Planet 13's Pivot: Turnaround Talk Meets Tough Financial Realities

LAS VEGAS, NV – March 25, 2026 – Planet 13 Holdings Inc. painted a picture of strategic repositioning and nascent recovery as it announced its fourth-quarter and full-year 2025 financial results, but the optimistic narrative from management clashes with a stark set of numbers showing continued revenue decline and substantial annual losses.

The vertically-integrated cannabis company reported Q4 2025 revenue of $25.2 million, a 16.7% decrease from the same period in 2024. For the full year, revenue fell 11.2% to $103.4 million, while the company's net loss widened to a staggering $63.9 million, up from a $47.8 million loss in 2024. Despite these figures, Co-CEO Larry Scheffler declared that “Q4 began the turnaround we were looking for,” citing stabilized revenue and a more focused portfolio.

This declaration sets the stage for a pivotal 2026, where the company's aggressive strategic shifts—including a complete exit from the California market and a deeper push into Florida—will be tested against persistent market headwinds and a weakening balance sheet.

A Tale of Two Narratives

In the official announcement, Planet 13's leadership focused on a forward-looking strategy aimed at achieving profitability. “Our focus in 2026 is to reach cash flow positive and demonstrate the earnings power of this portfolio,” stated Co-CEO Bob Groesbeck. Management pointed to a cleaner fourth quarter, where the net loss of $4.6 million was a dramatic improvement from the $26.4 million loss in Q4 2024. However, that prior-year figure was heavily skewed by a massive $18.9 million impairment charge, making a direct comparison misleading.

Looking at the full-year results provides a more sobering context. The $103.4 million in 2025 revenue not only represents a decline from 2024's $116.4 million but continues a downward trend from the company's peak revenue of $119.5 million in 2021. The full-year net loss of $63.9 million was worsened by $29.8 million in non-cash impairment charges, signaling that the company believes certain assets are no longer worth their book value.

Perhaps most telling is the performance of Adjusted EBITDA, a non-GAAP metric that strips out certain expenses to measure operational profitability. After posting a $4.8 million Adjusted EBITDA profit in 2024, Planet 13 swung to a significant $10.1 million Adjusted EBITDA loss in 2025. This reversal indicates that, before accounting for interest, taxes, and other items, the core business operations are consuming more cash than they generate.

Gross profit margin for the full year also compressed significantly, falling from 48.2% in 2024 to 38.6% in 2025. The company attributed this squeeze to “weaker flower quality in Florida and increased competition and price compression,” highlighting the operational and market-based challenges it faces.

Strategic Retreat and a Floridian Gambit

In response to these challenges, Planet 13 has undertaken a significant strategic overhaul. The most dramatic move was its “substantially complete exit” from the California market, finalized in February 2026. While exiting the world's largest legal cannabis market may seem counterintuitive, management framed it as a necessary step to eliminate a “persistent drag” and “cash drain” on the company's resources. The move allows Planet 13 to refocus its capital and attention on markets where it believes it has a clearer path to profitability.

That path now runs squarely through Florida. The company is betting heavily on the Sunshine State, opening new dispensaries in DeLand and Pace during the fourth quarter of 2025. This expansion is intended to be the primary engine for future growth. However, the company's own financial reports acknowledge that “competition in Florida” was a key driver of its 2025 revenue decline, indicating that success is far from guaranteed.

To bolster its position, Planet 13 is banking on a new BHO (Butane Hash Oil) lab in Florida, which Mr. Groesbeck stated “positions us to compete more effectively.” This facility is crucial for producing higher-margin cannabis concentrates and derivative products, potentially improving both sales and profitability in a highly competitive market. The success of this Floridian gambit depends on the company's ability to not only expand its retail footprint but also to win over consumers with quality products in the face of entrenched competition.

A Balance Sheet Under Pressure

Underpinning the strategic shifts is a balance sheet that shows clear signs of strain. The company's liquidity position has weakened considerably over the past year. Cash and restricted cash fell by nearly $10 million, from $25.4 million at the end of 2024 to $15.6 million at the end of 2025.

This cash burn is accompanied by a dramatic reduction in the company's asset base. Total assets plummeted from $206.7 million to $152.3 million in the same period, a decline of over 26%. This was driven largely by the significant impairment charges that wrote down the value of the company’s assets. At the same time, total liabilities crept upward, rising from $94.0 million to $101.2 million.

This combination of dwindling cash, shrinking assets, and rising liabilities paints a concerning picture of the company's financial health. It reduces the cushion available to weather further market downturns and could constrain its ability to fund the ongoing Florida expansion without seeking new, and potentially expensive, outside capital. While management is focused on achieving positive cash flow in 2026, it will have to do so with considerably less financial flexibility than it had a year ago.

Industry Headwinds and a Regulatory Lifeline

The challenges facing Planet 13 are not occurring in a vacuum. The company's struggles with price compression, intense competition, and a difficult consumer environment in its core Las Vegas market are symptomatic of broader, industry-wide headwinds. Many multi-state operators are grappling with similar issues as markets mature and supply increases.

Yet, there is a powerful tailwind on the horizon that could fundamentally alter the financial fortunes of the entire sector. As Co-CEO Bob Groesbeck noted, “the federal posture on rescheduling represents the most consequential potential shift this industry has seen.”

The U.S. Department of Health and Human Services has recommended that cannabis be moved from Schedule I to Schedule III of the Controlled Substances Act. Such a change would have a monumental impact by making cannabis companies exempt from a punitive federal tax law known as IRC Section 280E. This provision currently prohibits them from deducting standard business expenses like rent, payroll, and marketing, resulting in extremely high effective tax rates.

Eliminating the 280E burden would dramatically improve profitability and cash flow for companies like Planet 13 overnight, providing a much-needed financial lifeline. For Planet 13 and its peers, the race is on to stabilize operations and survive the current market pressures long enough to benefit from a regulatory change that could finally unlock the industry's long-promised economic potential.