As marijuana laws have relaxed, the pot trade has become a legitimate industry and some cannabis-related companies, including Nevada pot superstore operator Planet 13, have gone public, allowing investors to purchase their shares. Investing in cannabis companies has been complicated, however, by the fact that U.S. federal laws still prohibit marijuana. That has kept their shares from being listed on U.S. exchanges. Shares of Planet 13 are listed on the Canadian Stock Exchange and also cross-listed on the U.S. over-the-counter (OTC) market. U.S. investors can purchase Planet 13 shares through international brokers as well as U.S. online and traditional brokers.
Consider working with a financial advisor before investing in new or unregulated sectors.
Planet 13 Background
Planet 13 cultivates, manufactures and retails cannabis products under several brands. It grows marijuana under its Medizin brand and manufactures Leaf & Vine concentrates, Dreamland marijuana chocolates and HaHa cannabis gummies. Planet 13 is the name of its 112,000-square-foot Las Vegas superstore that includes a café.
Planet 13’s superstore business model is different from its competitors in the business. Other firms have adopted a strategy of opening many small dispensaries rather than a single large location. The company’s expansion plans include California. Since Nevada’s recent legalization of onsite consumption, it’s also adding an onsite consumption lounge to the Las Vegas facility.
Planet 13 is smaller than industry leaders, including Massachusetts-based Curaleaf, which has more than 100 dispensaries in 22 states and revenue for the first quarter of 2021 of $260 million. Planet 13, by contrast, reported $23.8 million in revenue for the first quarter of 2021.
Because Planet 13 is listed on the Canadian Stock Exchange, it doesn’t submit filings to the Securities and Exchange Commission as companies listed on the NYSE and Nasdaq must do. Instead, it sends filings to the Canadian Securities Administrators (CSA). Investors can access filings by Planet 13 through the online System for Electronic Documents and Retrieval (SEDAR) system operated by the CSA.
How to Buy Planet 13 Shares
Canada was one of the first industrialized nations to legalize recreational marijuana. U.S. federal law still outlaws possession and use of the herb, although that may be changing. Cannabis enterprises can operate under state laws that legalize marijuana but the federal prohibition means companies cannot go public and list their shares on U.S. stock exchanges. Planet 13’s CSE ticker is PLTH. U.S. investors can purchase shares of CSE-listed companies using international brokers. However, not all brokerages can perform those transactions.
To make it easier for U.S. investors to invest, Planet 13 is also cross-listed in the United States on the over-the-counter (OTC) market under the symbol PLNHF. This allows U.S. investors to purchase shares using any brokerage that accommodates OTC trades.
Not all U.S. brokers permit trades of OTC-listed stocks. The popular trading platform Robinhood, for instance, does not support OTC trades. Webull is another trading platform that does not include OTC stocks in the securities its users can trade. On the other hand, many full-service brokerages, such as Schwab, Fidelity and Vanguard, accommodate OTC stock trades. Many of these brokerages offer their services online, and investors can also trade OTC stocks by phone or face to face by using a broker at a traditional brokerage. Some online trading platforms also accommodate international trades, so investors can purchase shares of Planet 13 on the CSE. These include InteractiveBrokers, Questrade and Zacks Trade.
Another way to invest in Planet 13 is to purchase shares in a mutual fund or exchange-traded fund (ETF) that includes shares of the cannabis company among its holdings. Horizons US Marijuana Index ETF, for example, is the single-largest shareholder in Planet 13. Investing in a cannabis ETF will also add many other cannabis companies to the investor’s portfolio, improving diversification.
While Planet 13 is not currently eligible for listing on U.S. exchanges such as the NYSE and Nasdaq, which is short for National Association of Securities Dealers Automated Quotation, that could change. One of the company’s competitors in the cannabis industry, Green Thumb Industries, for instance, was able to conduct an initial public offering in 2021. There is also legislation pending in the U.S. Congress that would remove marijuana from the federal list of controlled substances, which could open the door to cannabis companies listing on U.S. exchanges.
Planet 13 is a Las Vegas-based cannabis grower, processor and retailer. Its shares are listed on the CSE and cross-listed on the OTC market in the United States. In order to purchase shares of the company on the CSE, U.S. investors can set up an account with an international broker. Or they can open an account with a full-service traditional or online brokerage in the U.S. and traded the shares on the OTC market.
Tips on Cannabis Investing
- Investors interested in trading in cannabis companies that operate in the United States but are listed on Canadian exchanges can benefit from the assistance of a qualified financial advisor with experience trading securities internationally. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors who will help you achieve your financial goals, get started now.
- Though the marijuana industry is a relatively new sector, it’s still wise to conduct thorough research before purchasing shares. You should also weigh the risks associated with investing and whether your current holdings can withstand a potentially volatile pursuit. In addition, be sure to carefully determine how your investment portfolio may be affected by an industry still facing potential legal intervention.
- Before you start investing, you will need to learn how to choose securities that suit your risk tolerance. You can determine your risk tolerance by evaluating your comfort level in certain investments.
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