Planet 13 Holdings reported second-quarter 2026 revenue of $22.9 million, down 14.9% from a year earlier, but with a gross margin gain and a narrower net loss that suggest the multi-state operator's cost discipline is finally showing up on the bottom line. The results, released August 12, arrive as the company works toward closing its previously announced merger with Vireo Growth Inc., a deal that reframes almost everything in this earnings report as a snapshot of a company mid-transition rather than a standalone growth story.
What Actually Moved the Numbers
The revenue decline traces mostly to one deliberate decision: exiting California retail and wholesale. That's not a market Planet 13 lost - it's one the company chose to leave, and the math explains why. California's cannabis market has been ground down by years of price compression, oversupply, and an illicit market that undercuts licensed operators on price without carrying the tax burden. Walking away from that exposure trimmed top-line revenue but helped gross margin, which rose to 53.9% from 43.4% a year earlier. Strip out a one-time $1.0 million reduction in the company's Florida distillate inventory reserve - itself a sign that Florida sales are absorbing excess product faster than before - and adjusted gross margin still came in at 49.5%, a meaningful improvement.
Total expenses fell 17.7% year over year, reflecting company-wide cost and procurement initiatives rather than a one-off adjustment. That distinction matters for anyone reading these filings as a proxy for operational health: cost cuts that stick tend to show up across multiple quarters, not just one.
Florida's Turnaround and What It Signals
Florida revenue grew 17.1% quarter over quarter, and Co-CEO Larry Scheffler pointed to it as evidence the company is stabilizing a market that has been volatile for multi-state operators generally. Florida's medical-only framework, OMMU licensing structure, and vertically integrated business model put pressure on operators to manage cultivation, extraction, and retail all under one roof - a demanding operational lift compared with states that allow more specialization along the supply chain. The May 9 OMMU approval for a BHO extraction facility and the planned Sarasota store expansion both point to a company still investing in Florida even as it retreats from California, a signal that management sees differentiated potential in that market despite its regulatory constraints.
For competitors and suppliers watching from outside, Florida remains a market where inventory management and lab testing throughput can make or break margin. Excess distillate sitting in a vault or budroom inventory doesn't just tie up capital - it can trigger reserve write-downs like the one Planet 13 just partially reversed.
The Merger Context Changes How to Read This Quarter
Co-CEO Bob Groesbeck was direct about the strategic logic behind the pending Vireo Growth combination: scale, purchasing power, distribution reach, and balance sheet capacity to withstand continued price compression. That's a candid admission that standalone operators in mature adult-use and medical markets are increasingly squeezed by wholesale pricing pressure that favors larger, more diversified platforms. Planet 13 skipped its usual conference call this quarter specifically because of the pending transaction - a routine but telling choice, since public companies often go quiet on forward guidance once a merger agreement is signed to avoid complicating disclosure obligations.
Adjusted EBITDA loss narrowed to $0.5 million from $2.4 million, and net loss improved to $5.6 million from $13.3 million. Those are meaningful year-over-year gains, but they're best read as evidence a leaner operation is being prepared for integration rather than as a standalone growth trajectory. For dispensary operators and investors tracking multi-state consolidation, this filing reads less like a turnaround story and more like a company positioning its books for a buyer.
Balance Sheet and What Comes Next
Total assets slipped to $144.3 million from $152.3 million at year-end 2025, while total liabilities rose modestly to $105.5 million. Cash and restricted cash improved slightly to $16.5 million. None of these figures scream distress, but they underscore why the merger rationale centers on efficiency rather than expansion capital. Operators, landlords, and wholesale partners watching this deal close should expect the combined entity to prioritize consolidated purchasing and distribution over new store openings in the near term, a pattern common in cannabis consolidation deals where scale, not square footage, is the objective.