A 16-foot octopus welcomes guests at Planet 13’s new superstore in Santa Ana, California. All photos courtesy Planet 13.
When Planet 13 opened in Las Vegas in 2018, few people besides co-CEOs Bob Groesbeck and Larry Scheffler believed that a 40,000-square-foot cannabis retail store could be successful.
It’s simply too big, the doubters said.
But almost three years later, the superstore has not only proven to be a winning concept, but it’s almost been too successful. At one point, patrons were waiting in line for 90 minutes to get into the building that doubles as both a retail space and an entertainment venue.
“The superstore is a game changer” for cannabis retail, Scheffler says.
The company has increased its efficiency to cut wait times down to about half an hour and is and is in the process of expanding its sales floor from 43 cash registers to 85 to accommodate the 4,000 to 5,000 customers that visit the store daily. By the time the Las Vegas shop is fully built-out, it will be 112,000 square feet and have up to 150 registers.
“We did almost $11 million (in June) with 43 cash registers,” Scheffler says. “We’ve hit $450,000 on a Friday, and that’s about maxed out because there’s only so many people you can get through the store.”
And in early July, Planet 13 opened its second superstore, a 55,000-square-foot retail complex in Santa Ana, California, that takes the original superstore’s made-for-social-media extravagance to another level, complete with an 80-foot digital waterfall, an assortment of interactive components, a classic Volkswagen van and a 16-foot-tall octopus as the centerpiece of the 16,500-square-foot sales floor.
Marijuana Venture spoke with Groesbeck and Scheffler about Planet 13’s success, the expansion into California and the importance of creating a destination experience for tourists and regulars.
Marijuana Venture: What does it mean for Planet 13 as a company to finally open the California superstore?
Bob Groesbeck: It’s obviously the culmination of a tremendous amount of work by a lot of people. We’re very excited to be there, and Santa Ana has been a great community to work with. But it’s new and it’s going to take some time to get good traction and create awareness and create that buzz.
MV: What makes this particular location special, both in terms of the physical location and the design of the retail atmosphere?
Larry Scheffler: We looked at probably over 100 sites in the last year and a half, from San Jose to San Diego. We were about ready to give up in California. Nothing fit the parameters we felt we needed for a superstore.
We knew what we needed to make this a success: the number of homes in the area and being close to different locations where tourists are. The Santa Ana location is eight miles from Disneyland, four miles from the South Coast Plaza — the largest mall in the state — and it’s one and a half stoplights from the 405 freeway leading to all the famous beaches of Southern California. Then we’re looking at the size of the project, with all of the parking, which is very important to us. It’s location, location, location. We were finally able to check off all those boxes when we found Santa Ana.
MV: How much of the design was transferred over from the Las Vegas location and how much was completely new for Santa Ana?
BG: Really, it’s all new. The only thing that was transported to California was the size and the Planet 13 brand. As far as the look and feel of the facility, it’s night and day from Las Vegas. The Las Vegas store is an urban, Las Vegas kind of build, big with a lot of dark colors, whereas California is truly bright and vibrant with high ceilings throughout the complex. It’s really designed to pay homage to the California lifestyle and the openness of the entire area.
LS: Every superstore we open will be different. Not everything is Vegas. When we come into a town or city, we’ve got to blend into the fabric of that community. California has the beach theme, which I think we accomplished. But Boston will be different. Florida will be different. Phoenix will be different. Every one will be different, but we still want to make it a destination.
Marijuana Venture: Obviously the superstore concept is not a business model that can work in every city. Why did Santa Ana make sense for your second superstore?
BG: With Southern California, you’ve got a similar demographic to Las Vegas, and in some respects, it’s even better because you’ve got close to 5 million people in the metro Orange County area, while Las Vegas is about 2.3 million. And Orange County has a similar tourist count as Las Vegas, with the proximity to the amusement park and the shopping and the beaches.
But the tie-in with both is that we’ve got a huge California customer base here in Las Vegas and for the last few years, people have continually asked us, “When are you going to open one of these in Southern California?”
We always said, “Be patient. We’re looking. We want to be in the California market.” It’s just taken a lot of hard work. As Larry said earlier, it was an exercise in frustration going through the multiple locations we looked at before we landed on Santa Ana. We’ve got an internal checklist, and for a location to work, every single box has to be checked. And now it’s incumbent upon us to build it and create the awareness and make it a destination.
LS: We have always said, if all 50 states were legal, we’re probably looking at 12 to 15 superstores. If a city can support a professional sports team, it’ll probably work for a superstore.
Eventually we’re looking at absorbing other MSOs and so on, and those stores have been done a little smaller. So if they built up a brand, maybe we’ll keep the name and put a tag line underneath that would say “A Planet 13 Neighborhood Store.”
Planet 13 executives looked at more than 100 locations in California before selecting the Santa Ana site. The company projects its newest superstore will generate $50 million in sales in 2022.
MV: Considering that Planet 13 now has stores in two tourist hot spots, what has the past year and a half been like in dealing with COVID?
BG: Well, for everyone, it is a nightmare, obviously. For us, in Las Vegas at the time, 85% of our customers were non-Nevadans. And then literally to have an order issued out of the governor’s office that you have 24 hours to close your store, imagine the reaction here. It was, what do we do? We literally went from several thousand customers a day to no customers in the store.
But instead of throwing in the towel, our executive team and our managers really decided, hey, you know what, let’s pivot. Let’s make a go of this. We were very fortunate that our governor allowed us to at least do delivery initially and transition to curbside delivery. So for us, that was a lifesaver. The only problem is I think we had three vehicles and really no delivery department to speak of, so we ramped that up to 30 vehicles in a matter of a couple months.
And that sounds easy in itself, but we couldn’t find dealerships that were open. So it was a nightmare. But we persevered and made the best of it and built a really strong delivery and curbside program that continues in place today.
MV: Does that now complement the retail business now that you’ve invested the resources to build out the delivery infrastructure?
BG: Well, it’s like having another dispensary. Yeah, it actually works quite well. We learned a lot from that and built some great software delivery systems, which we’re implementing Southern California. So if there was one positive of COVID, that was it.
MV: When the first Planet 13 opened, there were a lot of people that were skeptical that the giant superstore business model could work for cannabis retail. Why did you believe that the superstore could work?
LS: Maybe we didn’t know any better. Bob and I, together, have been in Las Vegas for over 100 years. All we knew was Vegas — a destination for entertaining people, one venue trying to outdo the other one. So we thought that’s normal. Why wouldn’t anybody do it?
We decided, why are we going after 2.3 million people? Why aren’t we going after 55 million visitors? And we did our zoning checks. We found out there was a donut hole that was zoned around the gaming corridor. You can’t be in the gaming corridor. We then literally went door to door to find out who we could buy out, how we could convince somebody to move.
And we thought, I can’t believe somebody hasn’t tried to copy us. It just seems like such a natural that everybody wants to be entertained. And we’ve seen that from being in Vegas as long as we’ve been in Vegas.
We did have a lot of people — almost everyone — say, “I don’t get your vision, guys. I don’t think you’re going to make it.”
One of the biggest CEOs of one of the biggest cannabis companies was there when we first opened, then walked outside and was overheard by one of our bankers saying, “I give this place six months. It will be a Korean barbecue restaurant.”
BG: Another thing we should touch on is that the Nevada Legislature just passed legislation to allow lounges. So we’re working through that with regulators now to create a regulatory framework, and it’s our intent to build something really special that enhances this cannabis experience here at the entertainment complex. So I just say stay tuned, because if they thought we were crazy in 2018, we’re going to do something truly monumental in this space and we’re really excited about what that will entail.
MV: Was the prospect of creating a consumption lounge always a part of your plans?
BG: We’ve really worked on this for the last three years. And the reason it is so important to us is, like I said earlier, that 85% of our customers are non-Nevadans. So if you’re 21 and older, you can legally purchase products, but you’re prohibited from legally using it anywhere in the Strip corridor. A lot of our customers will come back and say their products were confiscated or charged extra cleaning fees or just generally harassed.
Now we have the ability to actually provide that additional amenity that would give them an avenue to use it legally in a really nice environment.
MV: Can you talk about new markets you’re targeting or what we can expect from future expansions?
BG: Well, we can’t talk about a specific project. We’ve got a few in the works at different stages. We’re obviously looking to fill out our California asset base and looking at cultivation and production opportunities there. And we’re looking at retail opportunities from the “Neighborhood” standpoint that would fill out the platform.
But we’ve spent a lot of time over the last few months looking at opportunities on the East Coast, looking at the Northeast section of the country all the way down to Florida, as well as Phoenix, California and spending time looking in the greater Chicago area. For us, these things are just a lot of work. It’s not like siting a traditional neighborhood store. They take at least five times longer.
This interview has been edited for length and clarity.