Cannabis leader comes to Florida confident recreational use is coming
Las Vegas-based Planet 13, a multi-state cannabis company, has signed a deal to acquire Florida-based VidaCann to speed up expansion in the medical marijuana market in the state.
Two of VidaCann’s 26 stores in Florida are in Bonita Springs and Cape Coral, according to the company’s website.
Planet 13 is purchasing VidaCann for $48.9 million in cash, stocks and promissory notes. Closing is expected the first quarter of 2024.
VidaCann is the ninth largest cannabis dispensary network in Florida and has developed a reputation for high quality products and good customer service, Larry Scheffler, co-chief executive officer of Planet 13, said in a news release.
The Florida company cultivates, processes, stores, transports and dispenses cannabis products, along with running fulfillment and storage centers.
Planet 13 operates three dispensaries in Nevada and California with one opening shortly in Illinois, along with leasing four dispensaries in Florida.
"Acquiring VidaCann would significantly accelerate our time to market and, more importantly, scale in Florida,” Scheffler said.
Planet 13 is a publicly traded company that reported total assets valued at $223 million and liabilities of $40.5 million, according to financial reports for the second quarter of 2023.
The company reported revenue of $26 million for the second quarter, a dip from $28 million in revenue for the same period in 2022. It cited as a cause a decline in the price of cannabis in Nevada.
Planet 13 reported a net loss of $4.3 million in the second quarter, according to the financials.
Big business in Florida?
Florida could join 23 other states in the not-so-distant future that have legalized recreational marijuana which would open a new door in Florida. The industry’s already seen explosive growth with medical use.
If it doesn’t happen in 2024, recreational use will become legal at some point in Florida, said Planet 13 spokesman David Farris, who serves as vice president of sales and marketing.
Besides acquiring VidaCann, Planet 13 is opening four stores in Florida for medical marijuana products.
The company was coming into the state for the medical marijuana market and will be positioned when the recreational market opens, Farris said.
State economists project recreational marijuana will have an initial value of a $1.7 billion with a customer base of 1.4 million people, according to figures by the Florida Financial Impact Estimating Conference in July.
State and local sales tax revenue would be between $195 million to $431 million, according to the projections.
MJBizDaily, a Colorado-based news outlet for the recreational and medical cannabis industry, estimates Florida’s medical cannabis market alone will grow from $1.75 billion this year to $2.4 billion by 2026.
What becomes of VidaCann?
VidaCann’s management and operational staff, which total about 400 employees in the state, will join the ranks of Planet 13, Farris said.
“It is not to clean house,” he said. “We work well with them.”
VidaCann's senior vice president of product development, Mark Ascik Jr., said a major factor that went into the deal was retention of its workforce by Planet 13.
All Florida employees are expected to remain under the new partnership, he said in an email.
When asked why VidaCann is selling, Ascik said: "Planet 13 shares in our values of operational efficiency, profitability, customer service, and product quality. In short, it’s the perfect marriage and we believe the combined companies will enjoy a stronger market position."
Ascik said VidaCann was approached by Planet 13 to partner and leverage its expertise in Florida.
"They are innovators in the cannabis space and we are excited about the opportunity this deal presents for us all," Ascik said.
"Planet 13 is a leader in the adult-use cannabis markets, as evidenced by their one-of-a-kind presence in Nevada and California," he added. " As Florida looks to recreational sales in the future, we are confident that we are positioned for success with our combined expertise with Planet 13. "
The expectation is creating 50 to 80 more jobs in the next year with the opening of the four Planet 13 stores, Farris, of Planet 13, said.
The locations are Orange Park, Ocala, Port Richey, and the location of the fourth store has not been disclosed yet.
At its flagship campus in Las Vegas, Planet 13 has an entertainment center that includes a restaurant, bar, superstore and other consumer-focused amenities that potentially could be replicated in a metropolitan area like Miami, Farris said.
Farris said acquiring VidaCann is a “springboard” toward adding more stores, in part because of VidaCann’s large cultivating facility which can supply almost 60 stores.
Planet 13 will bring its products to Florida.
"We are excited to bring Planet 13's retail and product brands to Florida consumers after the closing of the proposed transaction, especially with the possibility of upcoming adult-use legislation,” Scheffler, co-CEO, said in the news release.
What about recreational use?
Florida voters legalized medical marijuana by 71 % of the vote in 2016.
More than 842,500 Florida residents have active cards for medical marijuana use and 587 dispensaries operate statewide, according to the state’s Office of Medical Marijuana Use within the state Department of Health.
The recreational use initiative gained the 891,523 signatures from citizens to get on the 2024 ballot but it faces opposition from Florida Attorney General Ashley Moody. The state attorney general says the ballot language is misleading.
The state Supreme Court must issue an opinion by April 1 in order for it to be on the ballot.
If it gets to voters and is passed, anyone 21 and older can use and possess up to three ounces of marijuana.
Trulieve, a major medical marijuana dispensary in the state, has contributed the $39 million raised so for by Smart & Safe Florida for the initiative, records show.