalty program liability carried over from the 202X Vitacan acquisition purchase accounting when the program was modified at the end of 2025. This is a one-time item that will not recur in 2026. (212 characters)