Planet 13 Stock (CNSX:PLTH) (OTCMKTS:PLNHF): Is It A Buy Or Sell?

The marijuana stocks universe presents a variety of choices. But not all choices are great. You want to put your money in a marijuana company with a strong competitive advantage, great growth potential, and solid financials. If you are looking for a great pot stock to buy heading into 2020, Planet 13 stock (CNSX:PLTH) (OTCMKTS:PLNHF) is a strong candidate.

About Planet 13 stock

For investors who may be learning about Planet 13 Holdings for the first time, this is a vertically-integrated marijuana business. It is one of the leading marijuana companies in the Nevada market. Planet 13 Holdings is engaged in the cultivation, processing, and retail of marijuana products and it already has several marijuana brands to its credit. It operates the largest marijuana retail outlet in the world.

What you should know about Planet 13 stock

For marijuana sector in general, 2019 has generally been a rough year. Many marijuana stocks have dropped to multiyear lows. As the charts show, Planet 13 Holdings stock has been through a lot of ups and downs this year. Still, those swings have delivered decent returns for investors who know how to play stocks like Planet 13 Holdings in volatile periods.

Presently, Planet 13 Holdings stock is trading at $1.64. The stock began the year at $1.00. It jumped to $1.64 in February, thereby returning nearly 65% in space of a few weeks. There was a period of profit-taking following the January surge, resulting in the stock coming down to $1.25. From there, it began moving up again, reaching its 2019 peak of $2.62 in April and delivering a return of 110% to investors who picked up the stock at its previous low.

Why Planet 13 stock is poised for greater highs

Stock up and down moves typically create short-term profit opportunities for investors who can play a volatile stock market to their advantage. But Planet 13 Holdings is more than a short-term profit stock. Here are three reasons you may want to add Planet 13 Holdings stock to your portfolio going into 2020.

• No other company except Planet 13 Holdings owns and operates the world’s largest marijuana retail outlet

In November 2018, Planet 13 Holdings opened SuperStore, a marijuana retail complex just west of Las Vegas strip, Nevada. Planet 13’s SuperStore is a 112,000 square feet facility that also hosts a restaurant in addition to marijuana shop and on-site marijuana processing unit.

Sales have been booming at the SuperStore. Through the facility alone Planet 13 fills about 10% of all marijuana sales in the entire state of Nevada. Through its SuperStore facility, Planet 13 Holdings has positioned itself well to take full advantage of the growing demand for marijuana products in Nevada. Nevada’s marijuana market, comprising sales of medical and recreational marijuana products, generated $580 million in revenue in 2018, ArcView Market Research and BDS Analytics estimates show. The market will grow to $795 million by 2022.

Having seen the early success of SuperStore, Planet 13 plans to open another world-class marijuana retail complex. It plans to open what would be the world’s second-largest marijuana retail outlet in Santa Ana, California, next year. The Santa Ana complex will sit just a few miles from busy sites such as the South Coast Plaza Mall and Disneyland. California has one of the fastest-growing marijuana markets. California’s marijuana sales hit $2.5 billion in 2018 and will jump to $5.6 billion by 2022.

• Planet 13 Holdings is well-capitalized to pursue its development dreams

Presently, credit funding opportunities are limited for marijuana companies in the United States. That is because big banks have generally shunned doing business with marijuana companies for fear of running afoul of federal regulations.

Congress is working on a solution to this challenge. However, Planet 13 Holdings isn’t waiting for Congress to pass laws that would make obtaining loans from big banks easy before it can develop its business and create value for shareholders. Planet 13 is one of the few well-capitalized marijuana companies. The company disclosed in its third-quarter report that its current capital position allows it to complete all its growth initiatives.

• Planet 13 Holdings is a marijuana company that investors can trust

Investors may not have any doubts regarding financial services or technology stocks because these are well-established industries with clear regulations. But marijuana is different. The industry is new and regulation is far from complete, especially considering that marijuana remains federally illegal in the United States.

Planet 13 Holdings is doing a great job to overcome doubts that investors may have about its business. Every few weeks, Planet 13 issues a press release to update investors on its operations. This past November, for instance, Planet 13 issued five press releases. That ensures that investors stay up-to-date with the directions the company is taking and can make informed investment decisions. To win over more investors, building trust is important and Planet 13 does just that.

Bottom line

Planet 13 stock stands out in the marijuana universe as a stock that can deliver excellent returns. Now trading close to its multiyear lows, Planet 13 stock looks primed for a big breakout.

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Disclosure: We have no position in Planet 13 stock and have not been compensated for this article.