Planet 13 was supposed to revolutionize legal cannabis. The marijuana superstore opened five years ago in Orange County with fanfare and predictions that its walls of TV screens and massive footprint would change how everyone bought weed.
Instead, it has crumbled under the weight of its own eight-tentacled statue.
The store’s parent company, Planet 13 Holdings, announced in November that it was selling the 55,000-square-foot Santa Ana store, known as Planet 13 Santa Ana, after millions of dollars in losses. California cannabis chain Catalyst Cannabis took over the store this week, CEO Elliot Lewis told SFGATE, ensuring that the fate of California’s largest cannabis retail store was sealed.
The massive Southern California Ana store was the second retail location for Planet 13 after its flagship Las Vegas superstore, which is even bigger than the Orange County location and claims to be the biggest pot store in the world. The Las Vegas store has fighting robots and glass windows that allow you to see edibles being made. The Santa Ana location, which was four times larger than an average Trader Joe’s, had an interactive wall of TV screens, a Volkswagen bus that emits smoke, and enough props to fill a TV set.
Yet now, Planet 13 Santa Ana has joined the trash heap of failed corporate cannabis schemes in California that raised billions of dollars of investor cash only to fizzle out, a depressing pile that now includes MedMen, Herbl and Flow Kana. Planet 13 Holdings is still operating in Las Vegas and Florida, but the demise of Planet 13 Santa Ana comes as the larger company struggles to stay alive, posting years of losses as its Canadian stock valuation dropped from a high of $1.3 billion U.S. dollars in July 2021 to just $50.18 million this week.
There’s heavy irony in Lewis purchasing the store. He stood in front of Planet 13 Santa Ana’s giant red globe water fountain four years ago and predicted it would fail, posting a video to LinkedIn in which he declared: “This thing right here is just a stupid model. Just keep chasing waterfalls, it ain’t gonna work.”
Planet 13 appears to have been bleeding money on the store the entire time. In a November earnings call, interim Chief Financial Officer Steve McLean said closing both their California production facility and the Santa Ana store would save Planet 13 Holdings $300,000 to $350,000 a month in cash. On the same call, co-CEO Bob Groesbeck said the exit would eliminate “a persistent cash drain.” The company didn’t specify on the call how much the Santa Ana store alone was losing, and executives for Planet 13 did not respond to repeated questions from SFGATE for more information.
Lewis declined to say how much Catalyst paid for the store, but McLean said in the November call that the sale would not “materially impact” Planet 13 Holdings’ cash position, implying they did not get very much money for the store.
Lewis said he felt vindicated being able to buy the store after originally calling it out.
“If I’m being real,” Lewis said, “to look at something before it started and say that’s a terrible idea, and then almost five years later buy it back for pennies on the dollar, is kind of a cool thing.”
