The coronavirus pandemic is not only among the biggest health crises in history, but it has also come as a major disruptor for businesses as well. The cannabis industry has had its share of disruptions as well, but there is one company that could be hurt considerably due to the pandemic, and that is Las Vegas-based Planet 13 Holdings (CSE:PLTH) (OTCQB:PLNHF).
Major Factors to Watch
Travel has pretty much come to a halt, and businesses that are dependent on tourism have suffered considerably. Hence, cannabis company Planet 13 Holdings, which is also significantly dependent on tourism to Las Vegas, could be quite vulnerable at this point.
The Las Vegas Convention and Visitors Authority revealed that tourism to the city in April nosedived by as much as 97%, and that is an indication of the problem. The company’s SuperStore in Las Vegas is not only a cannabis dispensary but offers a unique experience due to the presence of a cafe and a restaurant, among others.
Back on March 19, Planet13 shut down its store and went into an online-only model. However, it has now started limited store sales after some relaxations were announced by the Nevada government. The immediate well being of the company is going to depend on its ability to generate positive cash flow.
If it can generate positive cash flow during this period, then it would not have to dip into its cash reserves of $13.9 million. However, the company’s co-Chief Executive Officer Larry Scheffler said that the delivery based model would significantly cushion the impact of lower tourist traffic.
Casinos opened from June 4, and it should be noted that Nevada only had 10000 cases, unlike hot spots like New York. The Planet 13 stock could have been a stock worth owning in normal circumstances due to the progress made by the company over the past year. However, the coronavirus pandemic has come as a bit of a problem.