Cannabis dispensary Planet 13, which operates one of two consumption lounges in Las Vegas, is paying $6.9 million to acquire rival Las Vegas dispensary Exhale in a move that one industry consultant called “a step in the right direction” for evaluating the value of Las Vegas cannabis businesses.
The transaction, announced Wednesday, is subject to the approval of the Nevada Cannabis Compliance Board (CCB) and the transfer of the business license by Clark County. The sale price includes $4 million for the business plus $2.9 million for the cannabis inventory.
A CCB spokeswoman said transfers of interest in cannabis dispensary ownership are a routine process for the board and usually take three to six months to complete. The agency approved nine ownership changes between June and August. The CCB investigation process is similar to licensing investigations handled by the Gaming Control Board.
The CCB does not disclose the sale prices of dispensaries because the ownership groups are private entities. However, Planet 13 is part of a publicly traded company and disclosed the sales price because it was determined to be material to earnings under Securities and Exchange Commission guidelines.
Exhale is located on West Flamingo Road near the resort corridor and across the street from the Palms Casino Resort. The 3,100-square-foot dispensary also has a drive-through pick-up window. It does not have a consumption lounge.
“Increasing our scale, operating leverage and verticality in Nevada is one of the most cost-efficient levers for profitable growth we have, and this dispensary couldn’t be a better fit for our portfolio,” Planet 13 co-CEO Bob Groesbeck said in a statement.
Planet 13’s flagship is a 120,000-square-foot facility in an industrial area just west of the Strip that resembles a shopping mall for all things cannabis. In addition to the dispensary, the facility includes the Dazed! consumption lounge, which opened in April, a non-cannabis restaurant, retail and other entertainment options.
“It seems like a good number,” said Christopher LaPorte, managing partner of RESET, a cannabis consulting firm. “Commanding both the north and south sides of the Vegas Strip and having two locations with proximity to the casino corridor is very smart for capturing tourist traffic.”
LaPorte said dispensary businesses with cannabis lounges should be more valuable than non-consumption locations. His company was a consultant to Smoke and Mirrors, the consumption lounge inside the Thrive Cannabis Dispensary, which is across the street from a back entrance to Resorts World Las Vegas.
Colin Ferrian, portfolio manager at San Francisco-based cannabis investment firm Poseidon Investment Management, suggested cannabis licenses in emerging markets, such as in Florida or Illinois, are more valuable than licenses in established markets, such as California, Colorado and Oregon, where adult use has been legal for a decade.
Nevada voters authorized the recreational use of marijuana in 2016 and dispensaries have flourished — there are more than 100 retail cannabis stores throughout the state, according to the CCB. Throughout the 12 months of the 2024 fiscal year, adult-use marijuana dispensaries reported more than $829 million in taxable sales, according to the Nevada Department of Taxation.
In Nevada, cannabis consumption lounges were legalized through AB341 in 2021. The state’s first lounges opened earlier this year in Las Vegas — the CCB has said the lounges needed extra time to ensure they met state regulations before opening.
Planet 13 has a second Las Vegas dispensary on Sunset Road. Groesbeck said additional dispensaries in Nevada are a business opportunity for the company to expand its market and share fixed expenses across multiple dispensaries.
Planet 13’s parent company, Planet 13 Holdings, is publicly traded on the over-the-counter market. In addition to Las Vegas, the company operates dispensaries in Santa Ana, California, and Waukegan, Illinois. The company is planning to open locations in Florida.
