Diversify and Find Out: Can Vegas Superstore and Florida Sales Boost This Weed Penny Stock? – Curaleaf Holdings (OTC:CURLF), Ayr Wellness (OTC:AYRWF)

Planet 13 holdings PLNHa major player in cannabis retail and cultivation, saw its shares fall 29% over the past 30 days, reflecting broader market pressures. However, the company represents an attractive opportunity for investors due to its lower valuation relative to peers and significant growth prospects, particularly in Florida.

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Rating: Discounted yet attractive

PLNHF trades at $0.40 per share, with an enterprise value (EV) of $137 million, taking into account net cash of $19 million, net leases and tax liabilities. A sales multiple is a common valuation metric that compares a company’s market value to its sales. This puts PLNHF at a sales multiple of 1.1, lower than its competitors: Green Thumb Industries GTBIF And Curaleaf CURLFboth at 2x and AYR Wellness AYRWF at 1.5x. PLNHF’s lower multiple suggests that the company is more cheaply valued compared to these competitors, meaning investors are paying less for each dollar of PLNHF’s sales compared to the others.

Zuanic & Associates notes: “PLNH trades at 1.1x current sales, versus 1.5x for the group and 2x for companies such as Green Thumb and Curaleaf.”

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Growth catalysts and regulatory risks

While PLNHF lacks the regulatory unlock option in Ohio and Pennsylvania, where potential legalization could provide future upside, the company’s expansion in Florida is expected to drive growth. Zuanic points out: “With multiple organic growth catalysts and a strong balance sheet, PLNH’s downside risk is minimized relative to peers.”

In Florida, the company plans to open eight new stores and increase crop yields by 40% by the end of 2024. PLNHF is also expanding its retail operations in Nevada.

Zuanic said PLNHF has a solid financial position despite failures in states like Ohio and Pennsylvania.

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Conclusion: Think long-term

Despite short-term challenges, PLNHF’s strategic growth initiatives – particularly in Florida and Nevada – position the company for long-term success. With an attractive valuation discount relative to peers, Planet 13 represents a compelling opportunity for investors looking to capitalize on the development of the cannabis sector.

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