Planet 13 Holdings Inc. (OTCQX:PLNHF) is a vertically integrated cannabis company. In my view, the company offers investors compelling exposure to the growing cannabis market through several angles. Moreover, I’d say it’s fair to consider PLNHF a growth company, as it’s expanding aggressively throughout Nevada and plans to grow nationwide eventually. Hence, PLNHF undoubtedly gives investors a great investment opportunity in the sector.
This is why I believe the underlying business is an excellent long-term hold, as it’s likely it’ll do well over time. However, the stock is currently pricing in several years of future growth, making it relatively expensive. Finally, my valuation model suggests that the company is, at best, fairly valued at these levels. And since my model’s inputs are quite optimistic, I conclude it’s prudent to wait for lower prices. In particular, I think $2 to $2.25 per share would be attractive from an investment perspective.
Source: Company website
One of the most compelling arguments in favor of PLNHF is that it’s vertically integrated. Its operations go from cultivating cannabis to branding innovative product variations and selling them through their retail stores. Moreover, PLNHF’s stores themselves are quite differentiated from other regular dispensaries. And this is where PLNHF’s stock truly shines.
You see, management is intently focused on delivering a differentiated customer experience for cannabis. This is why PLNHF is quite an individual stock in this sector. It reaps profits through every instance of its chain of production, adding value along each step. In turn, this allows PLNHF to reap the benefits of differentiation and a compelling value proposition through top line growth and healthy margins.
Source: Planet 13 often has overall positive reviews.
This is why it’s not surprising that the company is quickly gaining market share in its primary market: