Planet 13 Holdings Inc. PLNHF PLTH is planning to acquire VidaCann, a company that operates 26 dispensaries and has the ninth-largest retail network in Florida.
While the anticipated catalyst for further market growth is recreational legalization, Florida’s medical marijuana market is already substantial, with sales exceeding $1.4 billion. The market has experienced strong volume growth of over 30% and stable prices after a period of deflation.
According to the latest report by Zuanic & Associates (Z&A), the recent increase in stock prices driven by the HHS rescheduling news indicates an upcoming wave of consolidation in the cannabis market.
Pablo Zuanic, in his latest report, stated, “With stock prices up […], we would expect more consolidation. Planet 13 announced plans to buy VidaCann (the 9th largest retail network in the state, with 26 stores[…]). In terms of a retail network with around 20 stores, the only independent operators would now be Cansortium (33 stores) and Green Dragon (33).”
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Planet 13’s Strategic Acquisition of VidaCann
“We anticipate more Florida market consolidation, pending recreational legalization uncertainties. The state Supreme Court has until April to weigh in on the ballot proposal. If no response, the ballot proceeds. Success depends on voters reaching a 60% threshold; the industry is likely to invest heavily for a ‘yes’ vote. Recent stock value increases suggest sellers may move quickly before April,” Zuanic noted.
This transaction is expected to close by January 2024, making Planet 13 a significant player in Florida’s cannabis market.
The deal involves issuing 78.5 million shares along with $9 million in cash and promissory notes, valuing VidaCann at approximately $49 million.
The acquisition includes a fully operational greenhouse cultivation facility and an advanced processing and analytical lab, which will support a significant expansion of the combined dispensary network. VidaCann’s brand portfolio, including well-regarded names like Tikun Olam and Stanley Brothers, complements Planet 13’s existing offerings.
Furthermore, VidaCann’s experienced management team will continue to oversee Florida operations post-acquisition.
Planet 13 plans to divest a 20-acre piece of land and a paper license, making it an attractive opportunity for potential entrants into the Florida market.
- According to official data, as of September 8, 2023, VidaCann had a total of 26 operational stores, with the latest one opened in late September 2022. For context, this marks an increase from their store count of 24 at the close of 2021 and 18 after 2020.
- In the second quarter of 2023, VidaCann held a 1.6% volume share in both the flower and non-flower categories.
- Over 13 weeks ending on September 8, flower volumes saw a significant year-on-year increase of 44%, while non-flower volumes rose by 16%.
- Specifically, flower volumes experienced a 74% year-on-year increase in the second quarter and a 43% increase in the first quarter.
- In contrast, non-flower volumes showed a 6% increase in the second quarter and a 9% decrease in the first quarter.
- VidaCann’s sales per store amounted to $0.85 million in the flower category, compared to an average of $1.83 million (excluding Trulieve TCNNF) or $2.43 million (including Trulieve).
- For non-flower, sales per store reached $2.48 million, as opposed to an average of $5.57 million (excluding Trulieve) or $7.18 million (including Trulieve).
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