5 Reasons Planet 13 is a Top Cannabis Penny Stock Pick for 2020
Our analysts are excited about the cannabis penny stock investment opportunity. We’ve rated it as one of the best cannabis penny stock picks for 2020 and here are 5 reasons Planet 13 is our top cannabis penny stock pick for 2020.
Identifying which cannabis penny stocks to invest in can be quite challenging given the current market conditions. As once-popular cannabis companies continue to face unrelenting pressure, like Tilray, Inc. (NASDAQ: TLRY) and Aurora Cannabis Inc. (NYSE: ACB), other cannabis stocks that once fell by the wayside now offer great value and opportunity for investment portfolio growth.
The financials, production, and progression of Planet 13’s (OTCMKTS: PLNHF) cannabis superstore have been reviewed by our analysts and they have determined it is the best cannabis penny stock pick for 2020 out of all the available cannabis investing opportunities.
Featured Cannabis Penny Stock Pick for 2020: Planet 13
Planet 13 Holdings, Inc. is a cannabis company based in Nevada, United States. On Nov 1, 2018, the company opened its cannabis dispensary in Las Vegas which became the largest cannabis dispensary in the world at 112,000 square feet. Planet 13 and its prominent position with the world’s largest cannabis dispensary and entertainment complex in Las Vegas, Nevada is a factor that can’t be overlooked when determining a cannabis stock investment opportunity.
First, let’s address what makes Planet 13 (OTCMKTS: PLNHF) a different beast in the cannabis industry. The company has a never-been-done-before cannabis superstore and entertainment complex in Las Vegas, Nevada. The Planet 13 superstore in Las Vegas is the world’s largest cannabis dispensary and entertainment location. This is one of the reasons that our analysts believe that Planet 13 is a strong buy, but the recommendation is not just based on its tantalizing tourist trap location. Not only does the company have the world’s largest cannabis superstore, but it also has the financial fundamentals and production level to boot.
Why do we like Planet 13 as a top cannabis pick for 2020?
- Solid Financial Improvements: The company has done a wonderful job of expansion and increased its revenues and gross margins dramatically from 2017 to 2018. The company increased revenue in 2018 by 136% to 21.2 million and increased gross margin to $10.9 million, which represents a similar increase of 134%. Rival cannabis companies have not been able to capture a growth this significant and in the early infancy of the cannabis market.
- Significant Debt Reduction: Planet 13 is no stranger to debt, as most cannabis companies are, however, the company was able to reduce its debt significantly. In 2018, the company had $4.25 million in debt and was able to reduce it to just $884,000 by March of 2019. The cash on hand for Planet 13 is a staggering $20.2 million, which makes its net cash a whopping $19.3 million. As other cannabis companies struggle to eliminate debt and generate enough revenues from sales to increase their cash balance, Planet 13 has been able to do both to an incredible degree.
- New Automated Facility: A new automated facility was opened by Planet 13 and it plans to eliminate labor costs through the introduction of robotics. The company’s plan to highly automate the production of cannabis at its Las Vegas facility will drive down costs and increase the rate of production. It is reported by the company that the facility is able to produce 600lbs of plant biomass every single day. This facility will serve Planet 13 as a perfect hub to feed its superstore with high-quality cannabis.
- Strategic Partnerships: Planet 13 entered into several strategic partnerships for cannabis concentrates, cartridges, and tinctures for its Las Vegas superstore. On top of all the supply agreements for cannabis products, the company recently locked down a popular brand of celebrity-owned cannabis only a few days ago. Mike Tyson’s “Undisputed 87” is now a brand of cannabis that is sold with exclusivity at the Planet 13 superstore in Las Vegas.
- Record Revenue Indicator: The company was able to capture a dramatic increase in revenue when compared to the months prior and achieved a new record of revenue for the month of January. It is explained by the company that this increase to revenue is an indicator or proof that its efforts to add to its superstore are successful. Planet 13 initiated a Phase II to the superstore that included the addition of a restaurant, event center, and a production facility that can be viewed by consumers. The month of January was also the second month in a row where the company was able to get an average $100 ticket purchase.
Why do we recommend Planet 13 as a strong cannabis stock for 2020?
The fact that Planet 13 has successfully combined cannabis products, information, and culture with entertainment at its superstore is one reason. However, as stated earlier, it is not the only reason that the company is recommended as a strong cannabis stock for 2020. Planet 13 has improved its financials with increases to revenues and gross margins, significantly reduced its debt, and entered into a strategic partnership for the exclusive sale of Mike Tyson’s “Undisputed 87” cannabis brand.
For these reasons, we believe that an investment made into Planet 13 that is at or about the current price of $1.56 is a good cannabis stock investment opportunity for 2020. The company has a cannabis superstore and entertainment complex that won’t quit bringing in tourist revenues anytime soon and it is on its way to further cost reduction with its new automated facility.
5 Reasons Planet 13 is a Top Cannabis Penny Stock Pick for 2020
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