Planet 13 recovers some ‘embezzled money’ as 2023 marijuana revenue falls

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Planet 13 Holdings has recovered $3.4 million from its case against an investment firm that the marijuana multistate operator alleges “embezzled money from the company’s accounts,” co-CEO Robert Groesbeck told investors.

The Nevada-based MSO announced in January it believed “$22 million of the company’s funds … (were) misappropriated“ by El Capitan Advisors, and Groesbeck shared the recovery of some of the money during a fourth-quarter 2023 and full-year earnings call Wednesday.

“Today we recovered $3.4 million of that and expect to recover an additional $2 million in short order,” Groesbeck said, adding that a special-purpose receiver is working to collect the remaining $16.5 million as well as damages.

Chief Financial Officer Dennis Logan explained that Planet 13 “had a bank that wouldn’t or couldn’t hold the level of cash that we had. They introduced us to El Cap as a sweep (account) to hold our excess cash (in) their (For Benefit Of) accounts.”

“We’re not allowing the company to ever enter into an FBO situation again. We need to have direct control over all of our bank accounts.”

In Wednesday’s earnings call, co-CEO Larry Scheffler said the company “shifted more of our product toward vertical sales” and has “taken a very disciplined approach to extending products on credit to dispensaries” in response to industrywide issues collecting on invoices, particularly in California.

Planet 13 operates and one marijuana store in Santa Ana, California, and two in Las Vegas.

The company launched a new retail store in the Chicago suburb of Waukegan, Illinois, on Dec. 4.

In August, Planet 13 announced a deal to acquire Florida marijuana operator VidaCann for $49 million.

To complete the deal, Planet 13 entered a definitive agreement to sell its “redundant” Florida medical marijuana treatment center license for $9 million.

Planet 13’s total revenue for the quarter ended Dec. 31 was $23 million, down 7.5% from $24.8 million the fourth quarter of 2023.

“This 7.5% decline was largely driven by a decline in the wider Nevada market, which was down 10% sequentially in Q4,” CFO Logan said.

Full-year revenue for 2023 was $98.5 million, a 5.8% drop from 2022.

Planet 13 reported having $11.8 million in unrestricted cash as of Dec. 31, a 69% decrease from the same period in 2022.