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Jan 10, 2019

Vegas pot retailer Planet 13 seeking JV to expand into Canada

Canadian cannabis shortage could persist for years

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Planet 13 Holdings Inc., which operates the biggest cannabis store in the world, would be open to a joint venture so that it could expand into Ontario, but isn't participating in the province's lottery for a retail store license, according to the company's chief executive. 

"We've been in touch with a number of groups [in Ontario] that are in the process," Bob Groesbeck said in a phone interview with BNN Bloomberg. "If we move forward with that process, we'd look at more [joint venture] opportunities." 

Planet 13 opened its "Superstore" in Las Vegas in November and served an average 1,430 customers per day last month with an "average ticket above stated expectations," the company said in a recent statement. At 112,000 square feet, the Superstore is the biggest pot store in the world located near the Las Vegas Strip and includes 42 cash registers, an LED interactive floor and dozens of cannabis strains. 

A recent report by Beacon Securities highlighted that Planet 13's business model is well positioned to capture tourists’ cannabis dollars and could take a sizable chunk of the estimated US$150 million spent on cannabis in Las Vegas. That number could increase once Las Vegas approves on-site consumption of cannabis, turning Planet 13's store into a massive pot-smoking lounge. 

While Groesbeck says future Planet 13 stores won’t match the same scale of its Las Vegas flagship, the company's expansion efforts are targeting heavily-trafficked areas that cater to tourists and high-end customers. 

"We're looking to expand the Planet 13 brand well beyond Nevada, so we're looking in other U.S. jurisidictions and we'd like to be in Canada at some point," he said. 

Groesbeck said the company has looked at opening new stores across Canada including in Toronto, Vancouver and Quebec. 

"There's plenty of opportunities in Canada to do something high end," he added. "Toronto is positive on so many levels." 

The company also has production and cultivation licenses in Nevada but was unsuccessful in obtaining new licenses for pot shops in the U.S. state last month. The state's decision was a significant reason why Planet 13's shares have falled by 53 per cent since reaching all-time highs in November on the Canadian Securities Exchange. 

Groesbeck said the company has initiated legal action against Nevada to determine why its application for additional licenses was rejected. 

"We're going to let that work its way through the courts, but we thought we submitted excellent applications and we've demonstrated we're top operators [in the state]," he said. 

Cannabis Canada is BNN Bloomberg’s in-depth series exploring the stunning formation of the entirely new – and controversial – Canadian recreational marijuana industry. Read more from the special series here and subscribe to our Cannabis Canada newsletter to have the latest marijuana news delivered directly to your inbox every day.