A recent equity research report by Pablo Zuanic from Zuanic & Associates highlights the significant potential of Planet 13 Holdings (OTC:PLNH) in the Florida market following the company's acquisition of VidaCann.

The report underscores Planet 13's strategy for growth in the Sunshine State, particularly in anticipation of possible recreational cannabis legalization by mid-2026. "PLNH is up 26% in the last 30 days as investors begin to appreciate the stock's FL upside. We see room for the stock to continue to outperform," Zuanic wrote. Florida's cannabis legalization initiative known as Amendment 3 will appear on the November 2024 ballot.

Florida Market Expansion

The acquisition of VidaCann, completed for $63.4 million on May 10, 2024, has positioned Planet 13 to expand its footprint in Florida. The company plans to open six additional stores by the end of 2024, with three already set to open soon, including one in Ocala.

According to Zuanic, the rebranding of all VidaCann stores under the Planet 13 banner and the introduction of new product assortments, such as HaHa edibles, are central to this expansion strategy.

Operational Metrics And Growth Projections

In the second quarter of 2024, VidaCann stores sold an average of 1.86K ounces of flowers per store, reflecting a 120% year-over-year increase.

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However, these figures are still below the state average of 2.34K ounces. Similarly, extract volumes per store grew by over 30% year-over-year to 3.26 million milligrams, though this also lags behind the state average of 7.06 million milligrams.

Zuanic estimates that by year-end, the 32 Florida stores could generate a combined annualized revenue of over $70 million, assuming the current 25% gap in performance relative to the state average is closed.

Financial Outlook And Market Valuation

Zuanic's report notes that Florida could become a significant driver of both top-line and bottom-line growth for Planet 13.

The company's gross margins in Florida stand at approximately 50%, with expectations of improvement through increased operational efficiencies.

The report suggests that if Florida transitions to recreational sales by July 2026, Planet 13 could reach an annual sales run rate of $225 million by the end of 2026.

This projection, based on a 20% EBITDA margin and a 10x EBITDA multiple, could result in an enterprise value of $450 million, translating to a potential share price of $1.30, more than doubling the current level.

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