Rena Sherbill: Hi again, everybody. Welcome back to the show. Happy almost Thanksgiving for those of you in the States and who will be celebrating, even if you’re not in the States, but you’ll be celebrating Thanksgiving, I hope you’re finding a way to enjoy that time amidst all the madness and confusion. Hope you are able for those having a holiday weekend, able to have a great one.
Today I’m really excited, speaking of the States to bring you our interview with Bob Groesbeck, who is Co-CEO of Planet 13 (OTCQX:PLNHF), an exciting cannabis company. I’m sure a lot of listeners already know about. They’re known for their flagship store in Vegas, and a real experiential retail experience, a real experiential retail space, all encompassing not just selling cannabis, but a cannabis experience, and Bob gets into that. They just released earnings. So, a great time to hear from Bob.
And a great depiction of why investors should be excited about the U.S. in particular, not necessarily the MSO model, but certainly the U.S. in particular. And Bob gets into why their model makes so much sense. And the recent earnings certainly prove that out. And I wanted to spend the rest of the introduction just reading some quotes from their recent earnings, touting it as their best quarter ever and they go into why that is.
So here’s straight from the company from yesterday’s earnings:
Despite the ongoing pandemic and Las Vegas being at less than 50% tourist occupancy, compared to the same period a year ago, we generated $22.8 million in revenue, 36% higher than our highest quarter ever. Once again, we’re responsible for 9% of the State’s total sales. And this is continuing into Q4 with October posting another month for over 7.5 million in revenue. We improved superstore throughput, refined marketing towards locals and tourists, resulting in higher traffic and ticket and 18.5 million of revenue from the superstore.
In the first full quarter of wholesale, we saw over 1 million in sales, our HaHa Gummies particular have been a resounding success, taking multiple spots for the top edible skews in Nevada. Encouraged by this, we’ve expanded our skew selections with HaHa Beverages, which were introduced in October.
So, I just wanted to give you some color on their recent earnings report and just some things to be aware of as we get into the interview. Lots of exciting earnings releases in general, we’ve been talking about it for the past couple of weeks. I’ve been tweeting about it. I’ve been posting about it. We’ve been talking about it here of course and this is another example of some great earnings and reasons for investors to be excited to talk to you guys next week. Hope you enjoy this one.
And before we begin, a brief disclaimer, nothing on this podcast should be taken as investment advice of any sort. And in my model cannabis portfolio I’m long Trulieve, Khiron, GrowGeneration, Curaleaf, Vireo Health, and Isracann BioSciences. You can subscribe to us on Libsyn, Apple Podcasts, Spotify, Google Play, and Stitcher.
Bob, welcome to the Cannabis Investing Podcast. Really happy to have you on the show. Thank you so much for joining us.
Bob Groesbeck: Thank you very much. Great to be with you.
RS: So, let’s start at the beginning. How did you get to Planet 13? How did you get to the cannabis industry?
BG: Wow, how much time do you have? I can talk hours about that. But let me give you the nutshell. My partner Larry Scheffler and I we’ve been together in business for 25 years. We’ve done a lot of land development over that period of time. And I happen to be at a county commission meeting one time on one of our zoning issues and really not paying any attention to what was going on just waiting for [my item] to be called. And I thought I heard somebody mentioned the word marijuana. And I thought, I must have misheard that. So, I just went on and continued to read the agenda item that I was dealing with. And then sure enough, you know, a few minutes later, they started talking about marijuana again, and I thought what the heck’s going on.
So, I looked at the monitor and the agenda item was adopting rules for medical marijuana. So, I walked down to the side of the room and grabbed a hard copy of the agenda on that item and went back and read it and I thought, wow, that’s amazing that they we’re doing that. And I didn’t realize that in 2000, we’d voted to legalize medical marijuana and it took our legislature 13 years to actually adopt a regulatory framework. So, you know, Larry and I sat down and talked about that. And we were just both shocked, but we were incredibly intrigued and thought, you know, this is like a, perhaps a once in a lifetime opportunity.
You know, it’s like when, you know, they legalized alcohol after prohibition, and in Nevada, or closer to home, rather, when we legalized gaming, you know, went from the underground to, you know, a regulated activity. And so, you know, we were just fascinated and intrigued, and, you know, started doing some due diligence. And then we thought, you know, what, let’s give it a shot. And we knew it was going to be incredibly competitive. But, you know, we put our hat in the ring, so to speak. And, you know, fast forward six years, here we are.
RS: And were you a cannabis connoisseur? Let’s say, were you part of the cannabis community? It sounds like maybe you were?
BG: No, really, I was not. I mean, I’m supportive of cannabis, obviously, very supportive, but certainly not a connoisseur, but, you know, I’m very libertarian, and things like this. And I thought, you know, people should have a right to do this legally, and not fear, you know, prosecution or, you know, any criminal penalties. And so, you know, for me that, that decision was easy. It was, you know, I just had zero understanding of the industry. And, you know, obviously, the regulatory framework was brand new. You know, I understood business, as did Larry, but for us, it was, you know, was a steep learning curve.
RS: And how did you build that learning curve? Who did you lean on? Did you bring in people that new cannabis, did you rely on your previous experience? How did you build Planet 13 to where it is now?
BG: Well, the Planet 13 concept, Larry and I are very comfortable in that arena in Las Vegas, tourism, and we’ve both been here for many years, we understand how that works. But on the marijuana specific knowledge, you know, we reached out to so-called consultants. One thing we discovered in this industry, in its infancy, there were a lot of – a lot of talkers, a lot of charlatans, we actually paid some fees to, you know, folks to represent us on certain issues, and quickly discovered, they had no idea what they’re talking about. And so it was incumbent upon us to really educate ourselves, and really surround ourselves with people that really understood the industry. And we’re very, very fortunate that our third partner Chris Wren, Chris was, you know, he’s been growing his whole life.
He’s a second generation grower. His father had roots in the underground. And just a phenomenal young man, just multi-talented, and as knowledgeable as anyone I’ve ever met in the industry, even today. Just a genius. And when we met Chris, which was purely by accident as well, it was funny because we were interviewing a number of potential growers and production personnel, and we just didn’t have a good feeling. But both of us knew that that was an integral part of the business if we’re going to be successful. And we were very frustrated.
We probably talked to 25 potential candidates, until we hit on Chris. And, you know, that kind of put it in to give you the little story. He shows up at Larry’s house one Saturday morning, of course I’m in flip flops, wear my hair backwards and T shirt and shorts, and so was Larry and we get a knock on the door. And this young man, you know, very well groomed, had a suit and a briefcase. And we thought, who are you? Because he wasn’t anything like …
RS: Turning those expectations upside down?
BG: Yeah, he wasn’t anything like the candidates that we’ve met and talked with? And so, he actually came in and showed his wares, and he pulled out some flower, some shatter. And he said, yeah, these are actually going to Holland to the Cannagraphic Cup. And so he educated us on all that. Turns out, you know, fast forward a bit, he won first in the world in those two categories that year for Chloe. But he left the meeting after about an hour. And as soon as the door closed, Larry and I looked at each other and said, look, we think we just found our guy. And so, he’s been with us ever since. And just been a fantastic addition to the team and, you know, really kind of helped pull the two of us, Larry and myself up, and you know, educate us on the industry on the technical side of marijuana, and so it’s – and in turn, we’ve, you know, he’s grown, as well as the business side of this. So, it’s a really good team.
RS: That’s awesome. That’s a great origin story. I love people flipping expectations on the head. I feel like also it’s a rite of passage in the industry to be dealing with, like the charlatans, and the, you know, those types of bad actors in the space like everybody that has come on has dealt with it in one way or another. Unfortunately. What was the strain? What was the strain that Chris won with?
RS: Chloe, okay, cool.
BS: And it’s, it’s still one of our – if not the top selling strain, we just simply can’t keep it in stock and it’s just, you know, Chris is avid about, you know, putting out only the best products and all the strains that he has in our portfolio he’s groomed and cultivated over many years and you know those are like his children very proud of those and it speaks volumes, just given the customer response.
RS: That’s awesome. Is his dad around to see him make it in the legal part of the industry?
BG: No, unfortunately he passed away. Yeah, but I’m sure he’s looking down on him very proud.
RS: Yeah, absolutely. And I bet other family members are, yeah, it’s crazy how the wheel turns. It’s nice to be able to profit off of that turn.
RS: The first time I heard of Planet 13 was in relation to your flagship store in Vegas. I would imagine only hardened – other than hardened investors that’s in the cannabis community – that’s people’s first kind of introduction to you guys, everybody’s like, have you seen Planet 13 Store? Have you seen Planet 13 Store? It’s crazy. It’s, you know, it’s definitely a modern take on retail. How it looks that it’s not just you know, selling a product to somebody, but an experience and all the interactive and all the different moving parts and then you know, COVID comes and knocks retail on its backside.
How are – and I know that you guys, even Nevada, you know, when they shut down dispensaries, you guys turned to curbside and pivoted very quickly and successfully, but what do you see, kind of as we’re maybe Nevada goes into a new lockdown, maybe they don’t, but either way, things have definitely changed. How much are you guys navigating through that and thinking through those things?
BG: Well, we think about it every day. Obviously, the pandemic was a game changer for us. And you know, third week of March here we were marching along January, February, and into March were all record months for us. You know the town was incredibly busy. And you know, then literally we told, you know, within 24 hours, the storefronts were going to be shut, and the city was basically locking down. Yeah, that induced quite a bit of panic. We were, you know, we were no different than the rest of our competitors. It’s just how you respond to it. And obviously, we’re very concerned about our employees and keeping them employed.
We were fortunate that we were deemed an essential industry in Nevada, and all though we couldn’t operate to storefront initially, we were allowed to pivot to a delivery model initially, and then subsequent to that curbside, so it literally went, you know, from overnight to you know, running, you know, 3,000 people a day through the building to zero customers, and then, you know, converting this giant floor space or dispensary floor into a processing room to ramp up for delivery. And it was a real credit, you know to our employees.
It was difficult for everybody, but they really rose to the challenge, and, you know, really helped us implement this pivot. And, you know, we’ve now you know, fast forward, you know, six months, seven months, it’s, it’s really turned into a revenue stream, because we continue to operate delivery, and curbside, which is, you know, something we didn’t have. Curbside didn’t exist, delivery was de minimis. And, you know, here now we’ve got a very robust platform for both of those. And in addition to, you know, now being able to open the dispensary floor.
RS: And so what do you see going forward? Do you change? Is any or any of your plans or any of your thoughts about your business model do they change or you guys feel like, you know, as you say, it’s coming around and it’s even actually bringing in additional revenue stream, so you’re leaving it, basically, as it stands now?
BG: Yeah, we’re going to continue to operate. We do, look, one thing we’ve discovered in this business, you have to be flexible, and you have to be able to pivot, you know, regulations can change literally overnight. And so, you know, we always try to be proactive and anticipate what’s going to happen, but some things are just out of our control. So, you know, we’ll continue to operate under the parameters or that we’re allowed to operate under. And you know, that hasn’t really changed our longer term focus. I mean, we just, you know, now we’ve reopened the super store in Vegas.
One thing that I probably should mention to your audience is, we originally opened our dispensary under the name Medicine. And that was our original dispensary in April 2016. And then we closed that, because we had to transfer the licenses to the Planet 13 Store. We’re in the midst of reopening that store. And it’s a beautiful facility. It’s a fraction of the size of what we have here at superstore. But it really is a beautiful facility. We really built it to a high spec, and really kind of paying homage to that Las Vegas flavor and flair. That’s what it was all about.
So, we’re really encouraged to get that back open here very shortly. And then, you know, again, our plans haven’t changed with respect to California. We’re moving full steam ahead with our Orange County facility in the City of Santa Ana. So, we’re really excited about that. And you know, and even with COVID, and travel restrictions, we’re still looking at other cities as well. You know to put Planet 13 type operations in.
RS: Feeling like now is the time to strike and even as we see like Disneyland opening up and being open next to Disneyland, and how that things will eventually come back around. And now is the time to get in.
BG: Yeah, look, I’m bullish on the industry, very excited with the results we saw, you know, in the election here earlier in the week. It’s nice to see that States are legalizing both medical and recreational cannabis, particularly some of the red states. So, I’m very encouraged by that. And we’re going to continue moving ahead. You know, the pandemic is, you know, it’s brought untold suffering to, you know, to the entire country, and many other countries for that matter, but it will pass and we want to be positioned that, you know, to move forward aggressively. You know, once all the markets open up.
RS: And you mentioned the elections, you know, the kind of widespread opinion is that a Democratic controlled Senate will be more beneficial to the cannabis industry than a Republican one, but as you mentioned, we’ve seen a number of states both blue and red pass these measures, you know, wildly successful for the cannabis industry. Do you think who’s controlling the senate? Do you think it matters in the end?
BG: Well, I got to tell you, I, from my perspective it, you know, I’ve been to the dance many times, and it doesn’t, we can’t get to the next step with either of the parties. So, you know, hopefully, there’s some enlightenment back there, and we’d get some, you know, open minded people coming in. The American public is overwhelmingly supportive of legalization of marijuana, and decriminalization, for that matter. So, it’s time that these folks get on board, you know, and work together. You know, I know, the House has put out a number of bills, and very, you know, very encouraged by that, you know, only to die when they get over to the Senate side.
So, you know, I want to be optimistic, you know, hopefully, you know, with, you know, the new groups coming in, things will open up. But like I said, I’ve been here before, and it just seems at the federal level, we can’t get these folks to get serious about this. And very encouraged, you know, at the state level, of course, and there’s such a critical mass now out there, they can’t continue to ignore, and they can’t continue to ignore the will of people. And I keep telling myself that, but I hope to see a bill one day that that acknowledges that.
RS: Yeah, absolutely. We published a piece today that spoke of, you know, what other issues on the table that gets such bipartisan support other than cannabis, you know, so many people see it and agree on it. And it’s crazy that it can’t get pushed further, but here we are, nonetheless.
BG: Yeah, we’ll keep our fingers crossed. All we can do is, go up, right.
RS: Yeah, exactly. Keep our fingers crossed, but won’t hold our breath. But yeah, I think the, you know, all the metaphors work. The train has left the station. You know, it’s all happening. It’s just a matter of working out. I think the further details, but I think the essence of it is there. Something that we also have talked about recently on the podcast is, you know, real estate within the cannabis industry and they’re super successful. There’s a super, super successful REIT like IIPR, that leases real estate, to cannabis companies. There’s private ones. You guys just did a deal. You wanted to expand your cultivation, where both you and Larry will be buying the real estate and leasing it back to Planet 13. Talk to me about that strategy.
BG: Yeah, so the reason we did that was at the time, obviously, you know, we had, you know, cash allocated to other deals in the acquisition. So, we didn’t want to burn up all of our cash at that time on an acquisition in the real estate part of it, but at the same time, I didn’t want to go out into the REIT market, the rates still are, I think, you know, they’re incredibly high. The interest rates and so that just wasn’t attractive. So, you know, Larry, and I, fortunately have the wherewithal financially that we can buy that asset personally, and then we’d hold that and lease back to the company, at similar terms do we have, for other least grow operations here in town.
So, we think that that just made good sense for the company. And for us, it makes sense because, you know, it allows us to, you know, protect those margins. And, you know, look, I think the real, the REIT opportunity is a realistic opportunity, if the financing makes sense, and the terms make sense. And it was prohibitively expensive, as we were looking in the market, and it was just, it’s way beyond what we were prepared to pay. So, we went that route, and we think it made good sense. And it’s a great facility and we’ll upgrade it to, you know, to our standards, and it’ll be fantastic contributor to our product lines.
RS: And what’s your philosophy as Co-CEO and keeping cash on hand? What’s your model there?
BG: Well, I love to have cash on hand. Again, liquidity is important, particularly for opportunities, you know, it’s a very interesting industry, there are a lot of companies out there that, you know, that were marginal, you know, pre-COVID, and now with, you know, with the ramifications COVID are really struggling mightily. And so, you know, we’re looking to take advantage of those looking, you know, to buy assets and opportunities that are creative to our bottom lines.
RS: And with the entrance or the continued entrance, I should say, of institutional capital, are you guys encouraged by that? I mean, I imagine you’re encouraged by that. But does that affect your capital raising strategy at all?
BG: Well, like I said, we’ll look at any opportunity, I’m not a big fan of debt, I just, nor is, Larry, I think that’s the inherent risk there for us are just too significant. We’ve got very minimal debt on our books. I think we’ve got less than a million dollars. And, you know, and that’s, I think a lot of the companies have gotten themselves in trouble, have gotten there, because of debt facilities. They’re just too onerous, they’re too expensive. And if there’s a hiccup in the market, or the operation, you know, it could be deadly to your long-term viability.
So, you know, we’ve gone out into the market, we’ve done a couple equity raises, as you’ve seen recently, that gives us plenty of liquidity and gives us an opportunity to move forward and identify new sites and new locations, and we’re going to deploy that capital that way.
RS: Another question for, you know, strictly being a Co-CEO, what’s your definition of success? Like, you guys are doing pretty well, right now, your stock is on the rise, you’re one of the stronger companies in the industry, not yet profitable. What do you look at and say, okay, this is a benchmark that we get to that I feel like, or are there markers of success along the way that that you can point to?
BG: Well, I think all the points you alluded to, are metrics that we look at to define success. I mean, ultimately, at some point, you know, we want our shareholders to get not only value in their stock price, but ultimately at some point, we’d love to be in a position, we’re actually paying a dividend. You know, it’s all about growth. And for us, you know, we think it’ll take care of itself. As long as we manage, you know, our assets and our cash appropriately and continue to grow the company based on you know, our model, I think we’ll do exceedingly well, and that’ll translate to, you know, higher value for the investor.
RS: And that includes continuing to expand your own brands, your own cultivation further and further?
BG: Correct. Now, the cultivation side of it’s a little trickier as we move into other markets. Of course, you know, in Nevada, we’ve got three cultivation facilities. As we look to other jurisdictions, you know, some of them as you know, you’re not even allowed to be integrated, but in others, you know, we’re looking to partner with growers, and you know, maybe rent or license a portion of their facilities that are in place. So, you know, we’re kind of weighing that out now, obviously, as we move into California, but again, if an asset were to come to our attention to make a lot of sense and you know we could get it at a relative bargain, you know, we may bring in a cultivation facility.
We anticipate we will be doing production in California at some point. The other thing getting back to success, I think, for the entire industry. One of the things that will help all of us added to high tide floats all boats is getting rid of the penalties associated with 280E. But that’s an effective, you know, 21%, 22% liability right on the top. So, you know, if there’s meaningful tax reform and we can operate like other businesses, licenses, license businesses, I think the value of the shareholders is going to increase dramatically.
RS: And do you dedicate time and energy, either yourself or on your team with lobbying for that?
BG: Well we have, yeah, we’ve had lobbyists in DC, we’re constantly working to, you know, fighting for reform. We’ve partnered with some of the industry players on lobbying. We’ve obviously spent time with our delegation here. Yeah, there’s, you know, no shortage of outreach. Again, it’s just a question of getting the powers that be in Washington to get serious about this.
RS: And what’s your sense like, how much further do we have to go? What’s your sense of things?
BG: Well, you know, I, like I said, you know, I’m always optimistic. But I’m also a realist, I, every time we get close, like I said, it doesn’t matter who I am dancing with back there. Just seems like, the music stops, and you go away. And it seems that most of the bills die, you know, once they get over or all the bills die once they go to the Senate. And there has to be meaningful reform, and tied into the 280e aspect of course is in banking reform. I just think it’s outrageous that, you know, there, you force these operators, particularly smaller operators, you know, to deal with cash, you know, the volumes of cash that deal with. It’s just unsafe and it’s ridiculous. And just from an accounting standpoint, you know, for the regulatory bodies you’d want to have banking. And it’s just one of those anomalies here that we deal with constantly.
RS: And would you say it’s like a different kind of hurdle or a different block each time to the laws passing like, now, you could say, well, nobody’s dealing with anything aside from COVID. And before that, you could have said, well, there wasn’t enough social equity attached to something or what have you? Would you put it like that or would you say, there’s still a stigma attached to passing widespread legislation that benefits cannabis companies?
BG: Yeah, I think it’s the latter. I just think that there are certain members back there. And I don’t want to get into names, but there are certain members back there that are just, you know, opposed to marijuana legalization just because they’re opposed, you know, and I, you know, I can’t tell you how many legislators I’ve talked to over the years, you know, they start throwing out the gateway concept, you know, just a gateway to, you know, other illicit drug use and abuse, you know, while they’re pounding down a couple drinks, you know, And, and I just think, the hypocrisy of that, and the ignorance associated with that, you know, and it’s like, you know, just at least spend the time to educate yourself.
And, you know, I don’t know, if they’re carrying water for other industry groups that want to keep us, you know, handcuffed, I just don’t know, but it’s, there’s a lot of ignorance back there. And, unfortunately, you know, there are groups that I think have done a pretty effective job at, you know, at outreach and education. So, you know, like I said, I’m optimistic things will change. I just, I wish it would happen tomorrow. And, you know, it’s going to take a bit more time, I think.
RS: Yes, change is slow.
BG: Yeah. Particularly in Washington.
RS: Yeah. Yeah, absolutely. Like, Washington is the dog years of everyone else.
BG: Exactly. Perfect.
RS: So talk to me about where you see Planet 13, let’s say in the next 12 months, and then in the next few years.
BG: Sure. So the next 12 months we’ll have Santa Ana open, and that will be a, you know, just a magnificent facility. And we’re very proud of what we’ve done here in Vegas. You know, in fact, we’re getting ready to do an expansion here as well. But what we’re doing in Santa Ana is just from a technology standpoint, two or three levels beyond what we did hear, and it’s really designed to pay homage to the California lifestyle and that vibe. And you know, again, we’re going to, you know, draw from, you know, 6 million people in the Orange County area and the 50 plus million people that are coming in every year.
So, like Vegas, we want to create a destination there. So, you know, when you’re down there at Disneyland or Knott’s Berry Farm or shopping at the South Coast Plaza, you also have to put the Planet 13 facility on your must see attractions, while you’re there. That’s really the goal. And so, we’re going to do something that’s really special that is going to create that experience for them that, you know, they’re going to share with all their friends and family, and you know, every time they come back as a tourist, you know, we’re, you know, a must see destination. And then, you know, in the next year, you know, we hope to announce our third superstore have that announced to the market, and, you know, well on our way to getting a facility built.
And, you know, like I said, notwithstanding COVID, spent a lot of time looking at other markets, you know, throughout the country. We’re not a traditional MSO, you know, I’m not looking to open 100 stores, I’m not looking to be the Wal-Mart of marijuana, that’s not it. Our model is a bit different, although we have the medicine facility, and we’ll probably open a few of those are much smaller, they cater to locals. Our plan is really, you know, to replicate the Planet 13 experience and a handful of, you know, large metro areas in the United States. And you know, you’re familiar with all the names, but you know, we spent an inordinate amount of time in Massachusetts over the last year in Illinois, Michigan.
I spend a lot of time looking at Florida, although I want that to transition into a full rec market before we would even make an entree there, but it is very desirable on many fronts. And so, we’re going to continue to explore and you know, whether that’s through partnerships or acquisitions, we’ll see, but we’re excited to get in those communities.
RS: And do you feel like there’s space for multi-state operators and single-state operators, both to succeed, kind of within the same ecosystem or do you think single-state operators will continue to be bought up by MSOs?
BG: Well, I think there’s going to be a lot of that, you know, we’ve been approached by, you know, a number of industry players to look at a merger and acquisition sort. Yeah, whether that happens down the road, I don’t know. But I think it’s important that standalone operators have the ability to succeed. You know, everything doesn’t have to be McDonald’s. You know, there – I like some of the smaller shops. I like that they’re more nuanced. They’re, you know, they’re just – they’ve got a homey feeling. And, you know, I think there’s a role for them to play in markets throughout the country. But unfortunately, you know, given the nature of this business, you will see a gravitation towards the MSO model, and particularly for those in the public markets, you know, the investor community seems to gravitate toward the MSOs, because, you know, they’ve got, you know, they’ve got presence in multiple jurisdictions.
And, you know, I get the argument, I don’t necessarily agree with it, you know, we’re moving in other states, because we think that we have to be successful longer-term, but we’re not being dictated, you know, we don’t have a formula that says we have to have 50 stores, and we have 100 stores. That’s not our model. That’s not how we operate. You know, one thing that’s interesting in Nevada is I tell folks, when I, when I have them here, you know, this single store in Las Vegas probably does more in revenue and traffic than the next five single stores in the state. So, you know, this is about scale. This is a different type of operation. And it works for us, and we’re going to continue to roll it out.
RS: You know, it seems to me, and certainly there’s plays for smaller niche, you know, single state operators. But it seems to me, like as the industry continues to mature, and things are shaking out so much this year, in terms of companies going to the top, it seems that what you guys are doing, which is, you know, I think focusing first on one state doing that really well getting to the top of that state, and then kind of, you know, modeling that in other big states.
RS: Yeah. Would you agree with that’s kind of like been a model for success at this point?
BG: Oh, absolutely. For us, it was, you know, Larry, and I believe firmly in the model, and Chris, as well. We knew it would work; we just need to have a chance to roll it out. Find a facility large enough to allow us to grow this footprint and this dream. We knew that, you know, the old adage, you know, the old baseball movie building, they will come, we knew people would show up. And particularly in Las Vegas, you know, in the entertainment capital world. Now, it’s incumbent upon us. We’ve proven that success. Now, we’ll rolled that in other communities, and we’re very confident will have the same level of success or if not more in those markets we go into.
RS: And during the time of like, a year and a half ago, a couple years ago when all these companies were doing all these deals and expanding. Were you guys tempted or were you guys tried to, were people trying to talk you out of your strategy? Did you ever doubt or did you always feel like this is going to work out?
BG: Oh, yeah. Look, lots of people told us we were crazy. I can tell you, if I had $1 for everybody walked through here pre-opening told me, you know that Larry and I were nuts, I probably could have already retired, but that kind of reinforced our desire that we’re onto something, you know, and one of the huge players in the industry, a CEO came through. And I’m not going to say his name, but came through, very respectful the whole thing and at the end of my pitch and walking them through this grand vision, he just said to me, point blank, Bob, I don’t see it. And good luck to you.
So, he made a parting comment as someone leaving the facility said, yeah, in six months, this will be a barbecue facility. And we kind of laugh about that, Larry and I do now because we do have a wonderful restaurant in [indiscernible] restaurant, but if they didn’t see the vision, then I didn’t expect them to get it. And a lot of them now have come back. In fact, this individual has come back to me and said, hey, I got to give you credit. I called that one wrong.
And so, we know it works. And, you know, we’re always, you know, that’s one thing Larry and I are very comfortable about is, you know, the experiential component, drawing people to the facility, and giving them, you know just a fantastic experience, and a lot of other people don’t focus on that. And one of the other things that we knew, the night we opened our first dispensary medicine, after everybody left, we had a beautiful Las Vegas style grand opening and hundreds and hundreds of people. And Larry and I sat back and recapped a bit. And the one thing we realized it was deficient to two very significant respects. It was too far away from the strip, and it wasn’t big enough.
And so, we immediately started looking for locations that would be closer to the tourists customer, and yet convenient to the locals to shop, and to provide that experience. And that’s how we landed on the Planet 13 location.
RS: It sounds like there’s a lot of synergy between you and Larry, and I would imagine it’s not simple being Co-CEOs, but it sounds like you guys are really – the way that you talk about him, it sounds like it works for you. Did you know that, right when you met him that it would be successful?
BG: Well, that’s funny. Let me fast forward a bit. I met Larry many years ago. We actually sat at City Council together City Anderson, and we were archenemies for about a year. I mean, arch enemies. If I said it was green, he’d say it was blue. If I said, you know, that’s just how it was, but then we realized, after, you know, I was the newcomer, he was the old guard, you know and started realizing that, you know, I really admired this guy, because, you know, when he was putting the knife in me, he was making eye contact. And I thought who does that? I mean, nobody wants to put their fingerprints on anything, I thought, I really admire this guy.
And so we, you know, we developed a really good relationship on the Council. And then when he left, and I left, you know, I started representing his companies for many years, and then Larry was doing a lot of land work over the years. And I, you know, I started representing him on deals. And then I started taking equity positions in those deals. And, you know, here we are today. So, you know, we’ve been together for 20, over 25 years. And it’s, look, I couldn’t ask for a better partner and a better Co-CEO, and same with Chris, but you know, we go way back.
A lot of people that know us really well, they talk to us, so they like we’re an old married couple, because we don’t always agree on everything, you know, we will speak our mind. But at the end of the day, I’ve got a great deal of respect for him. And I think he does for me, as well. And it’s really turned out to be, you know, something that, you know, a dream come true for us.
RS: How great, how great, that’s lovely. That’s great. Well, Bob, the last question I want to ask you is, when you talk to investors and investors are looking at the landscape, I imagine a lot of investors are very excited right now, but there has been volatility, and I imagine there will continue to be some volatility into the near future, if not even longer than that. When you talk to investors, what do you talk to them about in terms of the cannabis landscape and Planet 13?
BG: Well, as an investor coming into the market, you know, as I tell people all the time, look, particularly with new companies, do your homework, you know, get a sense of who you’re buying into, you know, get a sense of what they’re all about, what their vision, what their goals are, and then start looking at, you know, at success, and you know, whether they’re, performing. You know, it’s one thing to go out to the market and say you’re going to do A, B, and C, it’s another thing to actually follow through on that.
So, you know, look at – fortunately for public companies, you can go in and take a look at our financials, and you can look at our media announcements, and you can gauge us, and I just tell people, you know, with respect to my company, judge us by our performance. You know, it talk’s cheap, anybody can talk. You know, it’s a question of, you know, performance. At the end of the day, you know, are they, you know, are they good stewards of capital? You know, and do we and other operators, do we treat that money as though our own? And are we careful on how we spend it? And are we spending in a way that’s going to generate additional revenue and growth for the company?
I think that’s keenly important. The market’s volatile, as you said, things go up, things go down. There could be tremendous movements in a day. And as a retail investor, particular, I say, be patient. I mean, look, things aren’t, you’re not going to get 100% increase overnight, or in a month or three months, be patient. I think the industry is going to mature and evolve. And I think if you’re steady, and you’ve identified companies that make sense for you, stay with that horse. I think it’s going to pay big dividends for you in the long-run.
RS: Yes, I echo all the points. Things that we like to talk about on the podcast, all those factors. Bob, anything you would like to leave listeners with before we go.
BG: No, I just, like I say, you can look at us online. And, you know, we’ve got a current deck posted, but I tell people all the time, pictures just don’t do justice to this facility. So, if you’re interested in us, as an investor, I encourage you to come to Vegas and look at the facility in person and spend some time here and get a sense of what this is really all about, because it’s special. There’s nothing like it in the cannabis space. And as we move into Santa Ana, it’s just going to be a whole new level and it’s exciting. I think this is a fantastic industry. And I think there’s a lot of upside for everybody.
RS: Yeah, you know, I haven’t been to your store and I’m excited to be able to go see one when I do. So, yeah, it’s an exciting model. And it’s exciting to see how it plays out. I hope that you join us again as the year progresses into next year and we have more things to talk about. But Bob, this has been a real pleasure. I really appreciate you taking the time.
BG: Thanks Rena. Have a great day. And thanks, everybody.