Top marijuana multistate operator Planet 13 Holdings has recently announced the recovery of $3.4 million from a legal case against investment firm El Capitan Advisors. The Nevada-based company had accused the firm of embezzling its funds.
According to co-CEO Robert Groesbeck, the advisory company allegedly misappropriated nearly $22 million of the MSO’s money. During a recent earnings call for the fourth quarter of 2023 and full-year, Groesbeck shared news of the partial recovery with investors.
Further recoveries anticipated
In addition to the $3.4 million already reclaimed, Groesbeck stated that the company expects to retrieve an additional $2 million imminently. He also revealed that a special-purpose receiver is actively working to collect the remaining $16.5 million and damages in connection with the case. Alerting investors, Groesbeck added, “We need to have direct control over all of our bank accounts.”
Pivoting towards vertical sales amidst industry challenges
As part of the same conference call, co-CEO Larry Scheffler reported various strategic changes the company has implemented due to ongoing industry-wide issues, particularly in California. Scheffler explained that Planet 13 has “shifted more of our product toward vertical sales” and adopted “a very disciplined approach to extending products on credit to dispensaries.” These moves are expected to strengthen the company’s financial performance in the face of adversity.
Selling Florida medical marijuana treatment center license
To complete a recent business deal, Planet 13 entered a definitive agreement to sell its “redundant” Florida medical marijuana treatment center license for $9 million. This transaction is believed to help the company streamline its operations and focus on future growth opportunities.
Decrease in fourth-quarter revenue
The latest financial reports from Planet 13 showcased that total revenue for the quarter ended Dec. 31 dropped by 7.5% compared to the same period last year, reaching $23 million, down from $24.8 million in the fourth quarter of 2023. However, management’s proactive efforts to adjust the company’s strategy and recover lost funds are expected to improve performance as time progresses.
Financial position at the end of 2024
As the year closed, Planet 13 reported having $11.8 million in unrestricted cash as of Dec. 31. This figure represents a 69% decrease compared to the company’s unrestricted cash balance during the same period in 2022.
While these figures raise concern, the ongoing effort to recover misappropriated funds and adjustments to their product offering strategies indicate proactive measures taken by the management to deal with the situation effectively.
A Stronger Future for Planet 13 Holdings
While Planet 13 Holdings has faced challenges related to embezzlement accusations and decreased revenue, the company appears to be resilient, adapting to market conditions and taking necessary actions to emerge even more robust. The recovery of a significant portion of its lost funds showcases the management’s determination to ensure financial stability and put shareholders’ interests at the forefront.
Rita Ferreira
Rita is a seasoned writer with over five years of experience, having worked with globally renowned platforms, including Forbes and Miister CBD. Her deep knowledge of hemp-related businesses and passion for delivering accurate and concise information distinguish her in the industry. Rita's contributions empower individuals and companies to navigate the complexities of the cannabis world, and her work remains a valuable resource for those seeking a deeper understanding of its potential.
