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spk08: Hi, everyone. Welcome to the Planet 13 Holdings 2020 Third Quarter Financial Results Conference Call. As a reminder, this conference call is being recorded on November 24, 2020. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for research analysts to queue up for questions. If anyone has any difficulty hearing the conference, please press star zero at any time for operator assistance. I will now turn the call over to Mark Kindersma, Head of Investor Relations for Planet 13.
spk04: Thank you. Good afternoon, everyone, and thanks for joining us today. Planet 13 Holdings' third quarter 2020 financial results were released today. The press release, financial statements, and MD&A are available on CDAR, as well as our website, planet13holdings.com. Before I pass the call over to management, we would like to remind listeners that portions of today's discussion include forward-looking statements. There can be no assurances that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances, or results will materialize. As a result of these risks and uncertainties, the results or events predicted in these forward-looking statements may differ materially from actual results or events. Risk factors that could affect the results are detailed in the company's public filings that are made available on CEDAR. We encourage listeners to read those statements in conjunction with today's call. The forward-looking statements in this conference call are made as of the date of this call. Plan 13 disclaims any intention or obligation to update or revise such information, except as required by applicable law, and does not assume any liability for disclosure relating to any company mentioned herein. Plan 13's financial statements are presented in U.S. dollars, and the results discussed during this call are in U.S. dollars, unless otherwise indicated. On the call today, we have Bob Grosbeck, co-chairman and co-CEO, Larry Scheffler, co-chairman and co-CEO, and Dennis Logan, CFO. I will now pass the call over to Larry Scheffler, co-chairman, co-CEO of Plant 13 Holdings Inc.
spk07: Thanks, Mark. Good afternoon, everyone, and thank you for participating in our third quarter call. Q3 was our best quarter ever, and a demonstration of the resiliency, flexibility, and strength of our business model, Superstore, and Planet 13 as a whole. Despite the ongoing pandemic and Las Vegas being at less than 50% tourist occupancy compared to the same period a year ago, we generated $22.8 million in revenue, 36% higher than our highest quarter ever. Once again, we are responsible for 9% of the state's total sales. And this is continuing into Q4, with October posting another month for over $7.5 million in revenue. This improvement has been driven by operational changes we made throughout Q2 to adapt to COVID-19. We introduced delivery, which contributed $3.3 million in the quarter exclusively from local residents. We improved superstore throughput, refined marketing towards locals and tourists, resulting in higher traffic and ticket and $18.5 million of revenue from the Superstore. We've also launched our brands in the rest of the state through our wholesale channel, adding an additional $1 million in revenue during the first full quarter of the wholesale sales. The Superstore's performance has given us the confidence to continue to build on what is working. On October 13th, we announced the addition of non-cannabis retail, continuing to build out the Superstore. The non-cannabis retail space will sell Planet 13 merchandise and general sundries. In addition to the non-cannabis retail, we're also taking the opportunity to double the dispensary floor and add an additional 40 points of sale and another entertainment feature. We're consistently seeing lines out the door on weekends and wait times in excess of 30 minutes. Expanding the dispensary floor and adding points of sale will increase Customer throughput resulted in maximizing sales potential and a better customer experience. These are just a few of the many planned upcoming expansions at the Superstore. We still have 30,000 square feet of unbuilt space that is being held for a cannabis consumption lounge, a nightclub, and other retail opportunities. Our focus remains on creating one-stop shop convenience for tourists who are looking to enjoy their visit and giving customers more reasons to visit the Superstore and to stay longer. On the local front, we recently opened our medicine dispensary. The medicine dispensary did 4.9 million in the last quarter it was open. Since then, we've seen strong Nevada market growth and the Allegiant Stadium where the Raiders play. They opened a couple blocks away with potential tailgate locations surrounding our dispensary. Along with medicine, our delivery has remained strong. and is an active part of how we're expanding our share of the local market. Overall, I'm very, very proud of the way the team responded to the challenges this year. Their hard work, innovation, and resilience has helped us return to our position in Nevada with retail sales, accounting again for over 9% of the state sales through Q3. With the medicine opening, we expect to continue to build on that dominance. With that, I'll pass it off to Dennis to discuss our financials.
spk09: Thanks, Larry. Before I begin, just like to remind everyone that the numbers on the call today are in U.S. dollars unless specifically stated otherwise. As Larry mentioned, Q3 was the best quarter in the company's history. Across the entire business, the company recorded $22.8 million in total revenue, $3.3 million from delivery and curbside, $18.5 million from the superstore, and $1 million from the wholesale sales channel. The superstore's performance, despite the limited tourist traffic on the Las Vegas Strip, has been tremendous. Delivery and wholesale are essentially new businesses for us, and the quick reception and rapid growth of those platforms has been fantastic. Gross margin during the quarter was 56.9%, returning to historical levels as we reopened the superstore during the quarter to in-person sales. We've seen the cost of internal cultivation continue to trend down as we've increased yields and cultivation efficiencies. This momentum was somewhat impacted by the addition of a new cultivation facility during the quarter, but we are already seeing improvements in both yield and cost at the new facility in Q4 2020 and expect continued improvements as we fully implement all of our cultivation best practices across both locations. We are also seeing margin enhancement as more revenue is derived from the sale of in-house brands in the superstore. This margin enhancement is partially offset from the lower margin revenue coming through the wholesale channel. Sales and marketing expense during the quarter was $900,000. This was up $200,000 from the prior quarter. Q2 was the low point due to the impact of COVID-19 lockdown, but still Q3 was still well below the historical levels of approximately 1.2 million in prior quarters. The company returned to a more balanced sales mix targeting both tourists and locals in the quarter. The company spent 6.2 million on G&A in the quarter, which was up from 5.5 million last quarter. This increase was a result of adding staff and investing in our organization to support the medicine dispensary, the wholesale fulfillment channel, and the planned opening of Santa Ana. As of September 30, 2020, the company had a cash balance of $56.7 million, an increase from $22.7 million as of June 30, 2020. The cash increase was a result of $3.8 million in positive cash flow from operations, $31 million in financing from closing of two-bought deals during the quarter, and this was offset by $4.1 million associated with the purchase of assets and other costs capitalized to the cannabis licenses acquired during the period. Since September 30, the company has closed an additional $28.8 million in Canadian dollar gross proceeds and saw the exercise in the additional 400, I guess, yeah, the 400, we had more warrants exercised today, so the number's in the 420,000 range, and 100,000 options. that brought in an additional $1.67 million in cash. So as of today, we have approximately U.S. $71 million in cash, and this is after making a $7.2 million tax payment on October the 15th. And as a reminder, our current growth plans require about $8 million in CapEx for Santa Ana, $2 million for upgrades and additions at the Superstore that Larry has mentioned, and another $500,000 on improvements at the recently acquired cultivation facility. The rest of the capital we have is earmarked for expansion initiatives. And with that, I'll pass the call back over to Bob.
spk01: Thank you, Dennis, and good afternoon, everyone. The Q3, as indicated, was a fantastic quarter for Planet 13. The superstore is performing well, our expansions are progressing, and our brands continue to gain popularity in the wholesale markets. As Larry mentioned, in the first full quarter of wholesale, we saw over $1 million in sales. Our HaHa gummies particularly have been a resounding success, taking multiple spots for the top edible SKUs in Nevada. Encouraged by this, we've expanded our SKU selections with HaHa beverages, which were introduced in October, and now our HaHa sour gummy line, which is being introduced to the Superstore this week, actually, and is expected to be rolled out statewide shortly thereafter. We've expanded from 20 dispensaries carrying our products to over 40 dispensaries in the state now. More exciting than the new dispensaries carrying our products is the reorders we are seeing coming in from existing clients. It's clear our products are resonating with our customers. The performance by our team and the results from the wholesale sales really have reaffirmed our decision or confirmed our decision, rather, to invest and build our in-house production facility and our investment in additional high quality indoor cultivation. As a reminder, we purchased additional cultivation in July of this year. We expect to finally close that transaction within days. We've ticked off all of the closing conditions and are simply waiting for Clark County to issue a business license. As part of the terms of the agreement, we immediately took overrunning the facility and are making a string of upgrades to reconfigure it to our needs and especially for our unique medicine strains. We are well on our way with those efforts and expect to see high yields from our incredibly popular strains in the near future, allowing us to expand our flower lines. Overall, in-house products were responsible for about 25% of our sales, which puts us well on our way to reaching the 50% target we've set. In California, our Santa Ana Superstore is progressing nicely. We are finishing up with the permitting process and expect construction to start in early January, putting us on track for a projected opening in the first half of 2021. The California market has seen strong growth over the last couple of quarters as new regulations have helped to shift customers from the illicit market to legal channels. We're excited to see that change. We're also excited to bring the Planet 13 experience to California and introduce new cannabis connoisseurs to a unique cannabis shopping experience. I think we've also benefited from the crash course we received in cannabis delivery over the last two quarters here in Las Vegas, and we think those experiences will bode well as we transition into California. This has been an incredibly productive year for Planet 13, as I've mentioned. We've withstood the greatest possible macro headwinds, significantly de-risking our business model. We've diversified our Nevada operations by growing local sales with curbside pickup, delivery, and now medicine reopening. We're building a name for our brand and driving growth through wholesale. We are well on our way to our first out-of-state expansion and are armed with a substantial war chest to go about and pursue those additional opportunities. With that said, I'd again like to thank everybody for participating, and I'd now ask the operator to end the call and open the lines for questions. Thank you.
spk08: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.
spk03: Thank you.
spk08: Our first question comes from Doug Cooper with Beacon Securities. Please proceed to your question.
spk10: Hi, good afternoon, guys. This is a great quarter. Let me start out with the margins, Dennis. You had that margin 27.2% versus 20.2% last year, so 700 basis point improvement. Can you sort of indicate how much of that was due to just increased volume in operating leverage and how much maybe was due to the vertical integration in your own products?
spk09: Doug, you know, we've bifurcated it a number of ways, I guess, to get as granular as we can. As we move towards our target 50% vertical integration, you know, we're about halfway there now, so I would say a good chunk of that margin improvement, probably a little bit over half of it, has come from that vertical integration. And then the balance of it is coming from, you know, just the success of the store the larger ticket sizes and the return to that tourist customer where we get higher margin business. So our curbside, I guess it's a testament to the fact that we have curbside and home delivery that are targeted to locals. And so those margins are lower, but that lower margin is offset by the higher percentage of in-house products that we're selling through those channels as well. So it's kind of a double whammy on that one.
spk10: Right. So what do you think, you know, if you get to, your in-house products get to 50%, including, I guess, most particularly your own flower, more of your own flower with the new cultivation facility coming on, and then obviously more scale, what do you think even down margin can get to?
spk09: Without having to, you know, continually update that, I mean, we've talked about in the mid to high 30s, as where we think it realistically can get to without a lot of additional costs that we have to spend or capex we have to spend. That's our target.
spk10: I noticed that flour represented 61% of sales in the quarter versus pre-COVID it was in the low 40s. Is that still a reflection of the local? Would it be a reflection of more of the local traffic in your mix maybe than historical?
spk09: Yeah, that's part of that because on the curbside and the home delivery, that is the case where the preference from the local customer is more towards that flour market. As you know, but as the tourists come back, they tend to buy the higher margin non-flour products that we sell in terms of our in-house brands. So the margins there are pretty lucrative for us too. But that mix on the flour side is driven by that local customer for sure.
spk10: Right. And so part of that, to get to the mid to high 30s, could it even, you know, I guess with more edibles or concentrates, it could help to get there as well. Medicine. So you've reopened 4.9 million, I think, was the last quarter, Larry said in his speech. Given, I know Nevada's grown, but there's been a number of new stores open as well. uh, I'll be at one of your competitors is about a mile away. It did very well in the quarter as well. Can you speak to what your expectations are? Can you match where you were or do you expect, um, you know, to be more pressured in terms of the competition and cycling off obviously some to the superstore in the past?
spk09: Yeah. I'm going to turn that one over to Bob for that.
spk01: Yeah. I'm happy to address that. Doug. Thanks. Um, Yeah, there's going to be a bit of a ramp-up. We expected that. I mean, the store's been closed for two years now, basically. You know, the timing on the opening, you know, was a bit longer than we'd anticipated with the regulators. But, you know, now we're open. The store is literally continuing to be stocked as we were on this call. So the full rollout and the launch with the advertising and messaging on the reopening really starts in earnest later this week, Friday to be exact. But we're very excited about what the future holds. Since we reopened, we've got a $2 billion stadium down the street from us. And we've got significant improvements to the 215 freeway system that have just finished. So it's easier than ever to get in to our store. So a lot of upside there. I'm confident that, again, with a brief ramp-up period, we'll get back to the numbers that we were looking at when we closed in October of 2018.
spk07: Right, now let me just add, this is Larry, that that competitor you're talking about was not a competitor when we were open. They became our success at that location because we had to move our license. When we're back, we'll take over control of that area just like we did before, and it'll be just as successful as before. Unfortunately, to their detriment, but given how they're good people, our location is far superior.
spk10: Your corner boys are going to be back. you have your wholesales and 40, 40 other dispensaries. I think that that's about two thirds of the, of the state's dispensaries. Can you, can you get more? Is this the, you know, the 40 best ones and is now just a question of improving same store sales at those dispensaries and how big do you think the wholesale business can be? And I'll leave it there.
spk01: Well, again, Doug, it's Bob. I certainly think there's room for additional growth. And as you know, we've got quite a few new recreational licenses will be coming into the market here over the next 12 to 18 months. So there's a lot of upside there. There's no reason we can't be in two-thirds of those stores as we continue to grow. We're excited about that. Our team tells us they're getting very positive feedback from the stores that we're not in, that they're interested in looking at our product lines. So they're going to keep pushing, and really the proof is in sales, and they see what's happening with other stores that are carrying our product lines, and they're looking at the sell-through rates. So a good business person is going to take advantage of that as well. So there's plenty of room for growth. Great. Thanks very much, guys.
spk10: Thank you, Doug.
spk08: Thank you. Our next question comes from Bobby Burleson with Canaccord. Please proceed with your question.
spk11: Hey, guys. Thanks for taking my questions. So, you know, just thinking about margins again, but maybe honing in a little bit more on wholesale, kind of curious, you know, where you see those margins going with the additional cultivation coming online?
spk09: Yeah, so Bobby, it's Dennis. So the additional cultivation coming online, when we first took it over, we were utilizing some of the flour that was in the facility and the inventory that we acquired as part of that asset acquisition. We pushed that through our own production facility and so got some great margin enhancements there on our in-house products, using it for the ha-ha gummies, etc., You know, going forward as we move our own strains into that facility, there'll be less opportunity to use the flower. I guess I could spin it the other way. All of the flower that we can grow in that facility will be sold as premium flower in the store and both at the superstore and the medicine store. And so it's a higher margin game for selling that flower. You know, we were 8% of revenue coming from our own flower in the second quarter. We should see that, you know, kind of more than double to 16 to 20% with the addition of this new cultivation capacity. And it will be in that premium flower category. So I think the margins will be a lot better than what we were getting just running it through and making our own edibles and concentrate products.
spk11: Okay, that's helpful. So it sounds like the margin opportunity is really in the superstore, obviously, as you mentioned. move that premium flower in and get more of your own shelf space with house products.
spk09: For both, well, I guess for both that and the medicine store, because that will add, I think we'll sell the majority of our products. I think medicine will be majority of our products in that store and not as many third party because it is more of a local market.
spk11: Perfect. And then just curious, you know, with expansion initiatives beyond Santa Ana for similar, you know, large format, you know, exceptional experience stores. You know, what kind of, I guess, what kind of costs are you seeing out there if you had to compare, you know, other metros you're looking at to the kind of costs you've incurred and you expect to incur both in Las Vegas and Santa Ana for building out, you know, large format stores? Are there big kind of ranges that you're looking at in terms of you know, the cost of land or labor or, you know, other inputs?
spk09: Yeah, I think the big cost swing, it is a broad range, as you mentioned. I mean, the big issue for us is, is it an existing operator with an existing storefront that we're buying and then going to move? Or is it, do we get a license through another means or a license from a party that hasn't opened yet? So it's quite a broad spectrum where we're, looking at leased land or leased assets mostly. So we're not going to buy land or buy a building, but we lease the building. So we're partnered with a couple of national real estate groups that have primary locations in the markets we want to be in. And it's just a question of how we go about getting licenses in those individual markets and moving them into the locations that we want. So It's going to be a bit of a mix depending on the state and the city we end up in or the cities we end up in.
spk11: Great. So if we start thinking about the growth on top of the kind of 2021 expectations, I mean, obviously we'd get a full year of Santa Ana in 2022. But as we start to layer additional stores potentially onto your forecast, how much dry powder really is that $70 million and kind of the cash generation between now and when you might start building things out is that? Are you using a mix of cash and stock? It seems like a significantly large amount of dry powder relative to kind of the revenue footprint you guys should have organically, I guess, in 2021.
spk09: Yeah, I mean, we intend to use cash and stock to get into the markets we want to be in. If we look at Santa Ana as an example of the mix of cash and stock, if we can replicate that deal then the 70 million in dry powder gets us a significant number of stores. I don't think that we'll get the, you know, I don't think we'll be able to find as good of a deal that we did in Santa Ana going forward, depending on the markets, because there are lots of competition in some of the markets we're looking at. So, but suffice it to say, I think we can at least open, you know, four more stores with the 70 million thereabouts.
spk11: Thank you. That's helpful. And is there a lot of emphasis now being placed on trying to get access to more cultivation assets internally in California going forward? What's your thought on how important that might be over the medium term?
spk09: That's going to depend on the market we're in. If you look at, as you know, the various states have very different supply-demand dynamics in them. A lot of them right now are cultivation-constrained. Does that stay the case 18 months from now as a lot of these cultivation facilities come online in the various markets? It's going to depend. Obviously, if we can be vertically integrated in the markets we go into, we'll go into markets retail first, definitely have production facilities, extraction facilities built out And then in the markets where we think that we need to have that security of supply, then we'll definitely look at the cultivation. So some of the opportunities we're looking at are fully integrated. Others are, you know, let's get in retail only in this state and see where it goes based on what we think the supply and demand dynamics are in those markets.
spk03: Great. Thank you. Thank you.
spk08: Our next question comes from Greg Gibbous with Northland Securities. Please proceed with your question.
spk06: Hey, guys. Thanks for taking the questions and congrats on the strong results this quarter and into October as well. Regarding the current plans that are underway to double the sales floor to increase the customer throughput during those peak times like you were saying, How much, I guess, of an uplift in daily transactions would you expect to see there, maybe if kind of all else is equal? And, you know, maybe it would help if you could elaborate maybe on the degree to which you see potential customers maybe being discouraged from visiting or shopping during those peak hours?
spk07: Well, this is Larry. Let me answer that. Again, we probably can max out here after COVID, pre-COVID, I mean, during COVID, we can Going to max out probably $400,000 only because we're at 50% capacity. But on a weekend when we're busy, we probably can't hit past 450, 475 a day when we're busy, only because we can't get that many people through without having the long lines and the wait times where I hate lines and people just get disgruntled and want to leave. I think with adding 40 more points of sale, adding another entrance in, another check-in in, which we're doing all of those, we then, I think, could max out somewhere between $800,000 and $900,000 a day on our busiest days, the Fridays and Saturdays, once we get all the tourists back and everything going on. We know we have to do it or we will be hitting the wall. We were just expanding so much, even with COVID, we're still expanding. Can you imagine when this COVID is over? And again, we're just hitting less than 3% right now of the tourists that were coming to town pre-COVID. Less than 3% come here. We even just doubled to six when COVID's over. We will definitely need to double the dispensary. I can even see in the future that if we continue to grow that way we were going, and people keep advertising themselves on how well they love the experience here and the shopping experience and the whole situation, the entertainment complex. I could literally almost see us taking half of the site and maxing out probably with the Grand Hallway at almost 60,000 square feet. That's, again, long-term dreams. I'm always optimistic, though, about it. And we'll start with our first expansion, see how it goes. And I think you'll see us enlarging again here shortly.
spk06: Got it. Yeah, that's extremely helpful, Larry. Appreciate that. And I guess part of that kind of relates to my next question, just being, I'm sorry if I missed this, but I think you said it was the estimate of kind of the breakdown of tourists versus local this quarter. I guess just kind of rough estimates there. And then Also kind of wondering, I know the medicine store heavily skewed towards locals. Just kind of wondering what transaction sizes compare with the superstore versus medicine. And maybe what the exact breakdown is in terms of the customer split in terms of locals and tourists. Just trying to get a better sense of what that potential uptick in traffic would look like once travel resumes.
spk01: Well, hey, Greg, it's Bob. Let me jump on this and then Dennis can fill in this. details if necessary. But pre-COVID, we were probably doing about 85% of our customers were non-Nevada. So, you know, since the latter part of March when we closed, we've really seen that reverse. So I would say, you know, roughly 80, 85% of our customers are now locals. And even more so in the last couple months here this quarter and now with the governor's recently announced pause, you know, a lot of the major casinos on the Strip now are open four days a week. And now we've got additional lockdowns with clubs. The fourth quarter's historically been slow in the town, but it's been historically slow now with COVID and, you know, with that transition. But I believe, as does Larry, once this lifts and we're excited, we think, you know, by the second quarter of next year, you know, things are going to open up considerably, we're going to see that rush. There's a huge pent-up demand. And... We know and we're very confident with that expansion, we'll be able to service our customers and all of our customers. With medicine, it's a little different. We just reopened it a couple nights ago with a soft opening. It's going to be a little different to give us a little bit of time on that, but if you look historically at what the average basket size was there, considerably lower than what you would have at the superstore. I'd put it in the $75 range probably. From a historical perspective, I'm not quite sure where it's going to come out now. But again, the location is fabulous. The facility is fabulous. And the product lines that we carry are outstanding. So we have every reason to believe that that store is going to be very successful again. Great. That's helpful, Bob.
spk06: Last one for me was just kind of relating to the go-forward cost structure. If we think about maybe the Superstore being pretty well represented in Q3 minus the, I guess, upgrades that you're currently making, how should we think about what the addition to operating expenses that will come out of Medizin will look like, which are opening this month? I mean, what should kind of the run rate be there?
spk03: Dennis, do you want to take a stab at that?
spk09: Yeah, so Greg, can you repeat that for me? I was looking at the average ticket when you started telling me.
spk06: Oh, yeah, no problem, Dennis. I was just kind of wondering what the cost structure will look like once we add in the medicine store on a go-forward basis here, you know, in terms of the OPEX that we'll add to where we're at right now with just the superstore.
spk09: Yeah. So I guess from a, from a third quarter perspective, you know, we added a lot of people and obviously during Q2, we didn't downsize as part of COVID. So I don't think, you know, our OpEx is going to be that much higher than it was in Q3 with the addition of the medicine store. We've been paying the lease the whole time. We've been paying, you know, the, the, the fixed costs in that place. The OpEx, we're going to move people and we have started scheduling shifts of, Ted Kinsman, FUD tenders etc over to that location, but the overall optics I don't think it's going to you're not going to see a big increase over Q3. Ted Kinsman, To get that store up and running and you know flowing through obviously we can stock or we can stock it from the products we have. Ted Kinsman, In house, as well as you know third party, so you know I don't think I don't think the operating costs are going to be that much higher to run that store and what we're seeing now, in fact, I think you know if you look at the. The margins in that store will definitely be better than they were back when it closed because we're seeing the average ticket sizes from the local customers at both the superstore and through the home delivery significantly higher than they were at the medicine store previously. With the different events that we think will happen in the Allegiant Stadium and around that neighborhood, I think we can see some big numbers on certain weekends. coming out of that store, too, with really good margins.
spk06: Okay, great. Good to hear. Thanks, guys. I'll pass it on. Thanks, Craig.
spk08: Thank you. Our next question comes from Scott Fortune with Roth Capital Partners. Please proceed with your questions.
spk05: Good afternoon, and thanks for taking the questions. Real quick, can you provide a little more in-store metrics when compared to pre-COVID as far as what's really driving the growth as far as volume in transactions or versus the average ticket size going much higher? Can just comparison from the pre-COVID levels to where you're at now?
spk09: Yeah, so Scott, it's Dennis. So when we – before we – Before we shut in March for COVID, we were looking at, you know, in that $100 to $105 average ticket, and we're averaging kind of 60,000-ish customers a month. And then post-COVID, we've seen that ticket go to 125 for in-store, customers falling down into the, you know, mid to high 50s. So, you know, definitely the volume is not there in terms of the customer throughput that it was pre-COVID. Part of that is because, as Larry talked about earlier, we just can't get the throughput with the 50% operating capacity that we have to abide by under the COVID protocol. So if we can double the size of those registers, I think we can get back up to that 60,000 type of customer traffic. And then the $125 average basket in the superstore, I think, is pretty solid. Our delivery and curbside model, which is local customers, you're seeing that average ticket size in the $100 range, so still significantly above the $69, $70 that we were experiencing in October 2018 when we shut the medicine store. So I think the ticket at the medicine store will be somewhere between $70 and $100 on average. That's a broad range of where we're going from.
spk05: I appreciate that color. Just real quick on your Colpovision expansion as far as capacity in serving the Nevada market. If we have new dispensaries coming on board, kind of how much capacity you have for your own superstore and medicine versus the wholesale side, and is that enough capacity as you look out from the wholesale looking out two or three years from now?
spk09: So the current facility as it stands, we can double it. So it adds about 15,000 square feet of canopy at that new facility in the 25,000 square foot building. And it's a 40,000 total square foot building. So we can get another 15,000 square feet of premium indoor grow out of that new facility. With the two facilities operating, I think, at least for the next 18 to 24 months, we'll see our ability to satisfy our internal sales of that premium flour in the superstore is where all that flour is going to go. So I don't see us really wholesaling any flour to third parties. What we do do right now, given that our current, prior to the acquisition of this new facility, we had 15,000 square feet of grow. All of that flour was sold as flour premium flour in the superstore and we purchase third party, you know, kind of B and C grade flour and trim on the market and push it through our production facility to make our own in-house brands in terms of the edibles and concentrates. So I think that's going to continue. We still get decent margins out of those product lines because obviously, you know, we're making them ourselves. We have our own brands, and we get the margin pick up there. Great.
spk05: And the last real quick question, with the momentum of new states coming on board here, what's the biggest kind of drawback or holdup for moving forward in new states and finding those licenses there? What can accelerate that, or what's the holdup currently right now?
spk09: Yeah, I mean, as we discussed before, I think I'll let Bob and Larry, you know, add on. But I think it's our ability to find the license in the location that we want to be in. You know, we're having challenges in certain markets with we can get a license, but can we move it from, you know, store A to the location we want it to be in? That's where the challenge is right now. So it's a local political challenge that I think at least based on what I've seen. But Bob and Larry, I'll let you expand on that.
spk07: Well, this is Larry Scheffler. I'll add a little bit to that. We want to do what we've done in the past and why we think we've been successful. We spend this money like it's our money, even though it's public money. So if it's not a good deal, as when we are both entrepreneurs, Bob and I, it's not a good deal for us. It's not a good deal for the corporation. We want a good deal. We don't just want a deal. And we're going to continue to do what we've done the best and wait for the right opportunity. Just because we have money in the bank doesn't mean we're going to go out and spend it just to spend it. We think that's the wrong way to do it. We haven't done it in the past, and because of that, we think we've been successful. We've been successful. We'll continue to look for these deals. We'll find them. It takes a little bit longer, but this way doesn't put us in the category of four or five other groups that have been out there that are all liquidating now, doing exactly what we don't want to do. So it's... We just keep searching like we did in California and like we did here for the grow. It's been successful for us and for our investors. We're going to continue down that path.
spk02: I appreciate it. Thanks, and congrats again. Thanks, Scott.
spk08: There are no further questions at this time. I would like to turn the floor back over to management for any closing remarks.
spk03: I don't have any further remarks. Above you, this is Larry.
spk01: No. Fine. Thank you. And again, thank you, everyone, for participating. We can end the call.
spk08: This concludes today's call. You may disconnect your lines at this time. Thank you for your participation. Have a great evening.
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