Should You Believe the Hype on Marijuana Stock Planet 13?

One of the more offbeat marijuana stocks is small, Las Vegas-based dispensary operator Planet 13 Holdings (OTC:PLNH.F). The company is certainly colorful, and in that Las Vegas way it knows how to market itself and put on a show. Whether its stock is a buy is another question, though.

Veteran Motley Fool contributor Eric Volkman and healthcare and cannabis bureau chief Corinne Cardina take a brief look at Planet 13’s prospects in this segment from Motley Fool Live recorded on Feb. 5, 2021.

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Corinne Cardina: “Interested in your thoughts on Planet 13.” Of course, this is a company that has their cannabis superstore in Vegas. They are planning a second superstore in California. Eric, what do you think about Planet 13?

Eric Volkman: They’re an intriguing little company. They have an interesting approach. They have this Vegas-like hype behind them. They have a theatrical sense. it seems to me, they know how to make a splash, they know how to make an impact. Their superstore, they’ve made that a tourist attraction which I think is a very interesting thing.

The novelty has worn off a bit now that legalization is spreading and it’s not unusual in various U.S. states to have dispensaries, maybe the bloom is a little bit off the rose. But I like their approach to the market.

The only thing about them is that if you strip things down past the hype and past the splash in this, they’re yet another retailer and a fairly small retailer, I would be more interested in some of the other retail-facing stocks that have maybe a bigger footprint or are in a better position to expand out. I don’t think [Planet 13 is] greatly positioned. They’re plastered here on the West Coast where you have a lot of other well-established dispensary chains and some of the major companies either involved in this market or coming to the market in places like Arizona.

I think it’s a colorful company, I think it’s an interesting company. I don’t think it’s a particularly interesting stock to buy.

Corinne Cardina: I do think the big story there is how they did not get crushed by the pandemic. They really pivoted to delivery and managed pretty well. That is definitely a good sign for their management.

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