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Item 1. Business

2024-03-13 compared with 2023-03-23 · 264 added, 349 removed, 576 unchanged (52% of the section changed)

We are a vertically integrated cultivator and provider of cannabis and cannabis-infused products in the States of Nevada and California.

In addition to these operational cannabis licenses, we hold licenses and are developing operations in Florida and Illinois.

Our common shares are listed for trading on the Canadian Securities Exchange (“

CSE ”) under the symbol “PLTH”

and quoted on the OTCQX in the United States under the symbol “PLNHF.”

We are a vertically integrated cultivator and provider of cannabis and cannabis-infused products in the States of Nevada and California, with retail cannabis operations in Illinois.

In addition to these operational cannabis licenses, we hold a license and are developing operations in Florida.

Our common stock is listed for trading on the Canadian Securities Exchange (“ CSE ”) under the symbol “PLTH” and quoted on the OTCQX in the United States under the symbol “PLNH.”

Through our subsidiaries in Nevada, we hold six licenses for cultivation (three medical licenses and three adult-use licenses), six licenses for production (three medical licenses and three adult-use licenses), three dispensary licenses (one medical license and two adult-use licenses) and one distribution license.

Additionally, in California, through Newtonian Principles, Inc.

Newtonian ”), a wholly-owned subsidiary of ours located in Santa Ana, California, we hold one dispensary license and one distribution license.

On March 2, 2022, we acquired through a plan of arrangement, and then amalgamated with, Next Green Wave Holdings Inc.

NGW ”).

NGW was a Canada-based seed to sale cannabis company, which provided products and services to the cannabis industry in the State of California.

2022 Acquisition of Next Green Wave Holdings Inc.

With the California subsidiaries obtained from our acquisition of NGW, we received two licenses for adult-use cultivation, one cultivation adult-use nursery license, one cultivation medical license, one adult-use and medical distribution license, one adult-use and medical manufacturer Type P license, and a pending application for a cultivation processor license.

Shortly after acquiring NGW, we initiated a series of updates and consolidations of NGW licenses, resulting in upgrading the Type P license to a Type 6 manufacturing license, and consolidating the various cultivation licenses into a medium cultivation license. 

Pursuant to the consolidation, on February 27, 2023, we further requested to relinquish our nursery and processor licenses, as those are redundant under the medium cultivation license.

On July 1, 2022, we acquired a 23-acre parcel of real property, inclusive of a 10,500 square foot building, near Ocala, Florida which is currently authorized to cultivate, process, and dispense medical marijuana.

We are in the process of developing our operational plans and continue to select dispensing locations across Florida which we expect to supply from the Ocala cultivation and processing location.

On July 22, 2022, we received the previously awarded Conditional Adult Use Dispensing Organization License in the Chicago-Naperville-Elgin region and intend to open a dispensary in Waukegan, a suburb of Chicago, by mid to late 2023.

Additionally, in California, our subsidiaries hold one adult-use cultivation license, one adult-use and medicinal manufacturing license, two adult-use and medicinal distribution licenses, one adult-use and medicinal dispensary license, and one event organizer license.

In Illinois, our subsidiary holds one adult-use dispensing license.

We currently sell over 123 different strains of cannabis (up to 35 of which are grown in-house) and have a customer-loyalty database of over 385,000 customers.

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Illinois license holding company;

cannabis retail sales

Planet 13 Florida, Inc.

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cannabis cultivation and processing

Our registered office is located at Bentall 5, 550 Burrard Street, Suite 2501, Vancouver, BC V6C 285, and our head office is located at 2548 West Desert Inn Road, Suite 100, Las Vegas, Nevada 89109.

Planet 13 Real Prop, LLC

Holding company

Planet 13 Lifestyles LLC

Retail sales of apparel and accessories

Our registered head office is located at 2548 West Desert Inn Road, Suite 100, Las Vegas, Nevada 89109.

History of the Company

We were incorporated under the Canada Business Corporations Act (“

CBCA ”) on April 26, 2002 under the name “High Income Preferred Shares Corporation.”

On October 18, 2010, Wombat Investment Trust acquired control of us and on January 1, 2011, we changed our name to “Carpincho Capital Corp.”

Carpincho ”).

We were incorporated under the Canada Business Corporations Act (“ CBCA ”) on April 26, 2002 under the name “High Income Preferred Shares Corporation.” On October 18, 2010, Wombat Investment Trust acquired control of us and on January 1, 2011, we changed our name to “Carpincho Capital Corp.” (“ Carpincho ”).

MM Development Company, Inc.

MMDC ”), now one of our wholly owned subsidiaries, was formed on March 20, 2014 as a Nevada limited liability company under the name MM Development Company, LLC (“

MMDC LLC ”) with the mission to provide compassionate, dignified and affordable access to cannabis, cannabis concentrates and cannabis-infused products to approved customers in the State of Nevada.

(“ MMDC ”), now one of our wholly owned subsidiaries, was formed on March 20, 2014 as a Nevada limited liability company under the name MM Development Company, LLC (“ MMDC LLC ”) with the mission to provide compassionate, dignified and affordable access to cannabis, cannabis concentrates and cannabis-infused products to approved customers in the State of Nevada.

MMDC LLC underwent a statutory conversion to a Nevada corporation and became MMDC on March 14, 2018.

On June 11, 2018, MMDC completed a reverse-takeover (“

Business Combination ”) transaction of Carpincho and filed Articles of Amendment to effect (i) a consolidation of its share capital on a 0.875 (new) for one (1) old basis;

(ii) a name change from “Carpincho Capital Corp.”

to “Planet 13 Holdings Inc.”;

and (iii) the creation of a new class of convertible, class A restricted voting shares (the “

Restricted Voting Shares ”).

The Restricted Voting Shares were convertible into common shares of the Company (the “

Common Shares ”) at the option of the holders on a share-for-share basis.

On May 31, 2018, the Nevada State Department of Taxation (“

DOT ”), the agency which regulated cannabis operations in Nevada, approved the transfer of MMDC’s cultivation production and dispensary licenses to us.

On June 26, 2019, we continued out of the jurisdiction of Canada under the CBCA into the jurisdiction of the Province of British Columbia under the Business Corporations Act (British Columbia) (“

BCBCA ”).

On June 11, 2018, MMDC completed a reverse-takeover (“ RTO ” or “ Business Combination ”) transaction of Carpincho and filed Articles of Amendment to effect (i) a consolidation of its share capital on a 0.875 (new) for one (1) old basis; (ii) a name change from “Carpincho Capital Corp.” to “Planet 13 Holdings Inc.”; and (iii) the creation of a new class of convertible, class A restricted voting shares (the “ Restricted Voting Shares ”).

The Restricted Voting Shares were convertible into common shares of the Company (the “ Common Shares ”) at the option of the holders on a share-for-share basis.

On May 31, 2018, the Nevada State Department of Taxation (“ DOT ”), the agency which regulated cannabis operations in Nevada, approved the transfer of MMDC’s cultivation production and dispensary licenses to us.

On June 26, 2019, we continued out of the jurisdiction of Canada under the CBCA into the jurisdiction of the Province of British Columbia under the Business Corporations Act (British Columbia) (“ BCBCA ”).

On August 12, 2019, our wholly-owned subsidiary 10653918 Canada Inc.

Finco ”) was continued out of the jurisdiction of Canada under the CBCA into the jurisdiction of the Province of British Columbia under the BCBCA and on September 24, 2019, we completed a short-form vertical amalgamation with Finco (the “

Short Form Amalgamation ”).

(“ Finco ”) was continued out of the jurisdiction of Canada under the CBCA into the jurisdiction of the Province of British Columbia under the BCBCA and on September 24, 2019, we completed a short-form vertical amalgamation with Finco (the “ Short Form Amalgamation ”).

The Short Form Amalgamation was undertaken to simplify our corporate structure and to obtain certain administrative and financial reporting efficiencies.

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April-May 2018 Subscription Receipt Offering

Over the course of three tranches on April 26, May 18 and May 23, 2018, Finco completed private placements of subscription receipts (the “

Subscription Receipts ”) at a price of C$0.80 per Subscription Receipt for aggregate gross proceeds of approximately C$25,100,000 (the “

Subscription Receipt Offering ”), the brokered portion of which was conducted by a syndicate of agents co-led by Beacon Securities Limited and Canaccord Genuity Corp.

Over the course of three tranches on April 26, May 18 and May 23, 2018, Finco completed private placements of subscription receipts (the “ Subscription Receipts ”) at a price of C$0.80 per Subscription Receipt for aggregate gross proceeds of approximately C$25,100,000 (the “ Subscription Receipt Offering ”), the brokered portion of which was conducted by a syndicate of agents co-led by Beacon Securities Limited and Canaccord Genuity Corp.

and including Haywood Securities Inc.

(collectively, the “

Agents ”).

(collectively, the “ Agents ”).

The proceeds from the Subscription Receipt Offering, less certain expenses, were placed into escrow on completion of the Subscription Receipt Offering.

Common Share Warrants ”), respectively, and the escrowed proceeds from the Subscription Receipt Offering, less the commission of the Agents and certain fees and expenses, were released from escrow to us.

In connection with the completion of the Business Combination, the Subscription Receipts were converted on a one-for-one basis into a total of 31,458,300 common shares of Finco and 15,729,150 common share purchase warrants of Finco, which upon completion of the acquisition of Finco by us were exchanged for an equal number of Common Shares and Common Share purchase warrants (the “ Common Share Warrants ”), respectively, and the escrowed proceeds from the Subscription Receipt Offering, less the commission of the Agents and certain fees and expenses, were released from escrow to us.

Each Common Share Warrant may be exercised for one Common Share at an exercise price of C$1.40 for a period of 24 months from the date of issue.

In consideration for services rendered, the Agents were paid a cash commission equal to 6% of the gross proceeds of the Subscription Receipt Offering and issued 1,485,645 compensation warrants (the “

Compensation Warrants ”).

Each Compensation Warrant entitled the holder thereof to purchase one Common Share at an exercise price of C$0.80 until June 11, 2020.

December 2018 Bought Deal Offering

On December 4, 2018, we issued 8,735,250 units (each, a “

Unit ”) at a price of C$3.00 per Unit and 425,000 Common Share Warrants (the “

Over-Allotment Warrants ”) for a price of C$0.44 per Over-Allotment Warrant for aggregate gross proceeds of C$26,392,750 pursuant to a bought deal offering (the “

2018 Bought Deal Offering ”).

On December 4, 2018, we issued 8,735,250 units (each, a “ Unit ”) at a price of C$3.00 per Unit and 425,000 Common Share Warrants (the “ Over-Allotment Warrants ”) for a price of C$0.44 per Over-Allotment Warrant for aggregate gross proceeds of C$26,392,750 pursuant to a bought deal offering (the “ 2018 Bought Deal Offering ”).

The 2018 Bought Deal Offering was led by Beacon Securities Limited and included Canaccord Genuity Corp and Cormark Securities Inc.

(collectively, the “

2018 Bought Deal Underwriters ”).

Each Unit was comprised of one Common Share and one-half of one Common Share purchase warrant (each whole warrant, a “

Unit Warrant ”

and, together with the Over-Allotment Warrants, the “

2018 Bought Deal Warrants ”).

(collectively, the “ 2018 Bought Deal Underwriters ”).

Each Unit was comprised of one Common Share and one-half of one Common Share purchase warrant (each whole warrant, a “ Unit Warrant ” and, together with the Over-Allotment Warrants, the “ 2018 Bought Deal Warrants ”).

Each 2018 Bought Deal Warrant entitled the holder to purchase one Common Share at an exercise price of C$3.75 for a period of 36 months following the closing of the 2018 Bought Deal Offering unless earlier accelerated by us pursuant to the terms thereof.

On December 23, 2020, we announced that we had elected to accelerate the expiry date of the outstanding 2018 Bought Deal Warrants to January 28, 2021.

As consideration for services rendered, the 2018 Bought Deal Underwriters were paid a cash commission equal to 6.0% of the gross proceeds of the 2018 Bought Deal Offering and issued compensation options equal to 6% of the number of Units and Over-Allotment Warrants sold (the “

Compensation Options ”).

Each Compensation Option entitled the holder thereof to purchase one Common Share at an exercise price of C$3.00 for a period of 24 months following the closing of the 2018 Bought Deal Offering.

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May 2020 Santa Ana Acquisition

On May 20, 2020, we acquired all of the issued and outstanding common stock (the “

Newtonian Shares ”) of Newtonian Principles Inc.

Newtonian ”) (the “

Santa Ana Acquisition ”), resulting in our acquiring a provisional adult-use cannabis retailer license issued by the State of California Bureau of Cannabis Control (the “

California License ”) and a regulatory safety permit issued by the City of Santa Ana (the “

Santa Ana Permit ”), which were both held by Newtonian, and a 30-year lease for a dispensary in Santa Ana, California (the “

Santa Ana Premises ”) along with certain other assets (collectively, the “

Warner Assets ”) from Warner Management Group, LLC (“

Warner ”).

On May 20, 2020, we acquired all of the issued and outstanding common stock (the “ Newtonian Shares ”) of Newtonian Principles Inc.

(“ Newtonian ”) (the “ Santa Ana Acquisition ”), resulting in our acquiring a provisional adult-use cannabis retailer license issued by the State of California Bureau of Cannabis Control (the “ California License ”) and a regulatory safety permit issued by the City of Santa Ana (the “ Santa Ana Permit ”), which were both held by Newtonian, and a 30-year lease for a dispensary in Santa Ana, California (the “ Santa Ana Premises ”) along with certain other assets (collectively, the “ Warner Assets ”) from Warner Management Group, LLC (“ Warner ”).

Newtonian had no operations at the time of the Santa Ana Acquisition.

We issued 3,940,932 Restricted Voting Shares (the “

Santa Ana Consideration Shares ”), representing an agreed value of US$4,000,000, to certain vendors in consideration for the Newtonian Shares, and paid Warner US$1,000,000 in cash and cancelled an interim buildout loan to Warner in consideration for the Warner Assets. 

We issued 3,940,932 Restricted Voting Shares (the “ Santa Ana Consideration Shares ”), representing an agreed value of US$4,000,000, to certain vendors in consideration for the Newtonian Shares, and paid Warner US$1,000,000 in cash and cancelled an interim buildout loan to Warner in consideration for the Warner Assets.

The Santa Ana Consideration Shares were subject to a four-month and one day hold period under Canadian securities laws and were subject to a lock-up whereby 1/8 of the Santa Ana Consideration Shares were released from lock-up each month beginning on September 22, 2020.

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On June 18, 2021, Newtonian received both a Commercial Cannabis Adult-Use Retail Sales and a Commercial Cannabis Distribution Regulatory Safety Permit Phase 2 approval from the City of Santa Ana, and on June 21, 2021, received a California Adult-Use and Medicinal Distributor License.

In mid-June 2021, we completed the build-out of approximately 25,600 square feet of retail space on Warner Boulevard in the City of Santa Ana located in Orange County (the “

Planet 13 OC Superstore ”) and co-located distribution facility, and opened for California State and City of Santa Ana licensed cannabis sales and distribution starting July 1, 2021. 

In mid-June 2021, we completed the build-out of approximately 25,600 square feet of retail space on Warner Boulevard in the City of Santa Ana located in Orange County (the “ Planet 13 OC Superstore ”) and co-located distribution facility, and opened for California State and City of Santa Ana licensed cannabis sales and distribution starting July 1, 2021.

July 2020 WCDN Acquisition

On July 17, 2020, we entered into an asset purchase agreement (the “

WCDN Asset Acquisition Agreement ”) with West Coast Development Nevada, LLC (“

WCDN ”), W The Brand, LLC, and R.

WCDN Acquisition Facility ”), which has the ability to expand to 45,000 square feet (the “

WCDN Acquisition ”).

WCDN Consideration Shares ”) based on a 10-day volume weighted average price of the Common Shares as of the close of trading on July 16, 2020) for the operating assets and licenses.

On July 17, 2020, we entered into an asset purchase agreement (the “ WCDN Asset Acquisition Agreement ”) with West Coast Development Nevada, LLC (“ WCDN ”), W The Brand, LLC, and R.

Scott Coffman, pursuant to which we, through MMDC, acquired cannabis inventory, equipment and tenant improvements located in a 25,000 square feet facility at 4801 West Bell Drive, Las Vegas, Nevada 89118 (the “ WCDN Acquisition Facility ”), which has the ability to expand to 45,000 square feet (the “ WCDN Acquisition ”).

The purchase price for the asset purchase was US$4.1 million and consisted of US$1,156,000 in cash for the inventory and US$3,000,000 million (US$500,000 cash and US$2,500,000 of Common Shares, resulting in the issuance of 1,374,833 Common Shares (the “ WCDN Consideration Shares ”) based on a 10-day volume weighted average price of the Common Shares as of the close of trading on July 16, 2020) for the operating assets and licenses.

The WCDN Consideration Shares were held in escrow until the Second Closing (as defined herein).

The WCDN Acquisition allowed us to solidify our vertical integration in Nevada.

The privileged licenses included medical and adult-use cultivation and production licenses in unincorporated Clark County, and these licenses were transferred to our existing Nevada subsidiary, MMDC, to be operated on the same terms and subject to the same oversight provided at MMDC’s current production and cultivation operations in unincorporated Clark County, Nevada.   

The transaction was scheduled to close in two parts, the first closing being cash transferred for the equipment and cannabis inventory which occurred on July 17, 2020, and the second closing (the “

Second Closing ”) being contingent on the approval to transfer the license and receipt of the cultivation and production licenses from the State of Nevada’s Cannabis Compliance Board (the “

CCB ”).

The transaction was scheduled to close in two parts, the first closing being cash transferred for the equipment and cannabis inventory which occurred on July 17, 2020, and the second closing (the “ Second Closing ”) being contingent on the approval to transfer the license and receipt of the cultivation and production licenses from the State of Nevada’s Cannabis Compliance Board (the “ CCB ”).

On August 25, 2020, the CCB conditionally approved the transfer of the cultivation and production licenses to MMDC, and on September 3, 2020, MMDC received the cultivation and production licenses pursuant to a letter from the CCB and certificates issued on November 3, 2020.

Pursuant to the WCDN Acquisition, MMDC also received a conditional distribution license which it did not place into operation and later sold on January 6, 2023.

Clark County Business License ”) was a necessary condition precedent to the Second Closing.

On September 11, 2020, we mutually agreed with WCDN that the receipt by MMDC of a business license issued by unincorporated Clark County which would permit us to conduct business in Clark County (the “ Clark County Business License ”) was a necessary condition precedent to the Second Closing.

MMDC received the Clark County Business License and subsequently completed the Second Closing on November 27, 2020, at which time WCDN Consideration Shares were released from escrow to WCDN.

Concurrent with the first closing of the WCDN Acquisition, RX Land, LLC (“

RX Land ”), an entity owned by Robert Groesbeck and Larry Scheffler (our co-chief executive officers, collectively the “

Co-CEOs ”

and each a “

Co-CEO ”), acquired the WCDN Acquisition Facility for US$3.3 million and entered into a lease agreement with WCDN in respect of such facility (the “

Initial West Bell Lease ”).

Concurrent with the first closing of the WCDN Acquisition, RX Land, LLC (“ RX Land ”), an entity owned by Robert Groesbeck and Larry Scheffler (our co-chief executive officers, collectively the “ Co-CEOs ” and each a “ Co-CEO ”), acquired the WCDN Acquisition Facility for US$3.3 million and entered into a lease agreement with WCDN in respect of such facility (the “ Initial West Bell Lease ”).

In accordance with the terms of the WCDN Asset Acquisition Agreement and approvals by our independent directors, WCDN assigned the Initial West Bell Lease to MMDC on November 25, 2020, and MMDC subsequently entered into an amending agreement with RX Land on November 27, 2020, to amend certain terms of such lease agreement including increasing the lease payments, extending the duration of the lease and, if desired, allowing for second floor installation by MMDC without a corresponding lease rate increase due to an increase in facility size.

July 2020 Bought Deal Offering

On July 3, 2020, we completed bought deal financing for aggregate gross proceeds of C$11,521,850 (the “

July 2020 Bought Deal ”) pursuant to which an aggregate of 5,359,000 units (each, a “

July 2020 Bought Deal Unit ”) of the Company were sold at a price of C$2.15 per July 2020 Bought Deal Unit.

Each July 2020 Bought Unit consisted of one Common Share and one-half (1/2) of one Common Share purchase warrant (each whole warrant, a “

July 2020 Bought Deal Warrant ”).

On July 3, 2020, we completed bought deal financing for aggregate gross proceeds of C$11,521,850 (the “ July 2020 Bought Deal ”) pursuant to which an aggregate of 5,359,000 units (each, a “ July 2020 Bought Deal Unit ”) of the Company were sold at a price of C$2.15 per July 2020 Bought Deal Unit.

Each July 2020 Bought Unit consisted of one Common Share and one-half (1/2) of one Common Share purchase warrant (each whole warrant, a “ July 2020 Bought Deal Warrant ”).

Each July 2020 Bought Deal Warrant entitles the holder thereof to acquire one Common Share at an exercise price of C$2.85 per Common Share until July 3, 2022.

The underwriters received a cash commission equal to 6.0% of the gross proceeds from the sale of the July 2020 Bought Deal Units.

The underwriters also received compensation options (each a “

July 2020 Bought Deal Compensation Option ”) equal to 6.0% of the number of July 2020 Bought Deal Units sold.

The underwriters also received compensation options (each a “ July 2020 Bought Deal Compensation Option ”) equal to 6.0% of the number of July 2020 Bought Deal Units sold.

Each July 2020 Bought Deal Compensation Option entitles the underwriters to purchase one Common Share at a price of C$2.15 until July 3, 2022.

September 2020 Bought Deal Offering

On September 10, 2020, we completed our previously announced bought deal financing for aggregate gross proceeds of C$23,019,550 (the “

September 2020 Bought Deal ”) pursuant to which an aggregate of 6,221,500 units (each, a “

September 2020 Bought Deal Unit ”) of the Company were sold at a price of C$3.70 per September 2020 Bought Deal Unit.

Each September 2020 Bought Unit consisted of one Common Share and one-half (1/2) of one Common Share purchase warrant (each whole warrant, a “

September 2020 Bought Deal Warrant ”).

On September 10, 2020, we completed our previously announced bought deal financing for aggregate gross proceeds of C$23,019,550 (the “ September 2020 Bought Deal ”) pursuant to which an aggregate of 6,221,500 units (each, a “ September 2020 Bought Deal Unit ”) of the Company were sold at a price of C$3.70 per September 2020 Bought Deal Unit.

Each September 2020 Bought Unit consisted of one Common Share and one-half (1/2) of one Common Share purchase warrant (each whole warrant, a “ September 2020 Bought Deal Warrant ”).

Each September 2020 Bought Deal Warrant entitles the holder thereof to acquire one Common Share at an exercise price of C$5.00 per Common Share until September 10, 2022.

The underwriters received a cash commission equal to 6.0% of the gross proceeds from the sale of the September 2020 Bought Deal Units.

The underwriters also received compensation options (each a “

September 2020 Bought Deal Compensation Option ”) equal to 6.0% of the number of September 2020 Bought Deal Units sold.

The underwriters also received compensation options (each a “ September 2020 Bought Deal Compensation Option ”) equal to 6.0% of the number of September 2020 Bought Deal Units sold.

Each September 2020 Bought Deal Compensation Option entitles the underwriters to purchase one Common Share at a price of C$3.70 until September 10, 2022.

November 2020 Bought Deal Offering

On November 5, 2020, we completed our previously announced bought deal financing for aggregate gross proceeds of C$28,604,625 (the “

November 2020 Bought Deal ”) pursuant to which an aggregate of 6,698,750 units (each, a “

November 2020 Bought Deal Unit ”) of the Company were sold at a price of C$4.30 per November 2020 Bought Deal Unit.

Each November 2020 Bought Unit consisted of one Common Share and one-half (1/2) of one Common Share purchase warrant (each whole warrant, a “

November 2020 Bought Deal Warrant ”).

On November 5, 2020, we completed our previously announced bought deal financing for aggregate gross proceeds of C$28,604,625 (the “ November 2020 Bought Deal ”) pursuant to which an aggregate of 6,698,750 units (each, a “ November 2020 Bought Deal Unit ”) of the Company were sold at a price of C$4.30 per November 2020 Bought Deal Unit.

Each November 2020 Bought Unit consisted of one Common Share and one-half (1/2) of one Common Share purchase warrant (each whole warrant, a “ November 2020 Bought Deal Warrant ”).

Each November 2020 Bought Deal Warrant entitles the holder thereof to acquire one Common Share at an exercise price of C$5.80 per Common Share until November 5, 2022.

The underwriters received a cash commission equal to 6.0% of the gross proceeds from the sale of the November 2020 Bought Deal Units.

The underwriters also received compensation options (each a “

November 2020 Bought Deal Compensation Option ”) equal to 6.0% of the number of November 2020 Bought Deal Units sold.

The underwriters also received compensation options (each a “ November 2020 Bought Deal Compensation Option ”) equal to 6.0% of the number of November 2020 Bought Deal Units sold.

Each November 2020 Bought Deal Compensation Option entitles the underwriters to purchase one Common Share at a price of C$4.30 until November 5, 2022.

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On information known at that time, MMDC filed a lawsuit against the State of Nevada, along with a significant majority of similarly denied applicants.

After the first week of trial in July 2020 concerning that litigation pending from December 2018, MMDC entered into a settlement agreement with the State of Nevada, and defendants in intervention to receive a license in unincorporated Clark County to reopen the Medizin location (the “

Medizin Facility ”) (the “

Nevada License Settlement ”).

On July 31, 2020, the Nevada Tax Commission convened and approved the signed Nevada License Settlement and requested that the CCB, which had authority over Nevada-licensed cannabis businesses as of July 1, 2020, also convene and approve the settlement.

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On November 20, 2020, we opened the Medizin Facility, having received CCB final inspection approvals and a Clark County business license.

2021 Bought Deal Offering, Opening of Planet 13 OC Superstore, Illinois Conditional License Award, Florida License Purchase Agreement

2021 Bought Deal Offering, Opening of Planet 13 OC Superstore, Illinois Conditional License, Florida License Purchase Agreement

February 2021 Bought Deal Offering

On February 2, 2021, we completed a bought deal financing for aggregate gross proceeds of C$69,028,750 (the “

February 2021 Bought Deal ”) pursuant to which an aggregate of 9,861,250 units (each, a “

February 2021 Bought Deal Unit ”) of the Company were sold at a price of C$7.00 per February 2021 Bought Deal Unit.

Each February 2021 Bought Unit consisted of one Common Share and one-half (1/2) of one Common Share purchase warrant (each whole warrant, a “

February 2021 Bought Deal Warrant ”).

On February 2, 2021, we completed a bought deal financing for aggregate gross proceeds of C$69,028,750 (the “ February 2021 Bought Deal ”) pursuant to which an aggregate of 9,861,250 units (each, a “ February 2021 Bought Deal Unit ”) of the Company were sold at a price of C$7.00 per February 2021 Bought Deal Unit.

Each February 2021 Bought Unit consisted of one Common Share and one-half (1/2) of one Common Share purchase warrant (each whole warrant, a “ February 2021 Bought Deal Warrant ”).

Each February 2021 Bought Deal Warrant entitles the holder thereof to acquire one Common Share at an exercise price of C$9.00 per Common Share until February 2, 2023.

The underwriters received a cash commission equal to 6.0% of the gross proceeds from the sale of the February 2021 Bought Deal Units.

The underwriters also received compensation options (each a “

February 2021 Bought Deal Compensation Option ”) equal to 6.0% of the number of February 2021 Bought Deal Units sold.

The underwriters also received compensation options (each a “ February 2021 Bought Deal Compensation Option ”) equal to 6.0% of the number of February 2021 Bought Deal Units sold.

Each February 2021 Bought Deal Compensation Option entitles the underwriters to purchase one Common Share at a price of C$7.00 until February 2, 2023.

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August 2021 Illinois Dispensing License Lottery Win

On August 5, 2021, our subsidiary, Planet 13 Illinois LLC (“

Planet 13 Illinois ”), which was then owned 49% by us and 51% by Frank Cowan, a resident of Illinois, was a lottery winner for a Social-Equity Justice Involved Conditional Adult Use Dispensing Organization License in the Chicago-Naperville-Elgin region from the Department of Financial and Professional Regulation in the State of Illinois.

We intend to launch a dispensary in Waukegan, a suburb of the greater Chicago area, and anticipate that it will be operational in mid to late 2023.

On August 5, 2021, our subsidiary, Planet 13 Illinois LLC (“ Planet 13 Illinois ”), which was then owned 49% by us and 51% by Frank Cowan, a resident of Illinois, was a lottery winner for a Social-Equity Justice Involved Conditional Adult Use Dispensing Organization License in the Chicago-Naperville-Elgin region from the Department of Financial and Professional Regulation in the State of Illinois.

We acquired the 51% ownership interest in Planet 13 Illinois LLC from Frank Cowan on February 7, 2023 pursuant to an option agreement.

The aggregate purchase price for the 515 was 41,812,656 and consisted of $866,250 in cash consideration and the issuance of 1,063,377 shares of common stock of the Company valued at $946,406.

The dispensary opened to the public on December 4, 2023 and is located in Waukegan, a suburb of the greater Chicago area.

October 2021 Florida License Acquisition

On October 1, 2021, our wholly owned subsidiary, Planet 13 Florida Inc.

Planet 13 Florida ”), completed the acquisition of a license from a subsidiary of Harvest Health & Recreation Inc.

(the “

Seller ”) pursuant to which Planet 13 Florida purchased from the Seller a license to operate as a Medical Marijuana Treatment Center issued by the Florida Department of Health for $55,000,000 in cash.

(“ Planet 13 Florida ”), completed the acquisition of a license from a subsidiary of Harvest Health & Recreation Inc.

(the “ Seller ”) pursuant to which Planet 13 Florida purchased from the Seller a license to operate as a Medical Marijuana Treatment Center issued by the Florida Department of Health for $55,000,000 in cash.

No other assets or liabilities were acquired.

Licensed Medical Marijuana Treatment Centers (“

MMTCs ”) are vertically integrated and the only businesses in Florida authorized to cultivate, process, transport and dispense medical marijuana to qualified patients and caregivers.

Licensed Medical Marijuana Treatment Centers (“ MMTCs ”) are vertically integrated and the only businesses in Florida authorized to cultivate, process, transport and dispense medical marijuana to qualified patients and caregivers.

As of December 31, 2022, there were 22 companies with MMTC licenses in Florida .

License holders are not subject to restrictions on the number of dispensaries that may be opened or on the number or size of cultivation and processing facilities they may operate.

Recent Developments

2022 Acquisition of NGW, Purchase of Florida Cultivation Site, Illinois Option Purchase Agreement, Purchase of Illinois Dispensing Location

March 2022 NGW Acquisition

On March 2, 2022 (the “

Closing Date ”), we completed our acquisition of NGW.

We entered into an arrangement agreement (the “

Arrangement Agreement ”) with NGW on December 20, 2021 pursuant to which we agreed to acquire (the “

Arrangement ”) all of the issued and outstanding common shares of NGW (the “

NGW Shares ”), and then amalgamate with NGW pursuant to a plan of arrangement (the “

Plan of Arrangement ”) under the Business Corporations Act (British Columbia).

The Arrangement was approved by the holders of NGW Shares (the “

NGW Shareholders ”) at a special meeting of NGW Shareholders held on February 25, 2022 and approved by the Supreme Court of British Columbia on March 1, 2022.

On March 2, 2022 (the “ Closing Date ”), we completed our acquisition of NGW.

We entered into an arrangement agreement (the “ Arrangement Agreement ”) with NGW on December 20, 2021 pursuant to which we agreed to acquire (the “ Arrangement ”) all of the issued and outstanding common shares of NGW (the “ NGW Shares ”), and then amalgamate with NGW pursuant to a plan of arrangement (the “ Plan of Arrangement ”) under the Business Corporations Act (British Columbia).

The Arrangement was approved by the holders of NGW Shares (the “ NGW Shareholders ”) at a special meeting of NGW Shareholders held on February 25, 2022 and approved by the Supreme Court of British Columbia on March 1, 2022.

Pursuant to the Plan of Arrangement, at 12:01 a.m.

(Vancouver time) (the “

Effective Time ”) on the Closing Date, we acquired all of the NGW Shares for a total consideration of approximately C$71,345,747 (based on the closing price of our Common Shares (the “

Planet 13 Shares ”) on the Canadian Securities Exchange on March 2, 2022), and NGW then amalgamated with us.

The NGW Shareholders received 0.1145 of one Planet 13 Share (the “

Exchange Ratio ”) and a nominal cash payment of C$0.0001 for each NGW Share held immediately prior to the Effective Time.

(Vancouver time) (the “ Effective Time ”) on the Closing Date, we acquired all of the NGW Shares for a total consideration of approximately C$71,345,747 (based on the closing price of our Common Shares (the “ Planet 13 Shares ”) on the Canadian Securities Exchange on March 2, 2022), and NGW then amalgamated with us.

The NGW Shareholders received 0.1145 of one Planet 13 Share (the “ Exchange Ratio ”) and a nominal cash payment of C$0.0001 for each NGW Share held immediately prior to the Effective Time.

As a result, 21,361,002 Planet 13 Shares and C$18,656 in cash were issued in exchange for the NGW Shares.

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As a result, we issued 1,106,925 options in exchange for the NGW options.

Though we have since restructured the cannabis licenses of NGW (as more fully set forth in Table 1 in the Licenses section below), through this acquisition, we gained seven cannabis licenses in the State of California.

The combined licenses of Newtonian and NGW allow for cultivation, production, distribution, and dispensing activities in California.

Though we have since restructured the cannabis licenses of NGW (as more fully set forth in Table 1 in the Licenses section below), through this acquisition, we gained seven cannabis licenses in the State of California.

The combined licenses of Newtonian and NGW allow for cultivation, production, distribution, and dispensing activities in California.

July 2022 Purchase of Florida Cultivation Site

On July 1, 2022, we, through our subsidiary Planet 13 Florida, Inc., closed on a $3,300,000 purchase of a 23-acre parcel of real property, inclusive of a 10,500 square foot building, near Ocala, Florida.

The property was previously leased by Planet 13 Florida, Inc., and has received approvals for cultivation, processing, and dispensing via delivery from the Florida Office of Medical Marijuana Use 

August 2022 Planet 13 Illinois Option Purchase Agreement

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On February 3, 2023, we closed on this transaction.

Recent Developments

2023 Purchase of Remaining 51% of Planet 13 Illinois

On February 7, 2023, we exercised and closed our option to purchase the remaining 51% of Planet 13 Illinois from Frank Cowan. 

Overview of the Company ’

s Cannabis Business

On February 7, 2023, we exercised and closed our option to purchase the remaining 51% of Planet 13 Illinois from Frank Cowan.

VidaCann Membership Interest Purchase Agreement

On August 28, 2023, we entered into a Membership Interest Purchase Agreement (“ Purchase Agreement ”) with VidaCann, LLC (“ VidaCann ”), Loop’s Dispensaries, LLC (“ Dispensaries ”), Ray of Hope 4 Florida, LLC (“ Ray of Hope ”) and Loops Nursery & Greenhouses, Inc.

(“ Nursery ” and together with Dispensaries and Ray of Hope, the “ Sellers ”), David Loop (“ Loop ”) and Mark Ascik (together with Loop, the “ Indemnifying Members ”) and Loop, solely in his capacity as Seller Representative, pursuant to which, upon the terms and subject to the conditions set forth therein, the Company will acquire from the Sellers all of the membership interests in VidaCann (the “ Transaction ”).

Pursuant to the Purchase Agreement, the Company will acquire VidaCann from the Sellers for agreed consideration at closing of the Transaction (the “ Closing ”) equal to the sum of:

(i) 78,461,538 shares of common stock of the Company (the “ Base Share Consideration ”), of which 1,307,698 shares will be issued to VidaCann’s industry advisor (the “ VC Advisor ”) ;

(ii) a cash payment of US$4,000,000 (the “ Closing Cash Payment ”);

and (iii) promissory notes to be issued by the Company to the Sellers in the aggregate principal amount of US$5,000,000, with each of the above components subject to adjustments as set out in the Purchase Agreement.

Based on the closing price of the Company’s common shares of (CAD$0.69) US$0.5071 as of August 25, 2023 on the Canadian Securities Exchange (the “ CSE ”) (based on the Bank of Canada CAD to USD exchange rate on August 25, 2023 of CAD$1.00=US$1.3606), the total consideration was valued at approximately US$48.9 million at that time.

The Purchase Agreement contemplates that VidaCann will continue to have US$3,000,000 of bank indebtedness and US$1,500,000 or less of related party notes to former VidaCann owners at the Closing.

The Purchase Agreement contains customary representations, warranties and covenants.

The Sellers and VidaCann have agreed to use commercially reasonable efforts to operate their business in the ordinary course consistent with past practice prior to the Closing and to refrain from taking certain actions without the Company’s consent.

The parties have each agreed to use their respective reasonable best efforts to consummate the Transaction, including to obtain required regulatory approvals and certain consents.

The Sellers, Indemnifying Members and the Company have each agreed to customary indemnification obligations with respect to breaches of their respective representations and warranties and failures to perform their respective obligations under the Purchase Agreement following the Closing.

The Indemnifying Members’ indemnification obligations are subject to certain customary limitations and deductibles.

The Transaction is subject to the satisfaction or waiver of certain conditions set forth in the Purchase Agreement, including, among others, (i) the sale of the Company’s MMTC license in Florida to a third party, including any regulatory approvals required to effectuate the sale;

(ii) the receipt of all regulatory consents from governmental authorities related to the operation of a cannabis business and consents required by the CSE;

(iii) the receipt of certain third-party contractual consents and entry into certain other contractual arrangements;

(iv) the entry into a non-compete agreement between the Company and each of the Indemnifying Members and Bobby Loehr;

(v) the absence of any law or governmental order prohibiting the consummation of the Transaction;

(vi) the accuracy of the parties respective representations and warranties;

and (vii) the performance by the parties of their respective obligations under the Purchase Agreement.

The Sellers will be granted the right on closing to nominate one additional (fifth), director to the board of directors of the Company (the “ Board ”).

The Board has received a fairness opinion from Evans & Evans, Inc.

(“ Evans & Evans ”) to the effect that, in its opinion, and based upon and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be paid by the Company is fair, from a financial point of view, to the Company’s shareholders.

The fee paid to Evans & Evans in connection with the delivery of its fairness opinion is not contingent on the successful implementation of the Transaction.

Post-transaction, and based on the number of outstanding shares as of August 28, 2023, the former equity holders of VidaCann, along with the VC Advisor, are expected to have approximately 26.09% pro forma ownership in the Company on a fully diluted basis, before factoring in any adjustments to the Base Share Consideration.

Each Seller and each equityholder of a Seller that holds over 5% in direct or indirect interest in VidaCann and receives Base Share Consideration will be subject to a lock-up agreement restricting trading of the shares received, with the release of one-third of shares from such restrictions six months following Closing and each subsequent six months thereafter.

The Purchase Agreement contains customary termination provisions, including the ability to terminate in the event the Transaction has not been completed by April 30, 2024.

Domestication

On September 15, 2023 (the “ Effective Date ”), Planet 13 Holdings Inc., a British Columbia corporation (“ Planet 13 BC ”) filed articles of domestication and articles of incorporation with the Secretary of State of the State of Nevada and changed its jurisdiction from the Province of British Columbia, Canada, to the State of Nevada (the “ Domestication ”), pursuant to a court-approved plan of arrangement (“ Plan of Arrangement ”).

On the Effective Date, pursuant to the Plan of Arrangement and by operation of law, all the rights, privileges and powers of Planet 13 BC, all property owned by Planet 13 BC, all debt due to Planet 13 BC, and all other causes of action belonging to Planet 13 BC immediately prior to the Effective Date remain vested in, or attached to, the Company following the Effective Date.

On the Effective Date, each holder of issued and outstanding common share of Planet 13 BC (the “ Common Shares ”) was deemed to receive one share of common stock of the Company (“ Common Stock ”), without any action required on the part of the holder thereof.

Additionally, each holder of outstanding options to purchase Common Shares was deemed to receive options to purchase an equal number of shares of Common Stock at the same exercise price per share and otherwise the same terms under the Planet 13 Holdings Inc.

2018 Stock Option Plan, and each holder of restricted share units was deemed to receive restricted share units for an equal number of shares of the Common Stock and otherwise with the same terms and conditions under the Planet 13 Holdings Inc.

2018 Share Unit Plan.

Pending Disposition

On January 22, 2024, we entered into a Stock Purchase Agreement (the “ Disposition Agreement ”) with SGW FL Enterprises, LLC (the “ SGWFL ”), pursuant to which, upon the terms and subject to the conditions set forth therein, we will sell all of the issued and outstanding shares of common stock (the “ P13 Florida Shares ”) of Planet 13 Florida Inc.

(the “ Pending Disposition ” and, together with the Pending Acquisition, the “ Pending Transactions ”), which owns a the MMTC License.

The sale of the MMTC License is a closing condition to the Pending Acquisition.

Pursuant to the Disposition Agreement, we will sell the P13 Florida Shares at closing of the Pending Disposition (the “ Pending Disposition Closing ”) for a cash payment of $9.0 million due on the Pending Disposition Closing.

The Disposition Agreement contains customary representations, warranties and covenants.

The parties have each agreed to use their respective commercially reasonable efforts to consummate the Pending Disposition, including to obtain required regulatory approvals.

The Pending Disposition is expected to close in the first quarter of 2024 or early in the second quarter of 2024, subject to the satisfaction or waiver of certain conditions set forth in the Disposition Agreement, including, among others, (i) the receipt of regulatory approvals;

(ii) the accuracy of the parties respective representations and warranties;

(iii) the performance by the parties of their respective obligations under the Disposition Agreement and (iv) our simultaneous closing of the Pending Acquisition.

The Disposition Agreement contains customary termination provisions, including the ability to terminate in the event the Pending Disposition has not been completed by May 31, 2024.

Access to Certain Cash Accounts and El Capitan Misappropriation

On June 20, 2021, we engaged El Capitan Advisors, Inc.

(“ El Capitan ”), an investment advisor registered with the SEC, for cash management services.

One of our accounts managed by El Capitan was held at BridgeBank, a division of Western Alliance Bank (collectively “ WAB ”).

Pursuant to a dispute unrelated to us, Casa Verde Capital, L.P.

and Casa Verde Capital EF, L.P.

(collectively “ Casa Verde ”) obtained a $35.0 million default judgment against El Capitan, which is a portfolio company of Casa Verde.

Casa Verde then levied that judgment causing approximately $5.5 million of our funds held at WAB (the “ WAB Funds ”) and managed by El Capitan to be directed to the Orange County, California Sheriff’s Office (the “ Sheriff ’ s Office ”) on September 21, 2023.

On or around October 24, 2023, we became aware of the levy against the WAB Funds and thereafter filed a third-party claim (the “ WAB Claim ”) of exemption asserting rightful ownership over the WAB Funds.

We have secured a partial settlement with Casa Verde for the release of $3.4 million of the WAB Funds, which we received on January 31, 2024.

The remaining approximately $2.1 million of the WAB Funds (the “ Remaining Levied Funds ”) are still in the possession of the Sheriff’s Office while litigation is ongoing.

We have not relinquished any right to the Remaining Levied Funds and continue to pursue their return.

A hearing on the ultimate disposition of the Remaining Levied Funds is scheduled for April 29, 2024.

After filing the WAB Claim in November 2023, we also took immediate action to withdraw the remaining approximately $16.5 million that we held in two additional accounts managed by El Capitan (the “ Additional Funds ”).

We were initially informed by El Capitan that the Additional Funds were being wired to us in due course.

However, on November 14, 2023, El Capitan informed us that due to issues in connection with the Casa Verde judgment the wire was not able to be processed.

Since November 14, 2023, El Capitan has refused to honor our further withdrawal requests with respect to the Additional Funds and at this time it is unclear whether the Additional Funds will be returned.

Based on discussions with El Capitan to secure the withdrawal of the Additional Funds and purported bank statements provided by El Capitan, we have reason to believe that the Additional Funds were misappropriated by El Capitan.

On January 22, 2024, we initiated a lawsuit in Santa Monica, California against El Capitan, El Capitan’s founder and Chief Executive Officer—Andrew Nash, Casa Verde, Casa Verde’s Managing Member—Karan Wadhera, and Jamie Nash, the spouse of Andrew Nash (collectively “ Defendants ”) seeking approximately $16.5 million in compensatory damages and other relief.

We are vigorously pursuing our rights against the Defendants.

On January 25, 2024, as a result of the preliminary information obtained in connection with an ongoing internal investigation regarding the El Capitan matter, the audit committee (the “ Audit Committee ”) of our board of directors, based on the recommendation of our management, and after consultation with our independent registered public accounting firm, concluded that our previously issued audited consolidated financial statements as of and for the years ended December 31, 2022 and 2021 included in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “ 2022 Annual Report ”) and our previously issued unaudited consolidated financial statements included in the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023 and September 30, 2023 should no longer be relied upon due to material errors resulting from to the believed misappropriation of approximately $22.0 million of our funds held by El Capitan.

Thereafter, on February 20, 2024, we filed Amendment No.

1 on Form 10-K/A to the 2022 Annual Report, Amendment No.

1 on Form 10-Q/A to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, Amendment No.

1 on Form 10-Q/A to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, and Amendment No.

1 on Form 10-Q/A to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.

Our internal investigation regarding the El Capitan matter remains ongoing, and we may uncover additional material information as the investigation moves forward.

Overview of the Company ’ s Cannabis Business

On November 1, 2018, we opened the Planet 13 Las Vegas Superstore, less than 500 feet from the Trump Tower and less than 2,500 feet from the Wynn hotel.

MMDC entered into an arm’s length agreement to lease a 100,000 square foot building to house its Planet 13 Las Vegas Superstore dispensary and corporate office space in a Phase I build-out of the location (the “

Planet 13 Las Vegas Superstore ”).

In October 2019, we opened a 4,500-square-foot coffee shop and pizzeria in the Planet 13 Las Vegas Superstore.

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The Beatty cultivation facility currently houses approximately 500 square feet of research and development and genetics testing with the potential to expand to over 2,300,000 square feet of greenhouse production capacity on 80 acres of owned land that includes municipal water and abundant electrical power already at the edge of the property.

Following the Arrangement which closed on March 2, 2022, we, through our wholly-owned subsidiary, Next Green Wave, LLC (“

NGW, LLC ”), which is licensed by the State of California to produce, distribute and sell products throughout the State, cultivate and process our cannabis products at our 35,875 square foot facility on one of the four properties utilized by us and zoned for cannabis cultivation in the City of Coalinga, California (“

Facility A ”).

Following the Arrangement which closed on March 2, 2022, we, through our wholly-owned subsidiary, Next Green Wave, LLC (“ NGW, LLC ”), which is licensed by the State of California to produce, distribute and sell products throughout the State, cultivate and process our cannabis products at our 35,875 square foot facility on one of the four properties utilized by us and zoned for cannabis cultivation in the City of Coalinga, California (“ Facility A ”).

Facility A enables us to cultivate medicinal and adult-use cannabis and distribute cannabis products in accordance with the requirements under the Medicinal and Adult Use Cannabis Regulation and Safety Act, throughout the State of California.

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Manufactured products and Trendi-branded third-party flower are distributed through Nevada under our Nevada distribution license.

Following the Arrangement which closed on March 2, 2022, in California, we, through our wholly-owned subsidiary, NGW, LLC, which is licensed by the State of California to produce, distribute and sell products throughout the State, process and package our cannabis products at our 4,000 square foot facility on one of the four properties utilized by us and zoned for cannabis cultivation in the City of Coalinga, California (“

Facility C ”).

Facility C enables us to process and package medicinal and adult-use cannabis and distribute cannabis products in accordance with the requirements under the Medicinal and Adult Use Cannabis Regulation and Safety Act, throughout the State of California.

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We currently operate California distribution activities at our licensed facility in Santa Ana, California to receive cannabis products purchased from our vendors prior to placement in the Planet 13 OC Superstore.

Following the Arrangement which closed on March 2, 2022, we, through our wholly-owned subsidiary, NGW, LLC, which is licensed by the State of California to produce, distribute and sell products throughout the State, distribute our cannabis products from Facilities A and C to California-licensed wholesale customers.

Following the Arrangement which closed on March 2, 2022, we, through our wholly-owned subsidiary, NGW, LLC, which is licensed by the State of California to produce, distribute and sell products throughout the State, distribute our cannabis products from Facilities A and C to California-licensed wholesale customers.

We have three Nevada dispensary licenses, one for medical and two for the sale of adult-use product.

Since 2018, the Planet 13 Las Vegas Superstore, approximately 23,000 square feet of retail space located adjacent to the Las Vegas Strip, has housed one medical and one adult-use license.

Since 2018, the Planet 13 Las Vegas Superstore, approximately 23,000 square feet of retail space located adjacent to the Las Vegas Strip, has housed one medical and one adult-use license.

The Planet 13 Las Vegas Superstore has the capacity to serve between 3,000 and 5,000 customers per day through its new, enhanced dispensary.

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The regulatory framework for consumption lounge applications and operations was finalized in July 2022.

In December 2022, we were approved for a retail attached cannabis consumption lounge prospective license and continue to develop our buildout and operational plans.

We operate one dispensary in California, the Planet 13 OC Superstore, which occupies approximately 25,600 square feet of retail space on Warner Avenue in the City of Santa Ana located in Orange County.

In December 2022, we were approved for a retail attached cannabis consumption lounge prospective license, and in October 2023, our prospective license was converted to conditional status.

We continue to develop our buildout and operational plans.

We operate one dispensary in California, the Planet 13 OC Superstore, which occupies approximately 25,600 square feet of retail space on Warner Avenue in the City of Santa Ana located in Orange County.

On March 3, 2023, we submitted a request to the DCC to add a medical designation to our dispensary license which will allow for the sale of medical cannabis products from the Planet 13 OC Superstore.

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March 31, 2025

Adult-Use Retailer

Medicinal / Adult-Use Retailer

Santa Ana, CA

April 17, 2024

Dispensary(1)

Medical / Adult-Use Distribution

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June 11, 2024

Event Organizer

Santa Ana, CA

August 3, 2024

Event Organizer

Medical/Adult-Use

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Cultivation, Medium Indoor

August 21, 2023

July 12, 2023

Cultivation, Processor(5)

Planet 13 Florida

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Chicago-Naperville-Elgin, IL

July 17, 2023

Dispensary(3)

_________________________

On March 3, 2023, we submitted a request to the DCC to add a medical designation to our dispensary license which will allow for the sale of medical cannabis products.

Renewal package was timely submitted in September 2022 and is pending OMMU review.

The conditional license was issued to Planet 13 Illinois on July 22, 2022.

Effective May 5, 2022, DCC enhanced this Manufacturer Type P license to Type 6 to authorize solventless extraction.

On February 27, 2023, NGW requested to surrender these licenses to DCC as the related activities are permitted under the new Medium Indoor Cultivation license.

March 31, 2024

Uses of Cannabis

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We believe that we can gain a competitive advantage by growing high yielding strains which are good extractors and which mature in a short growing cycle while still providing the desired THC profile.

Further, finding the right product for a customer’s condition or needs may require sampling a variety of strains, as every person is different.

Food and Drug Administration (“

FDA ”) has not recognized or approved cannabis as safe or effective for any indication.

Further, finding the right product for a customer’s condition or needs may require sampling a variety of strains, as every person is different.

Food and Drug Administration (“ FDA ”) has not recognized or approved cannabis as safe or effective for any indication.

Our cultivation, production, distribution and marketing business is currently focused on the medical and adult-use segments, with product offerings sold through our own licensed retail dispensaries as well as third party dispensaries in both California and Nevada.

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We currently operate the Planet 13 Las Vegas Superstore, a 24,000 square foot licensed cannabis dispensary located near the Las Vegas Strip, from which we:

(i) dispense medical (Medizin) and retail (Planet 13) product lines and provides customer experiences through entertainment features;

(ii) provide the consultation, education and convenience services described below;

and (iii) own and operate Trece Eatery + Spirits as well as operate a non-cannabis retail merchandise store and event space.

(i) dispense medical (Medizin) and retail (Planet 13) product lines and provides customer experiences through entertainment features; (ii) provide the consultation, education and convenience services described below; and (iii) own and operate Trece Eatery + Spirits as well as operate a non-cannabis retail merchandise store and event space.

Our principal products are cannabis and cannabis-infused items sold to consumers in the medical and retail cannabis markets in the State of Nevada.

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We expect, however, that the majority of these illegal dispensaries and cultivators will be forced to cease operations in the near-term.

Risk Factors.

See “ Risk Factors.

The main raw materials and components used in the production of our products are cannabis seeds and clones, water, plant nutrients, and electricity.

Water for our Clark County, Nye County, and Fresno County operations is obtained from the respective municipal water systems.

The price of water is determined by the respective local governments. 

Water for our Clark County, Nye County, and Fresno County operations is obtained from the respective municipal water systems.

The price of water is determined by the respective local governments.

Raw materials include soil, nutrients, organic integrated pest and disease management, environmental supplementation, disposable supplies, and other miscellaneous inputs, all of which are readily available from multiple sources at wholesale or lower prices.

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Full time employees are distributed among several departments, including sales, management and administration, security, cultivation, operations, marketing, facilities, human resources, finance, accounting and legal.

In order to ensure that the motivation, integrity and culture of our team stays strong, our Board of Directors (the “

Board ”) and executive team put significant focus on our human capital resources.

In order to ensure that the motivation, integrity and culture of our team stays strong, our Board of Directors (the “ Board ”) and executive team put significant focus on our human capital resources.

We are committed to diversity and to providing equal employment opportunities to all employees and applicants.

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To accomplish this, we offer a package of company-sponsored benefits to our employees.

Eligibility depends on each employee’s full-time or part-time status, location, and other factors, and benefits include medical and dental plans, paid and unpaid leaves, and flexible time-off.

We provide employee wages that are competitive and consistent with employee positions, skill levels, experience, knowledge, and geographic location.

Additionally, we believe in aligned incentives and utilize share unit and stock option plans as well as annual bonuses to align the long-term compensation of eligible directors, employees, officers, and contractors with our shareholders’

interests for a competitive total rewards program.

Legal and Regulatory Matters

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At the federal level, cannabis currently remains a Schedule I controlled substance under the U.S.

Controlled Substance Act of 1970 (the “

CSA ”).

Controlled Substance Act of 1970 (the “ CSA ”).

federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the United States, and a lack of accepted safety for the use of the drug under medical supervision.

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While technically illegal, the U.S.

federal government’s approach to enforcement of such laws has, at least until recently, trended toward non-enforcement.

On August 29, 2013, the U.S.

Department of Justice (“

DOJ ”) issued a memorandum known as the “

Cole Memorandum ”

Attorneys’

offices (federal prosecutors).

Department of Justice (“ DOJ ”) issued a memorandum known as the “ Cole Memorandum ” to all U.S.

Attorneys’ offices (federal prosecutors).

The Cole Memorandum generally directed U.S.

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federal enforcement of the CSA in states where cannabis use is regulated.

Sessions also issued a one-page memorandum known as the “

Sessions Memorandum ”.

This confirmed the rescission of the Cole Memorandum and explained that the Cole Memorandum was “unnecessary”

due to existing general enforcement guidance as set forth in the U.S.

Attorney’s Manual (the “

USAM ”).

the “seriousness”

of the alleged crimes, the “deterrent effect of criminal prosecution,”

and “the cumulative impact of particular crimes on the community.”

While the Sessions Memorandum does emphasize that marijuana is a Schedule I controlled substance and states the statutory view that it is a “dangerous drug and that marijuana activity is a serious crime,”

it does not otherwise guide U.S.

Sessions also issued a one-page memorandum known as the “ Sessions Memorandum ”.

This confirmed the rescission of the Cole Memorandum and explained that the Cole Memorandum was “unnecessary” due to existing general enforcement guidance as set forth in the U.S.

Attorney’s Manual (the “ USAM ”).

The USAM enforcement priorities, like those of the Cole Memorandum, are also based on the federal government’s limited resources, and include “law enforcement priorities set by the Attorney General,” the “seriousness” of the alleged crimes, the “deterrent effect of criminal prosecution,” and “the cumulative impact of particular crimes on the community.”

Attorneys that the prosecution of marijuana-related offenses is now a DOJ priority.

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Attorneys in deciding whether to prosecute marijuana-related offenses.

Attorneys could individually continue to exercise their discretion in a manner similar to that displayed under the Cole Memorandum’s guidance.

Dozens of U.S.

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was sworn in as President of the United States.

President Biden’s Attorney General, Merrick Garland, was confirmed by the United States Senate on March 10, 2021.

It is not yet known whether the Department of Justice under President Biden and Attorney General Garland will re-adopt the Cole Memorandum or announce a substantive marijuana enforcement policy.

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I'm calling on all governors to pardon simple state marijuana possession offenses ...

I'm asking [Secretary of Health and Human Services Becerra] and the Attorney General to initiate the process of reviewing how marijuana is scheduled under federal law." Despite these statements which appear positive for the nascent cannabis industry, there is no guarantee that cannabis will be rescheduled federally, that current state laws legalizing and regulating the sale and use of cannabis will not be repealed or overturned, or that local governmental authorities will not limit the applicability of state laws within their respective jurisdictions.

I'm asking [Secretary of Health and Human Services Becerra] and the Attorney General to initiate the process of reviewing how marijuana is scheduled under federal law." Despite these statements which appear positive for the nascent cannabis industry, there is no guarantee that cannabis will be rescheduled federally, that current state laws legalizing and regulating the sale and use of cannabis will not be repealed or overturned, or that local governmental authorities will not limit the applicability of state laws within their respective jurisdictions.

Unless and until the United States Congress amends the CSA with respect to cannabis (and as to the timing or scope of any such potential amendments there can be no assurance), there is a risk that federal authorities may enforce current U.S.

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Despite these laws, the U.S.

Department of the Treasury’s Financial Crimes Enforcement Network (“

FinCEN ”) issued a memorandum on February 14, 2014 (the “

FinCEN Memorandum ”) outlining the pathways for financial institutions to bank state-sanctioned cannabis businesses in compliance with federal enforcement priorities.

Department of the Treasury’s Financial Crimes Enforcement Network (“ FinCEN ”) issued a memorandum on February 14, 2014 (the “ FinCEN Memorandum ”) outlining the pathways for financial institutions to bank state-sanctioned cannabis businesses in compliance with federal enforcement priorities.

The FinCEN Memorandum echoed the enforcement priorities of the Cole Memorandum.

Under these guidelines, financial institutions must submit a Suspicious Activity Report (“

SAR ”) in connection with all marijuana-related banking activities by any client of such financial institution, in accordance with federal money laundering laws.

These marijuana-related SARs are divided into three categories - marijuana limited, marijuana priority, and marijuana terminated - based on the financial institution’s belief that the business in question follows state law, is operating outside of compliance with state law, or where the banking relationship has been terminated, respectively.

On the same day as the FinCEN Memorandum was published, the DOJ issued a memorandum (the “

2014 DOJ Memorandum ”) directing prosecutors to apply the enforcement priorities of the Cole Memorandum in determining whether to charge individuals or institutions with crimes related to financial transactions involving the proceeds of cannabis-related conduct.

Under these guidelines, financial institutions must submit a Suspicious Activity Report (“ SAR ”) in connection with all marijuana-related banking activities by any client of such financial institution, in accordance with federal money laundering laws.

On the same day as the FinCEN Memorandum was published, the DOJ issued a memorandum (the “ 2014 DOJ Memorandum ”) directing prosecutors to apply the enforcement priorities of the Cole Memorandum in determining whether to charge individuals or institutions with crimes related to financial transactions involving the proceeds of cannabis-related conduct.

The 2014 DOJ Memorandum has been rescinded as of January 4, 2018, along with the Cole Memorandum, removing guidance that enforcement of applicable financial crimes against state-compliant actors was not a DOJ priority.

However, former Attorney General Sessions’

revocation of the Cole Memorandum and the 2014 DOJ Memorandum has not affected the status of the FinCEN Memorandum, nor has the Department of the Treasury given any indication that it intends to rescind the FinCEN Memorandum itself.

However, former Attorney General Sessions’ revocation of the Cole Memorandum and the 2014 DOJ Memorandum has not affected the status of the FinCEN Memorandum, nor has the Department of the Treasury given any indication that it intends to rescind the FinCEN Memorandum itself.

Though it was originally intended for the 2014 DOJ Memorandum and the FinCEN Memorandum to work in tandem, the FinCEN Memorandum appears to be a standalone document which explicitly lists the eight enforcement priorities originally cited in the Cole Memorandum.

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In the U.S., the SAFE Banking Act of 2019, H.R.

1595 (“

SAFE Banking Act ”), was first introduced on March 7, 2019 and passed a vote on September 25, 2019 by the Committee of the Whole Congress, but failed to receive the support needed to pass the U.S.

1595 (“ SAFE Banking Act ”), was first introduced on March 7, 2019 and passed a vote on September 25, 2019 by the Committee of the Whole Congress, but failed to receive the support needed to pass the U.S.

Generally, the act would let banks offer services to cannabis-related businesses.

They could also offer services to those businesses’

They could also offer services to those businesses’ employees.

In both Canada and the U.S., transactions involving banks and other financial institutions are both difficult and unpredictable under the current legal and regulatory landscape.

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As an industry best practice, despite the recent rescission of the Cole Memorandum, we intend to abide by the following to ensure compliance with the guidance provided by the Cole Memorandum:

ensure that our operations are compliant with all licensing requirements as established by the applicable state, county, municipality, town, township, borough, and other political/administrative divisions;

ensure that our cannabis related activities adhere to the scope of the licensing obtained (for example, in states where cannabis is permitted only for adult-use, the products are only sold to individuals who meet the requisite age requirements);

implement policies and procedures to ensure that cannabis products are not distributed to minors;

implement policies and procedures in place to ensure that funds are not distributed to criminal enterprises, gangs or cartels;

implement an inventory tracking system and necessary procedures to ensure that such compliance system is effective in tracking inventory and preventing diversion of cannabis or cannabis products into those states where cannabis is not permitted by state law, or cross any state lines in general;

ensure that our state-authorized cannabis business activity is not used as a cover or pretense for trafficking of other illegal drugs, is engaged in any other illegal activity or any activities that are contrary to any applicable anti-money laundering statutes; and

implement policies and procedures to ensure that cannabis products are not distributed to minors;

implement policies and procedures in place to ensure that funds are not distributed to criminal enterprises, gangs or cartels;

ensure that our products comply with applicable regulations and contain necessary disclaimers about the contents of the products to prevent adverse public health consequences from cannabis use and prevent impaired driving.

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Senate Bill 374, which passed the legislature and was signed by the Nevada Governor in 2013, expanded this program and established a for-profit regulated medical marijuana industry.

In 2014, Nevada accepted medical marijuana business applications and a few months later the Nevada Division of Public and Behavioral Health (the “

Division ”) approved 182 cultivation licenses, 118 licenses for the production of edibles and infused products, 17 independent testing laboratories, and 55 medical marijuana dispensary licenses.

In 2014, Nevada accepted medical marijuana business applications and a few months later the Nevada Division of Public and Behavioral Health (the “ Division ”) approved 182 cultivation licenses, 118 licenses for the production of edibles and infused products, 17 independent testing laboratories, and 55 medical marijuana dispensary licenses.

The number of dispensary licenses was then increased to 66 by legislative action in 2015.

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Nevada has a medical marijuana program and passed adult-use legalization through the ballot box in November 2016.

Under Nevada’s adult-use marijuana law, the state licensed marijuana cultivation facilities, product manufacturing facilities, distributors, retail stores and testing facilities.

For the first 18 months after legalization, applications to the DOT for adult- use establishment licenses were only accepted from existing medical marijuana establishments and from existing liquor distributors for the adult-use distribution license.

The Division licensed and regulated medical marijuana establishments up until July 1, 2017, when the state’s medical marijuana program merged with adult-use marijuana enforcement under the DOT.

After merging medical and adult-use marijuana regulation and enforcement, the single regulatory agency was known as the “Marijuana Enforcement Division of the Department of Taxation”.

The Division licensed and regulated medical marijuana establishments up until July 1, 2017, when the state’s medical marijuana program merged with adult-use marijuana enforcement under the DOT.

After merging medical and adult-use marijuana regulation and enforcement, the single regulatory agency was known as the “Marijuana Enforcement Division of the Department of Taxation”.

The DOT oversaw regulation of cannabis operations until the CCB took over on July 1, 2020.

As of October 5, 2020, all five members of the CCB were appointed by the Nevada Governor.

In February 2017, the state announced plans to issue “early start”

recreational marijuana establishment licenses in the summer of 2017.

In February 2017, the state announced plans to issue “early start” recreational marijuana establishment licenses in the summer of 2017.

These licenses expired at the end of the year and, beginning on July 1, 2017, allowed marijuana establishments holding both a retail marijuana store and dispensary license to sell their existing medical marijuana inventory as either medical or adult-use marijuana.

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The regular program was governed by permanent regulations found in Nevada Administrative Code Sections 453A and 453D through June 30, 2020.

In early 2019, Nevada legislature passed Nevada Assembly Bill 533 (“

AB533 ”), which authorized the formation of the CCB to be vested with the authority to license and regulate persons and establishments engaged in cannabis activities within Nevada and promulgated statutes which will replace Nevada Revised Statute (“

NRS ”) 453A and 453D effective on July 1, 2020.

In early 2019, Nevada legislature passed Nevada Assembly Bill 533 (“ AB533 ”), which authorized the formation of the CCB to be vested with the authority to license and regulate persons and establishments engaged in cannabis activities within Nevada and promulgated statutes which will replace Nevada Revised Statute (“ NRS ”) 453A and 453D effective on July 1, 2020.

Those statutes are currently codified at NRS 678A, B, C and D.

On July 21, 2020, the CCB adopted final Nevada Cannabis Compliance Regulations 1 through 14 (“

NCCR ”) which are substantially similar to the former Nevada Administrative Code Sections 453A and 453D.

On July 21, 2020, the CCB adopted final Nevada Cannabis Compliance Regulations 1 through 14 (“ NCCR ”) which are substantially similar to the former Nevada Administrative Code Sections 453A and 453D.

In response to industry feedback, on October 20, 2020, the CCB amended NCCR 5 to give clarity regarding public company ownership of Nevada cannabis companies.

Generally, those amendments include such companies being required to provide to the CCB notice of annual general meetings of shareholders and a non-objecting beneficial owners (“

NOBO ”) list as of the record date of each such meeting, and disclosure of any stockholders having 5% or greater ownership interest or that are able to exert control over a Nevada cannabis establishment.

Generally, those amendments include such companies being required to provide to the CCB notice of annual general meetings of shareholders and a non-objecting beneficial owners (“ NOBO ”) list as of the record date of each such meeting, and disclosure of any stockholders having 5% or greater ownership interest or that are able to exert control over a Nevada cannabis establishment.

Additionally, the CCB requires an updated list of all beneficial owners, regardless of amount or type of ownership, but if a list of all beneficial owners cannot be obtained through reasonable cost and/or effort, the publicly traded company must provide an updated NOBO list as of the annual meeting record date, and explain why it cannot provide a list of all beneficial owners through reasonable cost and effort.

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The last background check waiver approval received from CCB was a request we submitted on November 30, 2020 in relation to the acquisition of the conditional Nevada distribution license acquired from WCDN, but which extended to all shareholders holding less than 5% ownership interest.

We also submitted a background check waiver request to the CCB on January 3, 2022 in relation to the Arrangement Agreement, which may or may not be acted upon by the CCB (see “

Risk Factors ”).

We also submitted a background check waiver request to the CCB on January 3, 2022 in relation to the Arrangement Agreement, which may or may not be acted upon by the CCB (see “ Risk Factors ”).

Although the CCB has not chosen to exercise their authority to require a background check on ownership interests in public cannabis companies that remain under 5% and do not otherwise exercise control over a Nevada cannabis licensee, the CCB does have authority to require a licensee to investigate and submit any ownership interest, beneficial or direct, for CCB approval.

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Nevada Reporting Requirements

Nevada has selected Franwell Inc.’s METRC solution (“

METRC ”) as the state’s track-and-trace system used to track commercial cannabis activity and movement through the supply chain.

Nevada has selected Franwell Inc.’s METRC solution (“ METRC ”) as the state’s track-and-trace system used to track commercial cannabis activity and movement through the supply chain.

Individual licensees whether directly or through third-party integration systems are required to push data to the state to meet all reporting requirements.

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In December 2022, we were approved for a retail attached cannabis consumption lounge prospective license and continue to develop our buildout and operational plans.

Our licenses are in good standing and we, through MMDC, are in compliance with Nevada’s cannabis regulatory program.

MMDC has responded to all CCB inspections and received approval on all corrective actions.

We comply with applicable Nevada state licensing requirements as follows:

(i) MMDC is licensed pursuant to applicable Nevada state law to cultivate, possess and/or distribute THC- bearing cannabis in Nevada;

(ii) renewal dates for such licenses are docketed by legal counsel and/or other advisors;

(iii) random audits of our business activities are conducted by the applicable Nevada state regulator and by us to ensure compliance with applicable Nevada state law;

(iv) each of our employees is provided with an employee handbook that outlines internal standard operating procedures in connection the cultivation, possession and distribution of cannabis to ensure that all cannabis inventory and proceeds from the sale of such cannabis are properly accounted for and tracked, including through the use of scanners to confirm each customer’s legal age and the validity of each customer’s photo identification;

(v) each room that cannabis inventory and/or proceeds from the sale of such inventory enter is monitored by video surveillance;

(vi) software is used to track cannabis inventory from seed to sale.

(i) MMDC is licensed pursuant to applicable Nevada state law to cultivate, possess and/or distribute THC- bearing cannabis in Nevada; (ii) renewal dates for such licenses are docketed by legal counsel and/or other advisors; (iii) random audits of our business activities are conducted by the applicable Nevada state regulator and by us to ensure compliance with applicable Nevada state law; (iv) each of our employees is provided with an employee handbook that outlines internal standard operating procedures in connection the cultivation, possession and distribution of cannabis to ensure that all cannabis inventory and proceeds from the sale of such cannabis are properly accounted for and tracked, including through the use of scanners to confirm each customer’s legal age and the validity of each customer’s photo identification; (v) each room that cannabis inventory and/or proceeds from the sale of such inventory enter is monitored by video surveillance; (vi) software is used to track cannabis inventory from seed to sale.

We are contractually obligated to comply with applicable Nevada state law in connection with the cultivation, possession and/or distribution of cannabis in Nevada.

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The CCB limits applications for all licenses.

We have a full time General Counsel on staff in Nevada, who is a licensed attorney under the State Bar of Nevada, in good standing, whose responsibilities include monitoring the day-to-day activities of regulatory compliance staff, including ensuring that the established standard operating procedures are being adhered to at each stage of the cultivation, processing and distribution cycle, to identify any non-compliance matters and to put in place the necessary modifications to ensure compliance.

The regulatory compliance staff conducts regular unannounced audits against our established standard operating procedures and State of Nevada regulations.

Each employee is provided with an employee handbook outlining the standard operating procedures and state regulations upon hiring and is then provided with one-on-one quality and regulatory training through programs overseen by the General Counsel.

We have regulatory compliance staff whose responsibilities include ensuring that the established standard operating procedures are being adhered to at each stage of the cultivation, processing and distribution cycle, to identify any non-compliance matters and to put in place the necessary modifications to ensure compliance.

Our regulatory compliance staff conducts regular unannounced audits against our established standard operating procedures and State of Nevada regulations.

California State Law Overview

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In 2003, Senate Bill 420 was signed into law establishing an optional identification card system for medical marijuana patients.

In September 2015, the California legislature passed three bills collectively known as the Medical Cannabis Regulation and Safety Act (“

MCRSA ”).

In September 2015, the California legislature passed three bills collectively known as the Medical Cannabis Regulation and Safety Act (“ MCRSA ”).

The MCRSA established a licensing and regulatory framework for medical marijuana businesses in California.

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Multiple agencies would oversee different aspects of the program and businesses would require a state license and local approval to operate.

However in November 2016, voters in California overwhelmingly passed Proposition 64, the Adult-Use of Marijuana Act (“

AUMA ”) creating an adult-use marijuana program for adults 21 years of age or older.

However in November 2016, voters in California overwhelmingly passed Proposition 64, the Adult-Use of Marijuana Act (“ AUMA ”) creating an adult-use marijuana program for adults 21 years of age or older.

AUMA included certain conflicting provisions with MCRSA, so in June 2017, the California State Legislature passed Senate Bill No.

94, known as Medicinal and Adult-Use Cannabis Regulation and Safety Act (“

MAUCRSA ”), which amalgamates MCRSA and AUMA to provide a set of regulations to govern a medical and adult-use licensing regime for cannabis businesses in the State of California.

At that time the four agencies that regulated marijuana at the state level were the Bureau of Cannabis Control (“

BCC ”), California Department of Food and Agriculture, California Department of Public Health, and California Department of Tax and Fee Administration.

94, known as Medicinal and Adult-Use Cannabis Regulation and Safety Act (“ MAUCRSA ”), which amalgamates MCRSA and AUMA to provide a set of regulations to govern a medical and adult-use licensing regime for cannabis businesses in the State of California.

At that time the four agencies that regulated marijuana at the state level were the Bureau of Cannabis Control (“ BCC ”), California Department of Food and Agriculture, California Department of Public Health, and California Department of Tax and Fee Administration.

MAUCRSA came into effect on January 1, 2018.

One of the central features of MAUCRSA is known as “local control.”

In order to legally operate a medical or adult-use marijuana business in California, an operator must have both a local and state license.

One of the central features of MAUCRSA is known as “local control.” In order to legally operate a medical or adult-use marijuana business in California, an operator must have both a local and state license.

This requires license holders to operate in cities or counties with marijuana licensing programs.

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Provided renewal applications are submitted in a timely manner, we can expect the renewals to be granted in the ordinary course of business.

On January 10, 2020, the three commercial cannabis licensing agencies in California, the BCC, the Department of Food and Agriculture, and the Department of Public Health (collectively, “

California Licensing Agencies ”) announced that California Governor Gavin Newsom’s budget proposal for cannabis industry regulation and taxation included plans to consolidate the three licensing entities that are currently housed at the California Licensing Agencies into a single Department of Cannabis Control by July 2021.

With the passage of AB 141 on July 12, 2021, the California Licensing Agencies were consolidated into the Department of Cannabis Control (“

DCC ”).

On January 10, 2020, the three commercial cannabis licensing agencies in California, the BCC, the Department of Food and Agriculture, and the Department of Public Health (collectively, “ California Licensing Agencies ”) announced that California Governor Gavin Newsom’s budget proposal for cannabis industry regulation and taxation included plans to consolidate the three licensing entities that are currently housed at the California Licensing Agencies into a single Department of Cannabis Control by July 2021.

With the passage of AB 141 on July 12, 2021, the California Licensing Agencies were consolidated into the Department of Cannabis Control (“ DCC ”).

On September 8, 2021, the DCC announced proposed emergency regulations to move all cannabis regulations into Title 4 of the California Code of Regulations, with a stated goal of consolidating and improving the regulations.

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California Reporting Requirements

California has selected METRC as the state’s track-and-trace system used to track commercial cannabis activity and movement across the supply chain.

Individual licensees whether directly or through third-party integration systems are required to push data to the state to meet all reporting requirements.

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Upon closing of the Arrangement, we filed a notice of ownership update with the State of California, and assumed responsibility for the NGW licenses.

Additionally, our General Counsel works regularly with our California regulatory consultant and oversees all aspects of services provided in connection with the Santa Ana Permit, the cultivation, manufacturing, and distribution licenses acquired pursuant to the Arrangement completed on March 2, 2022, and the California License to ensure compliance and continuity of those licenses.

Florida State Law Overview

In 2014, the Florida Legislature passed the Compassionate Use Act, which was the first legal medical cannabis program in the state’s history.

The original Compassionate Use Act only allowed for low-THC cannabis to be dispensed and purchased by patients suffering from cancer and epilepsy.

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Also in 2016, the Florida Medical Marijuana Legalization Initiative was introduced by citizen referendum and passed on November 8.

This language, known as “

Amendment 2 ,”

amended the state constitution and mandated an expansion of the state’s medical cannabis program.

This language, known as “ Amendment 2 ,” amended the state constitution and mandated an expansion of the state’s medical cannabis program.

Amendment 2, and the resulting expansion of qualifying medical conditions, became effective on January 3, 2017.

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On June 9, 2017, the Florida House of Representatives and Florida Senate passed respective legislation to implement the expanded program by replacing large portions of the existing Compassionate Use Act, which officially became law on June 23, 2017.

The Florida Statutes Section 381.986(8) provides a regulatory framework that requires licensed producers, which are statutorily defined as “Medical Marijuana Treatment Centers”, to cultivate, process and dispense medical cannabis in a vertically-integrated marketplace.

Licenses are issued by the Office of Medical Marijuana Use (“

OMMU ”) and must be renewed biennially.

Licenses are issued by the Office of Medical Marijuana Use (“ OMMU ”) and must be renewed biennially.

License holders can only own one license.

Currently, the dispensaries can be in any geographic location within the state, provided that the local jurisdiction’s zoning regulations authorize such a use, the proposed site is zoned for a pharmacy and the site is not within 500 feet of a school.

The MMTC license permits us to sell medical cannabis to qualified patients to treat certain medical conditions in Florida, which are delineated in Florida Statutes Section 381.986.

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Any changes or expansions of previous representations and disclosures to the OMMU must be approved by the OMMU via a variance process.

The state of Florida uses BioTrackTHC as its computerized track-and-trace system for seed-to-sale reporting.

Individual licensees, whether directly or through third-party integration systems, are required to push data to the state to meet all reporting requirements.

Security and Storage Requirements

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The manifest must include the following information:

(i) departure date and time;

(ii) name, address and license number of the originating MMTC;

(iii) name and address of the receiving entity;

(iv) the quantity, form and delivery device of the cannabis;

(v) arrival date and time;

(vi) the make, model and license plate of the delivery vehicle;

and (vii) the name and signatures of the MMTC delivery employees.

(i) departure date and time; (ii) name, address and license number of the originating MMTC; (iii) name and address of the receiving entity; (iv) the quantity, form and delivery device of the cannabis; (v) arrival date and time; (vi) the make, model and license plate of the delivery vehicle; and (vii) the name and signatures of the MMTC delivery employees.

These manifests must be kept by the MMTC for inspection for up to three years.

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OMMU Inspections in Florida

The OMMU may conduct announced or unannounced inspections of MMTC’s to determine compliance with applicable laws and regulations.

The OMMU is to inspect an MMTC upon receiving a complaint or notice that the MMTC has dispensed cannabis containing mold, bacteria, or other contaminants that may cause an adverse effect to humans or the environment.

The OMMU is to conduct at least a biennial inspection of each MMTC to evaluate the MMTC’s records, personnel, equipment, security, sanitation practices, and quality assurance practices.

Florida License and Regulatory Compliance

We, through our subsidiary, Planet 13 Florida, hold the MMTC license and are in compliance with applicable licensing requirements and the regulatory framework enacted by the State of Florida.

We have retained Florida regulatory consultants with experience to advise us on regulatory requirement and updates in that state.

Our General Counsel works regularly with our Florida regulatory consultant and oversees all aspects of statutory and regulatory compliance for our MMTC license.

We have retained Florida regulatory consultants with experience to advise us on regulatory requirements and updates in that state.

Illinois State Law Overview

In June 2019, Illinois passed the Cannabis Regulation and Tax Act (“

CRTA ”), which legalized cannabis for recreational use and created one of the largest adult use markets in the country.

In June 2019, Illinois passed the Cannabis Regulation and Tax Act (“ CRTA ”), which legalized cannabis for recreational use and created one of the largest adult use markets in the country.

The law went into effect on June 25, 2019, and adult use sales of cannabis began in the state on January 1, 2020.

Under the CRTA, existing medical cannabis license holders were allowed to apply for Early Approval Adult Use Dispensing Organization (“

EAAUDO ”) licenses to be able to sell adult use product at existing medical cannabis dispensaries (known as “co-located”

or “same site”

dispensaries).

Existing medical operators also received the privilege of opening a secondary adult use only retail dispensary for every medical cannabis dispensary location already existing in the operator’s portfolio.

All EAAUDO license holders were also required to commit to Illinois’s groundbreaking Social Equity program either through a financial contribution, grant agreement, donation, incubation program, or sponsorship program.

The CRTA also authorized the issuance of an additional 75 Adult Use Dispensing Organization (“

AUDO ”) licenses, 40 craft grower licenses as well as infuser and transporter licenses in 2020.

Under the CRTA, existing medical cannabis license holders were allowed to apply for Early Approval Adult Use Dispensing Organization (“ EAAUDO ”) licenses to be able to sell adult use product at existing medical cannabis dispensaries (known as “co-located” or “same site” dispensaries).

The CRTA also authorized the issuance of an additional 75 Adult Use Dispensing Organization (“ AUDO ”) licenses, 40 craft grower licenses as well as infuser and transporter licenses in 2020.

Generally speaking, these licenses were to be awarded via a competitive application process.

The CRTA provided a significant advantage to applicants that qualified as a “Social Equity Applicant”

under the CRTA.

The CRTA provided a significant advantage to applicants that qualified as a “Social Equity Applicant” under the CRTA.

In addition, the CRTA authorized issuance up to 110 additional AUDO licenses and 60 craft grower licenses by December 21, 2021.

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22 CH 06071).

On September 3, 2021, the Illinois Department of Financial and Professional Regulation (" IDFPR ") announced that 185 Conditional AUDO licenses have been awarded through three license lotteries that took place on July 29, 2021, August 5, 2021, and August 19, 2021 respectively.

On September 3, 2021, the Illinois Department of Financial and Professional Regulation (“ IDFPR ”) announced that 185 Conditional AUDO licenses have been awarded through three license lotteries that took place on July 29, 2021, August 5, 2021, and August 19, 2021 respectively.

These Conditional AUDO licenses were ultimately issued to the respective winners in July 2022.

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(1) cultivation centers;

(2) craft growers;

(3) infusers;

(4) transporters which are regulated by the IDOA.

(2) craft growers; (3) infusers; (4) transporters which are regulated by the IDOA.

Fifth are dispensaries, which are regulated by IDFPR.

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On August 5, 2021, we, through our subsidiary, Planet 13 Illinois, in which entity we held a minority interest, won a Conditional Adult Use Dispensing Organization License in the Chicago-Naperville-Elgin region, the most populated region of Illinois.

The conditional license was issued to Planet 13 Illinois on July 22, 2022 and expires on July 17, 2023.

Such a license will cease to be "conditional" once it is tethered to an approved location.

The conditional license was issued to Planet 13 Illinois on July 22, 2022.

Such a license ceases to be “conditional” once it is tethered to an approved location, which occurred effective November 22, 2023.

On February 7, 2023, and upon the receipt of regulatory approval from IDFPR, we exercised our option to purchase the majority interest of Planet 13 Illinois.

As such, we are now the 100% owner of that license holding entity.

We have retained Illinois regulatory counsel, with experience to advise us on regulatory requirements during the pre-license issuance period and following the anticipated annual license issuance to Planet 13 Illinois.

Our General Counsel works regularly with our Illinois regulatory counsel and oversees all aspects of statutory and regulatory compliance.

We have retained Illinois regulatory counsel with experience to advise us on regulatory requirements during the pre-license issuance period and following the November 22, 2023 issuance of the annual license to Planet 13 Illinois.

Compliance with State Law

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Federal enforcement priorities, that our businesses are in compliance with applicable licensing requirements and the regulatory frameworks enacted by the states in which we operate.

Our General Counsel works with external legal advisors in Nevada, California, Illinois, and Florida to ensure that we and our subsidiaries are in compliance with applicable state laws, including:

frequent correspondence and updates with advisors;

development and maintenance of standard operating procedures with respect to dispensing, cultivation, processing and distribution;

ongoing monitoring of compliance with operating procedures and regulations by on-site management;

appropriate employee training for all standard operating procedures; and

We work with external legal advisors in Nevada, California, Illinois, and Florida to ensure that we and our subsidiaries are in compliance with applicable state laws, including:

frequent correspondence and updates with advisors;

development and maintenance of standard operating procedures with respect to dispensing, cultivation, processing and distribution;

ongoing monitoring of compliance with operating procedures and regulations by on-site management;

appropriate employee training for all standard operating procedures; and

subscription to monitoring programs to ensure compliance with the FinCEN Memorandum.

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To ensure the safety and security of cannabis business premises and to maintain adequate controls against the diversion, theft, and loss of cannabis or cannabis products, we do the following in full compliance with state statutes and regulations:

have an enclosed, locked facility, with appropriate entrance security;

train employees in security measures and controls, emergency response protocol, confidentiality requirements, safe handling of equipment, procedures for handling products, as well as the differences in strains, methods of consumption, methods of cultivation, methods of fertilization and methods for health monitoring;

install sophisticated, regulatory-compliant security equipment to deter and prevent unauthorized entrances;

install security alarms to alert local law enforcement of unauthorized breach of security; and

have an enclosed, locked facility, with appropriate entrance security;

install sophisticated, regulatory-compliant security equipment to deter and prevent unauthorized entrances;

install security alarms to alert local law enforcement of unauthorized breach of security; and

implement security procedures that:

restrict access of the establishment to only those persons/employees authorized to be there;

deter and prevent theft;

provide identification (badge) for those persons/employees authorized to be in the establishment;

prevent loitering;

require and explain electronic monitoring; and

restrict access of the establishment to only those persons/employees authorized to be there;

deter and prevent theft;

provide identification (badge) for those persons/employees authorized to be in the establishment;

prevent loitering;

require and explain electronic monitoring; and

require and explain the use of automatic or electronic notification to alert local law enforcement of an unauthorized breach of security.

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Adverse outcomes in some or all of these claims may result in significant monetary damages or injunctive relief that could adversely affect our ability to conduct our business.

The litigation and other claims are subject to inherent uncertainties and management’s view of these matters may change in the future.

A material adverse impact on our financial statements also could occur for the period in which the effect of an unfavorable outcome becomes probable and reasonably estimable.

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This risk was further heightened by the revocation of the Cole Memorandum in January 2018.

United States Federal Law Overview .”

See “ United States Federal Law Overview .”

Further, there can be no assurance that state laws legalizing and regulating the sale and use of cannabis will not be repealed or overturned, or that local government authorities will not limit the applicability of state laws within their respective jurisdictions.

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The consequences of such enforcement would be materially adverse to our business and could result in the forfeiture or seizure of all or substantially all of our assets.

Risk Factors .”

Nature of the Company ’

s Involvement in the U.S.

See “ Risk Factors .”

Nature of the Company ’ s Involvement in the U.S.

Cannabis Industry

We have a material direct involvement in the cannabis industry in Nevada and California.

Currently, we are directly engaged in the cultivation, manufacture and production, possession, use, sale and distribution of cannabis in the medical and adult-use cannabis marketplace in Nevada and California.

As of December 31, 2022, we hold an MMTC license in Florida and a Conditional Adult-Use Dispensing Organization license in Illinois which we intend to place into operation.

As of December 31, 2023, we hold an MMTC license in Florida.

See Recent Developments for further information related to the Company’s Florida operations and its planned acquisition of VidaCann, LLC.

As of December 31, 2023, virtually all of our assets and revenues are directly attributable to the medical and adult-use cannabis market.

We hold cultivation, production, dispensary, and distribution licenses for the State of Nevada and cultivation, manufacturing, dispensary, and distribution licenses for the State of California.

We hold cultivation, production, dispensary, and distribution licenses for the State of Nevada and cultivation, manufacturing, dispensary, and distribution licenses for the State of California.

As previously stated, violations of any federal laws and regulations could result in significant fines, penalties, administrative sanctions, convictions or settlements arising from civil proceedings conducted by either the federal government or private citizens, or criminal charges, including, but not limited to, disgorgement of profits, cessation of business activities or divestiture.

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The approach to the enforcement of cannabis laws may be subject to change or may not proceed as previously outlined.

Risk Factors .”

See “ Risk Factors .”

Our operations in the U.S.

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We may, in future periods, expand our operations outside of Nevada and California and intend to restrict such future expansion to:

(i) only those states that have enacted laws legalizing cannabis;

and (ii) only those states where we can comply with state (and local) laws and regulations and have the licenses, permits or authorizations to properly carry on each element of our business.

(i) only those states that have enacted laws legalizing cannabis; and (ii) only those states where we can comply with state (and local) laws and regulations and have the licenses, permits or authorizations to properly carry on each element of our business.

In addition, we will continue to ensure we are in compliance with applicable licensing requirements and the regulatory framework enacted in the states in which we operate by continuous review of our licenses and affirmation certifications from management.

and will update our continuous disclosure regarding government policy changes or new or amended guidance, laws or regulations regarding cannabis in the U.S as required.

We will continue to monitor, evaluate and re-assess the regulatory framework in the states in which we operate and any state that we may look to expand our operations to in the future, and the federal laws applicable thereto, on an ongoing basis; and will update our continuous disclosure regarding government policy changes or new or amended guidance, laws or regulations regarding cannabis in the U.S as required.

Anti-Money Laundering Laws and Regulations

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that involve money laundering, financial recordkeeping and proceeds of crime, including the U.S.

Currency and Foreign Transactions Reporting Act of 1970 (“

Bank Secrecy Act ”), as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“

USA PATRIOT Act ”) and the rules and regulations thereunder, and any related or similar rules, regulations or guidelines, issued, administered or enforced by governmental authorities in the U.S.

Currency and Foreign Transactions Reporting Act of 1970 (“ Bank Secrecy Act ”), as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“ USA PATRIOT Act ”) and the rules and regulations thereunder, and any related or similar rules, regulations or guidelines, issued, administered or enforced by governmental authorities in the U.S.

Further, under U.S.

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This may restrict our ability to declare or pay dividends or effect other distributions.

Furthermore, while we have no current intention to declare or pay dividends on our Common Shares in the foreseeable future, we may decide to, or be required to, suspend declaring or paying dividends without advance notice and for an indefinite period of time.

Furthermore, while we have no current intention to declare or pay dividends on our Common Stock in the foreseeable future, we may decide to, or be required to, suspend declaring or paying dividends without advance notice and for an indefinite period of time.

Ability to Access Private and Public Capital

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Available Information

Our website address is www.planet13holdings.com .

Our website address is www.planet13.com .

Through this website, our filings with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K are accessible (free of charge) as soon as reasonably practicable after materials are electronically filed or furnished to the SEC.

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The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Our filings with the SEC are available to the public on the SEC’s website at www.sec.gov . 

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business