Planet 13 Holdings Q4 2025 Earnings Call - Stabilization in Q4, 2026 pivot to positive cash flow after California exit and Nevada cuts

Operator: All right. I’ll place you into your call.

Unknown, Operator/Legal Disclaimer Reader, Planet 13 Holdings: 10-K, including the MD&A and financial statements are available on EDGAR, SEDAR+, as well as on our website, planet13.com. Before I pass the call over to management, we’d like to remind listeners that portions of today’s discussion include forward-looking statements. The forward-looking statements in this conference call are made as of the date of this call. There can be no assurances that such information will prove to be accurate, whether management’s expectations or estimates of future developments, circumstances, or results will materialize. Risk factors that can affect the results are detailed in the company’s public filings that are made available with the United States Securities and Exchange Commission and on SEDAR+. We encourage listeners to read those statements in conjunction with today’s call.

As a result of these risks and uncertainties, the results or events predicted in these forward-looking statements may differ materially from actual results or events. In addition, we will refer to both GAAP and non-GAAP financial measures. For information regarding our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures, please refer to today’s press release posted on our website. Planet 13’s financial statements are presented in U.S. dollars, and the results discussed during this call are in U.S. dollars unless otherwise indicated. On the call today, we have Larry Scheffler, Co-Chairman and Co-CEO, Bob Groesbeck, Co-Chairman and Co-CEO, and Steve McLean, Interim CFO. I will now pass the call over to Larry Scheffler, Co-CEO of Planet 13 Holdings. Larry.

Larry Scheffler, Co-Chairman and Co-CEO, Planet 13 Holdings: Good afternoon, and thanks for joining us. Q4 was a better quarter, where the work we’ve been doing begin to show up in the results. We’re not yet where we ultimately want to be, but this was a meaningful step in the right direction. I’ll walk through our operational performance. Steve will take you through the financials, and Bob will cover the strategic picture. In Q4, the SuperStore, including DAZED, generated $9.2 million, essentially flat from Q3. The Las Vegas environment continues to be a genuine headwind. Visitor volume was down 6.3% year-over-year, and the average visitor spending downtown fell 15.6% over the same period. As a destination experience built around the tourists, we feel both of these pressures.

I’d also note that the F1 race in November displaced approximately four days of normal retail traffic at the superstore, and yet revenue still came in essentially flat with Q3. That tells you something about the underlying run rate of that business. Stripping out the F1 disruption, Q4 was actually a modestly better quarter than the headline suggests. Visitor volume on a sequential basis was flat, so the macro environment isn’t deteriorating further, but we’re not yet seeing the recovery that moves the needle at the superstore. Our neighborhood store network delivered $14 million in revenue, with Florida representing $10.3 million of that total. I should note that the Florida results did include a one-time benefit from a loyalty accrual adjustment.

Excluding that item and setting aside California, which we have now exited, we saw approximately 8% sequential growth over the remaining neighborhood stores in Florida, Illinois, and Nevada. We called Q3 the trough last quarter, and Q4 delivered the stabilization we expected. The foundation heading into a 2026 is stronger. Combined, our SuperStore and neighborhood network generated $23.2 million in total retail revenue compared to $21.3 million in Q3. A sequential improvement that reflects the stabilization we’ve been working towards. Wholesale revenue was $2 million compared to $2.1 million in Q3, though that decline was entirely attributable to winding down California operations. Nevada wholesale was up 38% sequentially, which reflects the wholesale team restructuring we executed in Q2. It’s encouraging to see the operational steps we took last year beginning to show up in the numbers.

Stabilization in the network, in the neighborhood network, wholesale momentum in Nevada, and a cleaner portfolio heading into 2026. The Nevada tourist environment remains a headwind, but we’re positioned to benefit as year-over-year comparisons become more favorable. We’ve done the restructuring work. The 2026 focus is converting those actions into positive cash flow. With that, I’ll turn it over to Steve to walk you through the financials.

Steve McLean, Interim CFO, Planet 13 Holdings: Thank you, Larry. The operational stabilization that you described is showing up in the financial results, and I’ll walk you through the details. In Q4, Planet 13 generated $25.2 million in total revenue compared to $23.3 million in Q3. Sequential growth of approximately 8%. That improvement came during a seasonally soft period, which we view as a meaningful indicator that the operational work across our footprint is beginning to translate into the financial results. I do wanna flag one item for modeling purposes. We completed the California divestiture in early Q1, which removes approximately $2.5-$3 million in quarterly revenue from the run rate going forward. Gross profit in Q4 was $11.2 million, representing a gross margin of 44.6%.

That compares to a reported 21.3% in Q3, which was heavily impacted by a $3.5 million inventory reserve related to an excess of aged flower and concentrates in Florida. Q4 brings us back to where we expect this business to operate. We still see room to improve from here. The BHO lab approval in Florida will expand our product mix and strengthen pricing power. The California exit removes a market that was running well below our corporate margin profile, and the restructuring of our Nevada cultivation footprint removes costs that were a persistent drag on profitability. Bob will speak to the Nevada actions in more detail, but collectively, these are meaningful tailwinds that will increasingly show up in our numbers through 2026, and we expect gross margin to reflect that improvement in a material way.

Sales and marketing expense declined 5% sequentially to $1.1 million, reflecting our continued focus on optimizing spend against profitability. G&A was essentially flat quarter-over-quarter at $12 million, with reductions in the period offset by higher audit and legal fees. We expect G&A to decline as the California overhead is eliminated, and we continue to find efficiencies across the organization. Adjusted EBITDA improved significantly in Q4, narrowing from a $4.1 million loss in Q3 to a $0.3 million loss, a $3.8 million sequential improvement. That result reflects the combination of revenue stabilization across our core markets and gross margin recovery. We’re not satisfied with the loss, but the trajectory is clear and the path to positive adjusted EBITDA from here is well within reach.

Turning to the balance sheet, we ended Q4 with $15.6 million in cash and restricted cash. The BHO lab was our last major capital project. With construction complete, we do not anticipate meaningful CapEx in 2026. The California exit is a meaningful step in the right direction here. It removes a market that was consuming cash without a path to profitability, and its impact will be reflected starting in Q1. Combined with the revenue stabilization and margin recovery we’ve discussed, we expect our cash position to improve meaningfully throughout 2026. In summary, Q4 revenue improved sequentially, margins recovered to normalized levels, and adjusted EBITDA moved materially in the right direction. The balance sheet actions and structural changes we’ve taken position us to continue that improvement through 2026. With that, I’ll hand it to Bob.

Bob Groesbeck, Co-Chairman and Co-CEO, Planet 13 Holdings: Thank you, Steve, and good afternoon, everyone. 2025 was a year of deliberate repositioning, exiting markets that were consuming capital without a credible path to profitability, strengthening our Florida foundation, and bringing the cost structure in line with the realities of today’s cannabis markets. The results aren’t yet where we want them, but the decisions we made last year were the right ones, and their impact is beginning to show up in the numbers as Steve just walked through. The most significant structural step we took was exiting California, as mentioned, a market that had become a persistent drag on both margins and cash flow. We completed that transaction in the first half of February.

While the exit creates a revenue headwind of roughly $2.5-$3 million per quarter, as Steve mentioned, that is more than offset by the margin and cash flow relief of removing an operation that didn’t have a path to profitability in the current regulatory and competitive environment we encountered in California. Florida is where we are putting our resources, and the capital that was being consumed by California is now being redeployed into a market where we have scale, infrastructure, and a clear path to improving returns. On the BHO lab, we’ve done everything on our end. The facility is complete, the infrastructure is fully in place, and the application is pending with Florida regulators. Now, this is entirely in their hands, and we remain hopeful for an approval by the end of Q1.

When that approval comes, it closes a product gap that has put us at a disadvantage relative to competitors in the market for quite some time. It’s been a long time coming, and we are ready to move the moment we get the green light. We also opened two new dispensaries in Q4, Pace near Pensacola and DeLand on the I-4 corridor between Orlando and Daytona. We also made important structural changes to our Nevada cultivation footprint. Beatty was closed in January 2025. It was a high-cost, low-output facility that was no longer defensible or viable in this pricing environment. Wagon Trail was closed at the end of December 2025 and represented the more significant cost reduction of the two. Both facilities are now dark.

Importantly, we are still producing our full range of flower at Bell Drive with meaningful capacity available as needed, there being no reliance on third-party bulk flower. The consolidation of Bell Drive has also allowed us to meaningfully reduce that facility’s cost structure. Taken together, these actions remove a persistent drag on Nevada profitability and position us to operate more efficiently as that market recovers. Those are the operational moves, the ones within our control. For the first time in several years, the external environment is also beginning to shift in our favor. On March 18, the Clark County Commission passed significant new regulations targeting hemp retailers operating outside established compliance frameworks, cracking down on the sale of intoxicating hemp products and deceptive consumer practices.

This is something Planet 13 has actively advocated for. For the past several years, we’ve watched unlicensed hemp operations proliferate across the strip, undermining both consumer safety and the competitive integrity of the licensed market. For years, that unlicensed proliferation, combined with the tourist headwinds in 2025 as Larry discussed, created real pressure on our Nevada revenues. These regulations are a meaningful step toward restoring the supply and demand balance this market desperately needs. The other significant regulatory development is the executive order from President Trump directing support for rescheduling cannabis. If rescheduling is completed, 280E, which has been one of the most punishing structural burdens on licensed cannabis operators, is automatically removed. We don’t have a firm timeline, but for the first time, we have a federal attitude that is actively moving in the right direction.

That has real implications for our balance sheet, tax position, our cost structure, and earnings per share. It is the most consequential potential development the industry has seen today. After several years of navigating an increasingly difficult operating environment, tourist headwinds, illicit competition, and a federal framework that penalize licensed operators, we are finally seeing the regulatory landscape move in our favor. Clark County and rescheduling are both meaningful tailwinds. On top of that, the California exit and Nevada cultivation restructuring remove an internal drag that we chose to eliminate. We’re not waiting on any of them. The work we are focused on every day is what we can control, growing our Florida footprint, improving product quality, and continuing to drive efficiency through cost structure.

The goal for 2026 is straightforward, reach positive cash flow, demonstrate the earnings power of this portfolio, and deliver on the commitment we’ve made to our shareholders. Looking ahead, Q2 will be the first clean quarter that reflects our repositioned portfolio. No California drag, improving Florida productivity, and a low-cost structure that is beginning to reflect the work of the past year. We expect that to be visible in the results moving forward. With that, I’ll open it up for questions from covering analysts. Thank you.

Unknown, Operator/Q&A Moderator: Thank you. We’ll now begin the question-and-answer session. If you dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you’re called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, it is star one to join the queue. Our first question comes from the line of Kenric Tyagi with Canaccord Genuity. Your line is open.

Kenric Tyagi, Analyst, Canaccord Genuity: Thank you, and good evening. If I could lead off on a BHO-related question. Seems to be something of a moving target, for reasons largely beyond your control, or at least certainly this quarter beyond your control. What gives you the confidence or perhaps the hope that you will have this resolved by the end of this quarter? If it’s not, how material is that to your outlook? It certainly reads as if there have been some other pretty material improvements in Florida, you know, outside of the potential BHO lift. Any additional color or context, that’d be really valuable. Thank you.

Bob Groesbeck, Co-Chairman and Co-CEO, Planet 13 Holdings: Yeah, I’ll address the first part. Good afternoon. Steve, I’ll let you address the financial side of it. From an operational standpoint, again, it’s been a very frustrating endeavor. You know, we’ve discovered over the last six months that securing timely approvals out of the OMMU in Florida has been difficult at best. You know, I can’t really comment on why that is the case. We’re not the only operator in that predicament. We have literally submitted every single document required for approval. We’ve met, you know, every requirement of the OMMU, and we’ve gone through a series of RAIs back and forth. In every instance, we’ve provided timely responses.

I think we’re there, and I think it’s just a function now of you know staff getting into the application and giving us final approval. We’re eternally optimistic, but you know we’ve had multiple delays and you know so we’re realistic in that regard. Steve, I’ll let you address the financial impact of that.

Steve McLean, Interim CFO, Planet 13 Holdings: Sure. In addition to the BHO products, you know, we’ve also had a big focus on the flower quality, the higher THC strains. We’ve brought in some new strains that in particular grow well in greenhouse and our type of environment. We’ve had some third-party consultants go through that facility and optimize certain things. All of it is working in our favor and helping bring the quality of that flower up. We’re, you know, learning a lot in the process and you know all that stuff is gonna, is bearing fruit as we go forward, and we’re seeing a lot of that.

There’s also a lot of other products that we’re looking at with various licensing partnerships with some of our other partners that will start to come online this year. There’s a lot of new products that are kind of gonna help contribute to that. Overall, Florida even now it’s cash flow positive. It’s contributing. I think the, you know, the worst is behind us, if you will. I think the third quarter is really probably the low water mark there. It’s been the first quarter’s looking a lot better, and we expect that’s only gonna continue.

As far as, like, the actual revenue expected on BHO, it’s hard to know at this point, so I’m hesitant to even throw numbers around. You know, it can only help having the additional products and in addition to the ones that I mentioned as well. Hopefully that answers

Kenric Tyagi, Analyst, Canaccord Genuity: Appreciate the color. No, thanks, Steve. That does. Maybe just, if I close the loop then on the, at least on my Florida questions. In terms of that Florida cultivation journey, I mean, you’ve highlighted, you know, improvements in yield, strain availability, THC content, you know, all positives. Where do you think you are on that journey today, and how much, you know, where do you think you’re going? How far down the road are you? How far down the road have you come? How much more runway do you think you have until you sit back and look at Florida as being fully dialed? Sorry, Florida cultivation being fully dialed. Apologies.

Steve McLean, Interim CFO, Planet 13 Holdings: Yeah. Well, I mean, as far as our investment goes, I don’t think there’s anything more to do as far as investing money into the facility or anything like that. I think it’s pretty dialed now, although, you know, it tweaks. As we go through and we discover which strains work better than others, you know, we go heavier in those areas. We bring in newer strains that we try. This is gonna be an ongoing evolution. You know, it’s never really gonna end. We’ll always continue to look at processes and things that will improve it. I think we’re pretty satisfied with what’s coming out of there now. I don’t know that there’s a ton left to do there.

Kenric Tyagi, Analyst, Canaccord Genuity: Appreciate the color. I’ll get back in queue. Thank you.

Steve McLean, Interim CFO, Planet 13 Holdings: Yes.

Unknown, Operator/Q&A Moderator: Our next question comes from the line of Pablo Zuanic with Zuanic & Associates. Your line is open.

Pablo Zuanic, Analyst, Zuanic & Associates: Thank you, and good afternoon, everyone. I mean, obviously, congratulations on the growth in Florida. I think you said $10.3 million in sales. That’s about 35% sequential growth in the fourth quarter. That, that’s just a great number. As you just explained, there’s more upside into 2026. I wanna start with a bit of a follow-up to the prior question. You know, how quickly do you think you can start expanding SKUs, especially on the extract side of things with the BHO facility? How quickly can you start bringing in new brands or licensing other brands into the market? I’m just trying to understand how quickly you can move the needle there. Let’s start with that. Thank you.

Bob Groesbeck, Co-Chairman and Co-CEO, Planet 13 Holdings: Hey, Pablo. It’s Bob. Good afternoon. Great question. Again, I can’t. I’m not at liberty at this point to identify the parties we’re negotiating with or where we are in the process on bringing additional products into the pipeline. But we made significant progress. We’ve got a number of approvals pending with the OMMU now on different product varieties and SKUs. And again, the bottleneck is just getting approvals out of the agency. You know, we’re excited. We know that we’ll have some exciting additional launches here next quarter, and we’re continuing to build on those relationships. I wish I could be more precise in that right now, but it is actually, it’s tracking well. We’ve had very positive reception from the partners we’re working with.

They’re, you know, excited to be in Florida, and we’re excited to be partners with them. All I can say is stay tuned. And again, we should have some announcements out to the market here shortly.

Pablo Zuanic, Analyst, Zuanic & Associates: Okay. Thank you. Then, in terms of store count, what can we assume for 2026 in terms of net growth of stores in Florida? You opened two in the fourth quarter. I think there’s been some shutdowns or relocations. If you can just talk about the footprint in Florida for 2026 plans.

Bob Groesbeck, Co-Chairman and Co-CEO, Planet 13 Holdings: Yeah. Steve, I’ll let you address that on the CapEx side.

Steve McLean, Interim CFO, Planet 13 Holdings: I’m excited about it. We are adding two additional stores that, you know, we’re already under contract. One in Sarasota that is already in the middle of sort of the TI construction phase, and we expect that to be online in a matter of, you know, a couple of weeks to several weeks, not months. The second one is in St. Pete. Beyond that, we’re kind of in a wait and see on how that goes and how that lands, and then we’ll go from there.

Pablo Zuanic, Analyst, Zuanic & Associates: Okay. Thank you. Just one last one on Florida. I mean, do you have any views in terms of where we are with the ballot process? I mean, we all read the same headlines. They’ve been somewhat negative recently. Any comments you wanna make there? Maybe there’s reason to be more constructive in terms of the way things play out in November, but what do you think about that?

Bob Groesbeck, Co-Chairman and Co-CEO, Planet 13 Holdings: Well, look, obviously the headlines have been less than positive. I think unfortunately, I believe Trulieve initiated litigation, one of the larger MSOs has, or the ballot initiative organization. I’m not real optimistic in light of the decisions we’ve received thus far from the courts. It doesn’t seem like I think there’s a viable path. I think there’s a lot of some significant issues on whether the votes were correctly tossed out or not counted rather. You know, these third-party noise with out-of-state canvassers. I wouldn’t think the courts would give much attention to that, but unfortunately, they have. Supreme Court is really moved lockstep with the governor’s directives, and that’s unfortunate. There’s not much time left here.

If something’s gonna happen, it’s gonna happen very shortly. We’re gonna miss a window to get ballot, you know, get the question even printed on a ballot. I wish I had more positive news. I’m just not excited where we are. Look, I still remain convinced that Florida will transition to an adult market. It may not be, you know, this upcoming election, though, unfortunately. We’re gonna continue to scale and to operate and get better every day and compete in the market we’re in.

Pablo Zuanic, Analyst, Zuanic & Associates: Yeah. Thank you. Just one very last one. I mean, you’ve been very clear about what’s happening in Nevada and obviously about the sequential improvements, stabilization, you called it. Can you talk about any changes you’ve been doing more recently to the store, to the SuperStore itself, whether in terms of new services, assortment? I mean, we’ve heard before about the museum and the lounge and all of that. Have there been any new tweaks or initiatives to boost traffic to the SuperStore?

Bob Groesbeck, Co-Chairman and Co-CEO, Planet 13 Holdings: Yeah, look, we are fortunate to announce, and we have announced, we have the cannabis what was originally the cannabis museum space completely under our control. That’s back in our portfolio. We’ve been actively negotiating with several users of that space that would you know, create an entertainment option for the complex. Again, I can’t announce anything just yet, but we’re very pleased with you know, the discussions we’ve had, and we see that as a fantastic addition to the complex. You know, again, with DAZED!, we’ve seen you know, meaningful uptick there in traffic and revenue as we continue to promote the venue. We get very high remarks from customers that have experienced the facility. We’re gonna continue to do that.

We’ve recently brought some enhancements into the facility itself, you know, just to, you know, artistic photo ops. You know, we’ve brought some of our materials up from the California location that we closed in Santa Ana and, you know, just create photo moments for customers, get them more engaged with the facility so they can share their experience with customers. We’ve seen, you know, a real nice uptick there. You know, we do have the restaurant open again. We’re using a third-party contractor providing that service. It’s created, you know, or brought that amenity back, which has been very helpful and very well received by the customers. They like the opportunity to have not only food, but alcohol and cannabis under one roof.

We’re gonna continue to push that, market that, and we see good things.

Pablo Zuanic, Analyst, Zuanic & Associates: Yeah, that’s great. Thank you. That’s all.

Bob Groesbeck, Co-Chairman and Co-CEO, Planet 13 Holdings: Thanks, Pablo.

Unknown, Operator/Q&A Moderator: Our next question comes from the line of Brenna Cunnington with ATB Capital Markets. Your line is open.

Brenna Cunnington, Analyst, ATB Capital Markets: Hey, y’all. This is Brenna. Federico, congrats on the quarter, and thanks for taking our questions. Just continuing on with Nevada and the SuperStore specifically. If I remember correctly, last quarter was a record quarter for DAZED!. Could we just get a little bit more color on how DAZED! did this past quarter and any exciting things going on there?

Bob Groesbeck, Co-Chairman and Co-CEO, Planet 13 Holdings: Thanks, Brenna. Steve, I’m gonna turn to you to address you. You’ve got that on your computer there. I don’t have it up on my screen.

Steve McLean, Interim CFO, Planet 13 Holdings: Sure. Yeah, DAZED!, it’s actually been really exciting to see that facility kind of blossom over the last six months now at this point. It continues to exceed our plans. It’s been a lot of fun for some of our partners and a lot of, you know, the customers to go in there for different events. You know, we’ve been having some fun with it. I don’t know what more to really say other than, you know, it’s really nice to see that facility do well and be successful.

I would say it’s we’re looking at about 25%+ revenue increase versus last year at the facility, and I see that continuing for the foreseeable.

Brenna Cunnington, Analyst, ATB Capital Markets: Amazing. Good to hear. Like, in Nevada in general, like, it’s good to hear that the wholesale momentum is starting to come back. But it was mentioned early in the call that you’re not seeing the recovery in the state that would be needed to really move the needle at the SuperStore. Theoretically speaking, what would it take for Las Vegas to really come back?

Bob Groesbeck, Co-Chairman and Co-CEO, Planet 13 Holdings: Oh, boy. That’s, Brenna, that’s a tough question. Obviously, at the macro level, we need gas prices to go down. We need room rates to become more affordable. In Las Vegas, just to get more in line with what customers are willing to pay. There’s a perception out in the universe that Vegas has become too expensive. I think, there’s some merit to that in many respects. I see some of the larger hotels now are putting together very, very significant discount packages to drive traffic. We believe that, you know, the short-term spike in gas will be short term, rather, the spike in gas. You know, which will benefit our continuing California traffic. You know, look, Vegas, the city went through a very significant downturn last year.

As the economy continues to improve at a macro level, we see, you know, Vegas, you know, coming back.

Larry Scheffler, Co-Chairman and Co-CEO, Planet 13 Holdings: In a very significant way. We’ve been through this many times over the years, and we’ve seen, you know, ups and downs here in the tourist sector. It’s gonna come back, and it’ll be as robust as ever. We’ve got several mega resorts under construction, or one really mega resort under construction, some significant additions elsewhere. Lots of traffic. You know, we’ve got Major League Baseball coming soon. You know, the only professional sports franchise we’re missing is the NBA, and my guess is something will be inked this year for the next franchise. It’s an exciting time, and we’re just getting positioned to take advantage of that. Now, in light of the tourist drop, what we’ve done is reposition to really go back and focus on the local customers here. We’ve made meaningful inroads there.

Unfortunately, you know, historically, we were, you know, about 80% of our customer base through the SuperStore was non-Nevadans. You know, that’s had a pretty significant impact on revenue and traffic. Now we’ve gone back to the locals and really kind of pushed this venue as well as an opportunity for them. You know, we’re seeing results of a pretty aggressive marketing campaign to get them to this facility as well. Yeah, excited. Neil, hey, this is Larry Scheffler. I’ll just add in that even though the tourism is down, I agree with everything Bob just said, but you gotta realize we only touch 2% of the tourists coming to Vegas right now. We have a lot of upside for us.

What we’ve done, we’ve made major changes in our marketing department, in our social media outreach, stuff we’ve never done before. We had a little bit of, for about two years, had a fairly weak marketing social media department. We’ve made major changes on people heading it and support groups working underneath the new director. We’re very happy with that, and I think all of you guys will see major changes and increases for Planet 13 upcoming this year.

Brenna Cunnington, Analyst, ATB Capital Markets: Okay, that’s great color. Thanks for that. Then just our final question is just looking at the margins, it’s good to see that there’s been a bounce back this quarter. Looking ahead and for modeling purposes, how should we be thinking about the gross margin and EBITDA margins in 2026? What kind of cadence or margin build might we see throughout the year?

Steve McLean, Interim CFO, Planet 13 Holdings: I’ll take that. Dave, you can jump in. Sure. Look, the heavy lifting is kind of complete as far as reorganizing these cultivation facilities, pulling California out, you know, especially in the last quarter, and the trend that we were seeing there was very negative. You know, in California, we saw a total combined $1.7 million EBITDA loss, and so that was trending toward $2 million a quarter, and we’ve removed that from the go forward. Really excited to see what that does. You know, internally modeling this out and between that and what we’ve done in Nevada, we’re expecting to see margins north of 50%, starting in the first quarter.

Larry Scheffler, Co-Chairman and Co-CEO, Planet 13 Holdings: Really exciting versus, you know, where we’ve been in the last few quarters and having to to battle through some of those challenges. From an EBITDA standpoint, it you know it’s a little more challenging, but we are expecting a positive EBITDA full year. I’m showing a small loss in the first quarter as we’ve you know we’ve had half, basically half of a quarter of California still in those results. Beyond that, every quarter looks positive. You know, that’s all I can really give you at this point.

Brenna Cunnington, Analyst, ATB Capital Markets: Amazing. Great color. Thank you so much. I’ll jump back in the queue.

Unknown, Operator/Q&A Moderator: Our next question comes from the line of Kenric Tyagi with Canaccord Genuity. Your line is open.

Kenric Tyagi, Analyst, Canaccord Genuity: Thank you for taking the follow-up. Just a quick one on the hemp ban. It reads as if it’s more material for you with your Vegas concentration than for Nevada more generally, just given the prevalence or sheer number of, you know, let’s call them hemp stores operating in Vegas or on the Strip. Is that a fair characterization? And is there any way you could sort of handicap just how material that headwind has been and any potential sort of lift to the, you know, to, from that ban, looking through 2026?

Larry Scheffler, Co-Chairman and Co-CEO, Planet 13 Holdings: You want to take that one? Okay. This is Larry Scheffler. Bob Groesbeck and I have been working on getting rid of these intoxicating hemp stores on the Strip. As you know, licensed cannabis stores in the state of Nevada cannot be in the gaming corridor. About a mile either side of the Strip cannot deliver to the hotels. After two years worth of work with the Clark County Commission that controls Clark County and the Las Vegas Strip, last Tuesday, they finally passed an ordinance outlawing the hemp stores on the Strip. They cannot sell any THC-intoxicating flower, gummy squares or anything. In 120 days, that takes effect from last Tuesday.

I spoke at the meeting and we were in 2021, the state of Nevada did $1 billion in sales for licensed cannabis dispensaries. Last year, we did $700 million. That $300 million is attributable to being stolen from us by the hemp stores on the Strip and in other areas in Clark County and Las Vegas. We have got paid tremendous amount of taxes, three or four, five other taxes that the hemp stores do not have to pay. That would be hundreds of thousands of dollars. That is lost revenue to the state, the taxpayers of the state of Nevada.

The Clark County commissioners saw the dangers of mold and insecticides that is being sold on the Strip with no testing whatsoever other than the 0.3% testing to make sure it’s hemp and in the right amount of THC when it’s first harvested. They saw through all of it. They did a lot of work on this, a lot of studies. They backed us 6-0 in the vote. Again, the hemp store selling these intoxicating hemp products on the Strip will be done in 120 days. That’s gonna be a huge boom to us. We’re predicting $1 million-$2 million per month we’ve lost to the hemp stores on the Strip because 81% of our customers are tourists.

That is another part that we anticipate a huge increase in revenue for us, starting 2026, the second half.

Kenric Tyagi, Analyst, Canaccord Genuity: Thank you so much. It’s a far bigger tailwind than I think perhaps many appreciated. Really appreciate the color.

Unknown, Operator/Q&A Moderator: With no further questions, that concludes our question and answer session as well as today’s call. We thank you for your participation, and you may now disconnect.