Planet 13 Holdings reported second-quarter 2026 revenue of $22.9 million, down 14.9% from a year earlier, as the multi-state operator absorbed the fallout from exiting California retail and wholesale operations while continued price compression squeezed Nevada and Florida sales. Yet gross margin climbed to 53.9% from 43.4%, and net loss narrowed to $5.6 million from $13.3 million, suggesting a company trimming itself down before a planned merger with Vireo Growth Inc. closes.
A Smaller Footprint, A Tighter Cost Structure
The topline decline is not a mystery. California's regulated cannabis market has been brutal for years, marked by heavy taxation, an illicit market that undercuts licensed retailers on price, and wholesale margins that make vertical integration a losing bet for smaller footprints. Planet 13's exit from that state removed a revenue stream, but it also removed a drag on gross margin. Strip out California and apply company-wide procurement initiatives, and the math starts working differently. Total expenses fell 17.7% to $15.2 million, and Adjusted EBITDA loss shrank to $0.5 million from $2.4 million. That's the story here: less revenue, but a business that loses far less money doing it.
Worth flagging separately: a $1.0 million reduction in the company's inventory reserve for Florida distillate, tied to increased Florida sales working down excess stock on hand. Strip that adjustment out and gross margin sits at 49.5%, still a meaningful improvement year over year. Inventory reserves like this matter to operators tracking SKU-level performance and budroom turnover; a bloated reserve on a single product category can distort margin reporting until sales catch up with production.
Florida's Rebound and What It Signals
Florida revenue rose 17.1% quarter over quarter, and Planet 13 continues to build out infrastructure there, including OMMU approval for a BHO extraction facility and an upcoming Sarasota store. Florida remains a medical-only market with strict Office of Medical Marijuana Use oversight, and any operator expanding extraction capacity there is making a bet that patient demand and processing efficiency will offset the state's tighter regulatory framework compared to adult-use markets. For wholesalers and brands watching Florida, sequential growth after a period of price compression is the kind of data point that matters more than year-over-year comparisons distorted by market entry timing.
The Merger Overshadows the Quarter
Co-CEO Bob Groesbeck was direct about the underlying pressure driving the Vireo Growth transaction: scale, purchasing power, distribution reach, and balance sheet depth increasingly determine who survives sustained price compression in maturing cannabis markets. That's not a controversial read of the industry. Multi-state operators without the capital to weather margin erosion are consolidating or exiting, and Planet 13's own California withdrawal is a small-scale preview of that dynamic. The company opted not to hold an earnings call this quarter, citing the pending merger, a common move when management wants to avoid forward-looking commentary that could complicate deal terms or trigger disclosure obligations.
For dispensary operators and investors watching from outside this specific deal, the takeaway is broader than one company's balance sheet. Total liabilities rose to $105.5 million from $101.2 million even as total assets declined to $144.3 million, a combination that tightens the runway for standalone operators facing 280E tax burdens, compliance costs, and thinning wholesale margins. Consolidation of this kind reshapes vendor relationships, wholesale menus, and even landlord negotiations across the markets where combined entities operate, and it is worth watching closely as more mid-size operators weigh similar paths.
