Risk On With Planet 13

NFT’s are selling for millions of dollars, stimulus is getting approved, Wall Street Bets has pushed GameStop back to $300 a share, and tech has potentially found a bottom after it’s recent pullback.

Ahhhh, just another typical week.

In honor of the major swings tech has been experiencing I’m going to focus on one of my favorite speculative positions that has also seen its fair share of volatility.

Also, shout out to Ryan for this idea and if you would like to see something particular in a future email let me know!

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“Rich people make money when the stock market goes up, rich people make even more money when the stock market goes down.”

I don’t pick many individual stocks but as a young investor I think it is healthy to take calculated risks. This is one of those stocks I am taking my chances with.

Before we get into it I want to be clear this is not near the quality of stock compared the usual names like Apple, Facebook, Johnson and Johnson, or Starbucks.

They are also listed on the OTC market which means Robinhood and M1 users will not be able to purchase shares.

The Planet

For those who don’t know Planet 13 is a cannabis company that operates one of the worlds largest dispensaries in Nevada, with plans for another in California around mid-year 2021.

Don’t get it confused though, they aren’t your typical dispensary.

Welcome to the “SuperStore.”

As you can see these stores are incredible and appeal to the “experience” with their interactive LED floors, laser graffiti, and 3D projections. In a recent presentation Planet 13 posted a stat that 74% of Americans prioritize experiences over products.

Click here to see that presentation.

While I have never physically visited one of the stores, or participated in any of their products, I do believe that the cannabis industry has the potential to expand due to new government agendas.

Coupling this with the fact they are a smaller market cap company I see a better potential of a 2x-5x on my money. Planet 13’s five year objective of having 8+ SuperStores reinforces my opinion on this.

Planet also announced that they will be taking over a 45,000 square foot indoor cultivation facility which will help expand supply and ensure their stores stay stocked. Additionally, this will help the production of their brands which they have been pushing to grow and distribute in their own facilities.

Some Numbers

Planet 13’s market cap is around 1 billion and revenue growth is projected at around 98% for 2021. Next year Planet will likely begin to show better profitability as crowds return to Vegas.

Estimates have them at an EPS of 0.09 in 2021 compared to -0.03 in 2020.

Their balance sheet is also respectable for such a small company with a cash balance of around $60 million and long term debt of only around $1 million.

Conclusion

Looking into 2021 and beyond Planet 13 has the potential to expand their brand and solidify themselves as one of the major names in the sector. They are an interesting play away from your typically fintech and innovation companies.

Once again, this isn’t investment advice just a look into one of the businesses I am willing to speculate with.

Remember with stocks like this the chance of losing everything is much higher so manage your risk accordingly.

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Now what you all actually came here for.

Cathie Wood and her Ark take home the win for meme of the week with this one…

Thanks for reading, if you have any questions, comments, suggestions, etc. about the email send me a DM on twitter. See you next week!