Ep 353 – The Largest Cannabis Dispensary in the World Just Got Bigger

bob groesbeck planet 13

Planet 13 is the largest cannabis dispensary and retail experience in the world, and it just got bigger. Here to tell us about it is Co-CEO Bob Groesbeck.

Learn more at https://www.planet13lasvegas.com

Key Takeaways:

[00:56] An inside look at Planet 13’s 112,000-square-foot cannabis superstore in Las Vegas

[2:27] Bob’s background and how he got into the cannabis space

[4:53] How Planet 13 merges cannabis and entertainment for a unique retail experience

[9:30] The organizational tools Planet 13 uses to keep its dispensary running smoothly

[16:17] How Planet 13 decides which products to offer and the best ways to display them

[17:43] Surprising new consumer habits Bob has noticed over the last year

[21:19] Bob’s predictions for when we’ll see the first national brand in cannabis

Click Here to Read Full Transcript

Matthew Kind: Hi. I'm Matthew Kind. Every Monday look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at cannainsider.com. That's C-A-N-N-A insider dot com. Now, here's your program. Today's guest has created arguably the largest cannabis dispensary and retail experience in the world. I'm pleased to welcome Bob Groesbeck, CEO of Planet 13 Dispensary to the show today. Bob, welcome to CannaInsider.

Bob Groesbeck: Thanks, Matt. It's great to be with you.

Matthew: Give us a sense of geography. Where are you in the world today?

Bob: Well, today I'm actually in Vegas. I'll be down in California tomorrow, getting prepared for our VIP opening on the 24th, and then waiting for the opening to the public on July 1st.

Matthew: Well, you got to give us a sense of how big Planet 13 is and what it is for people that don't know. I think probably at least half the audience has heard of it, but another half hasn't. Just give us a snapshot. What is Planet 13 at a high level?

Bob: Sure. Planet 13 Superstore is, without a doubt, the largest dispensary complex of its type in the world soon to be the universe. We're about 112,000 square feet under roof, and we've built out about 75,000 feet, and we're actively under construction now of about another over 25,000 feet coming online here the latter part of next month, early August. Got about 16,000 square foot dispensary. We're adding roughly that's about another 7,500 feet of floor space and, of course, all the support that goes with that.

That'll take us to about 85 registers roughly. It's all designed to be an experience. It's more than just buying cannabis. It's mine cannabis with an experience. It's all about Vegas and it's all about doing things over the top. Of course, now we're carrying this footprint into Santa Ana, California with our first Superstore outside of Nevada. I'm really excited to build that scale and that type of operation with a Cali vibe. It's completely different than Vegas other than it's grand and it's designed to really create an experience.

Matthew: I want to get into more details there in a minute, but before we do, can you just give me a little bit of a background about you and how you got into this business? What were you doing before Planet 13?

Bob: Well, I spent many years as corporate counsel primarily in the solid waste industry, and a very strong regulatory background. I had my own firm for a while. I worked in a number of firms from small firms to national law firms and really spent a lot of time again in the regulatory environment for different clients. I really tripped onto this opportunity literally because I was at a county commission meeting and waiting on a land-use item of ours to be called and really wasn't paying much attention.

I thought I heard somebody mentioned the word marijuana and that peak my interest and then there was silence again. I went back and zoned out and started reading my material for my item. There again, they raised the items start talking about a regulatory framework that needed to be adopted. I was fascinated. I walked down close to the dice, I grabbed a hard copy of the agenda, look at the backup material. I was just stunned that here we were in Nevada looking to adopt a regulatory framework for sale of medical marijuana and super intriguing.

Of course, I didn't have enough sense at that time to really understand just how complicated it would be, but I came back and talked to Larry Scheffler, my co-CEO, and my longtime partner in real estate. We started talking about this, how many times in a lifetime does a business evolve from the underground to becoming illegal? We looked at that as an opportunity to something we really needed to explore and we jumped in with both feet. Again, we were pretty naive at the time.

We didn't really understand all the nuances and the implications of Schedule 1 and 280E and all those things but we made the decision nonetheless, and here we are, fast forward, nearly seven years later, and we've built a beautiful facility and now we're expanding that model other the jurisdictions, as I said.

Matthew: This is a super large facility. You said rooftop is over 100,000. Can you talk about inside, just paint a picture of what the experience is like because we're an audio medium here and people can't visualize?

Bob: Sure. For your audience, I encourage you to go on our website. There's quite a bit of B roll there, a lot of photos that they can look at, but really the experience is designed to start as soon as you pull into the parking lot. We've got a giant planet ball that greets you with water and steam. The whole idea is to really just get you excited about what lies inside. If you come in the evening, we call it the West Wall, you'll see a laser graffiti operation, the gigantic laser graffiti, where it's unlike anything really in the industry.

We used to allow our customers spray painless a laser graffiti, but the parking lots now are so congested and full that we've had to loop that through a computer system. Then, on the rooftop, you see gigantic flowers that are multi-colored LEDs and just really vibrant and special and then you transition into this gigantic lobby. They greet you at check-in and once you get your tickets, you're allowed to move forward into the grand hallway. On the left side of the building, we've actually got a large restaurant, Trece, we've got a full bar on-site.

We've got a massive production facility further down the hallway of which about 3,800 square feet are behind glass so customers can actually watch products being manufactured in front of them. Then, there are CUNY kiosks in the hallway that you can touch, that are touchpads, that you can look at the products as they're being manufactured and find out what the constituent products are that that given runner. It's really just designed to engage you, get you excited about the facility, and what it offers.

Then you go into the dispensary and then you go through the turnstiles and you're greeted with flying orbs which we found in Germany that fly on a GPS every hour to a choreographed light show. It's again designed to create that experience. This is Las Vegas after all. We've got 3D mapping on the ceiling and then our new phase of construction that's again, as I mentioned earlier, should open end of next month, it's going to have a gigantic video wall with waterfalls and planets coming at you in 3D.

To give you an idea of the scope, it's about 80 feet by 16 feet tall. We've got Maglev technology that are going to greet customers as they come in. They're going to actually see inventory floating in space in front of them and they'll have a full 360 views. It's really just, again, designed to be over the top. We're going to bring similar experiences to Santa Ana, of course.

Matthew: This is really something that could only exist in Las Vegas in many ways or at least start out that way. Cannabis and entertainment merging, how do you come up with ideas on what you want to do here to just wow people? Is their brainstorming sessions just come to you in the middle of the night? What's the process look like?

Bob: That's a great question. It's a combination of all of that, but most of the features you see in a store are things that Larry and I have come up with or we found, and we want to improve upon the wheel. We've got a very creative staff as well. They come up with ideas that makes sense. We'll integrate that into the process. We're always trying to change it up as things move on. Like I said, Santa Ana is a completely different field than Las Vegas. We learned a lot of lessons down there or here in Vegas that we've put into place down there as far as moving people, enhancing the experience.

Again, California is different than Nevada. You've got oceans, palm trees, and surfboards, and that whole Cali lifestyle and vibe. As we go into these larger markets like Santa Ana, Orange County, we're going to pay homage to the lifestyle, both communities we go into and really play up on what makes that community special.

Matthew: This is a massive operation just organizationally. Do you use a lot of technology and special processes to manage the whole thing or do you look at it like we're managing a theme park or how do you think about organizing and managing it all so it runs like clockwork?

Bob: Well, very much so. A lot of technology has been integrated in the facility. For instance, when you check-in at the front desk, you're giving a card. It's almost like you'd see a baseball field, it's QR coded, and then you go through optic scanners, you go into the facility, then you're directed to a keyless system that basically you put your phone number in, and then it puts you into a staging queue, and that lets you know where you are in the process.

Your way could be from zero minutes when the store is not busy, all the way to an hour or more when we hit peak times like Friday evening, Saturday evenings. We're looking to shorten that up considerably with the expansion. The whole idea is to let you know where you stand in the process. Give you an example, let's say you're here on a Friday evening, it's really crowded, there's going to be a significant wait time, go across the hall, have dinner, or sit in a bar and have a drink, watch sports, do whatever you want to do, just monitor your phone, and it'll tell you what your estimated wait time is.

Then it'll ping you and say, "Go to register 36 on the floor." It's really designed to make it as convenient as we can. Our philosophy is simple. We want you to stay here as long as you want to stay. If you're in a hurry, you want to get out, we want to accommodate you there as well. If you want to spend a couple of hours in the facility and enjoy it, we encourage that as well. That's why we're bringing on the expansion of the dispensary floor. We're also adding a standalone retail center. Now, soon, we'll start construction in the museum at the north end of the complex.

Then recently, you probably follow the national media on the Nevada Legislature approved lounges. We're really looking to now design a feature that will fit in well with that whole experience and really, again, keep you here as long as you want to stay.

Matthew: Tell us what's your vision for what the lounge will be like?

Bob: Well, we're looking at it probably a little differently than others. Again, the vast majority of our customers to the superstore here in Las Vegas are non-Nevadans. They want a club-like experience. What we're trying to do is basically build it out in two sections. One would be what we call an ultra lounge where it's quieter, very high-end, luxurious, but you can talk and engage with friends in a relaxed atmosphere. Whereas if you go into the club, it'll be a true Las Vegas-type club experience. There will be a cover charge, there will be entertainment, it'll be loud, and just over the top. We're looking to provide that experience to both groups.

Matthew: You said it's mostly non-Nevadans. What is the mixer? The breakdown?

Bob: Roughly, pre-COVID, and I've qualified that a bit, pre-COVID, about 85% of our customer base here at the superstore were not Nevadans. Obviously, during COVID, that changed dramatically. It basically went down to zero and the store was closed for a bit of time as we transition to delivery only. When we did open incrementally, the vast majority of our customers were locals. Now, we're seeing that as Las Vegas is reopening, we're seeing it now trend toward that 85% range again. We think that that'll be the cases things stabilize.

Matthew: What's the general vibe in Vegas right now? Are things pretty much wide open or is it half-open, just all the casinos and surface away and all these different things?

Bob: Pretty much all open. Some of the venues, they're not seven days, maybe they're five days or whatever, but they're all transitioning to their schedules pre-COVID. It's coming together. We're really excited. The traffic volumes now are ticking up. The exciting thing about that is we're seeing a huge retail customer base coming in. We haven't really started to touch on the convention customer, those events. We'll start to trail here in Q3, Q4. We're really excited about that. We just think there's a lot of upside.

Matthew: When people come in and have the Planet 13 experience, is there anything they say to you over and over again that you use at this point? You know what the typical responses?

Bob: Well, no. I love to just sit in the grand hallway and listen to people as they come in. I give you an example. Just last week, there was a group of five people from Houston that were in. They're walking down the hallway and they just finished watching chocolate being run on the automated rotten machines there. One of the girls turns for a friend and says, "I'm in heaven." I just thought that encapsulate everything that we're looking to do. Again, it's about the experience.

Matthew: That's going to be a lot of fun just coming up with these ways to wow people. It's like a Disney experience or Pixar like how are we just going to amaze people. The bar is always being raised, I'm sure.

Bob: Right. Well, as the industry has continued to evolve and legalize, there was a stigma and there still is. There's still a lot of Americans that have no idea what cannabis is or what it's about. The fact that some really positive things come out of that, and particularly, bring it out of the underground and legalizing it, creating jobs, paying taxes, doing all that. I think we have a lot of customers that come through that are cannabis curious or maybe they're coming with a friend really who had no exposure.

Or they've been to a store where they come from where it's out in an industrial area with steel bars, and a bunch of alleys, you got to go through to get to it. They come here and I see this. Wow, this is part of a real business in a very large scale business at that and we feel safe, we feel comfortable, everything's professionally displayed. I think it sets the tone and we think that's good for everyone.

Matthew: How do you decide which products to offer and then where to put them for optimal sales and visibility?

Bob: Well, that's an entire process. We've got a buying team together and we've got merchandise display people. They work very closely together. A lot of products before they ever get into the store, the vendor that's looking to place here in the facility provides samples and they're rigorously tested by our staff. Certain salespeople, for instance, will be provided with those products, they'll sample them, they'll score them, and then we'll sit down and talk about them, the positives, the negatives. If they can pass that hurdle, then they work with the buyers on pricing.

Then placement is a whole different game. If you're placed on what we call our Gucci Row, you pay for that placement like in any retail environment. It can be very significant depending on where you're placed. That's a very involved process and it's continually evolving. As I said, as we open the new retail store or the new retail area, there will be product placement opportunities there too. In fact, a number of those spots are already pre-sold before we even open the facility.

Matthew: Are there any consumer habits that you notice that are shifting or evolving lately?

Bob: Well, yes. During COVID or pre-COVID, rather, we would see huge percentage of our sales through non-flower vehicles, whether it be vapes or edibles. Then during COVID, that completely reversed. It was a huge gravitation back to flower products. We're seeing that now that the city reopens, more tourists are coming back. We're seeing at the superstore facility. We're seeing, again, a migration back toward the more discreet usage because you're not permitted in Las Vegas to smoke in casinos or smoke THC products, for sure.

We're seeing now, again, as the tourists come back, we're seeing that migration back to the more traditional levels that we were saying.

Matthew: During COVID, it sounds like you closed for a while, but also shifted a lot to delivery. Can we talk about that a little bit?

Bob: Yes. Let's say to put it timely a challenge. We were basically given about 24 hours' notice that everything was going to close. It didn't impact just us, it was everyone across every business sector. For us, it was acutely painful because again, all of our traffic was derived from tourists customers. Literally overnight, we went from several thousand customers a day to zero. We were fortunate though that the governor allowed our industry to engage in a delivery platform. Unfortunately, we had no meaningful delivery at that time. We were running several vehicles, maybe 20, 30 deliveries a day on average. That obviously wasn't consistent in operation of the size long term. We immediately made the decision. We weren't going to close our doors. That was not an option. We made a decision to try to compete in the delivery market and cater locals. We went out and found 30 vehicles in fairly short order and have them equip and converted to handle delivery. Within probably 60 days, we were knocking on 900 deliveries a day and built up a huge delivery platform.

Matthew: Wow. What did you use for that? A custom app?

Bob: Yes, we did. Well, we utilized a couple of apps and integrated those, a route smart technology, and really built that and started improving upon it. We continue, we have a very robust delivery service today, and we're going to continue. That's one of the positives out of this whole nightmare was it really allowed us to create a revenue stream and services segment that we weren't even focused on. Our delivery in curbside programs today represent standing alone about equivalent to whatever a retail store would in revenue monthly. Very excited about how that turned out.

It was a heck of a challenge but it paid big dividends in. Really, it's a testament to our staff, and our managers, they got focused. We all realized there was a huge challenge, but we're going to do everything in our power to see it succeed and it did, at levels we didn't even anticipate.

Matthew: Bob, is there any big trends you see in the cannabis industry that you feel that most people don't appreciate how big they're going to be?

Bob: Look, I do see on the horizon here, there will be national brands like you'd see in any other industry. We're not quite there yet. I think it's still a bit choppy. The fact that we still have schedule one looming over the industry. Unfortunately, in every state, it's how you advertise, how you market to customers is completely different. Until that changes, it's going to be a challenge. I think the industry has come a long, long way in the future in a few short years, but I still think we've got a lot of heavy lifting to do.

Matthew: Bob, I'd like to ask a few personal development questions. Is there a book that's had a big impact on your life or a way of thinking that you'd like to share?

Bob: Well, I don't know about a book, per se. I love to read, I'm constantly reading. When I'm not focused on this, dealing with the issues of this company, I'd like to just decompress and get a good book. For instance, right now, I'm reading a biography on President Grahams. I love history, I love everything about history and I recently finished a thousand-page Home on Egypt, the Evolution of Egypt. That's just what I do.

Matthew: I wonder what anthropologists are going to say thousand years from now about Vegas.

Bob: Wow, that's going to be an interesting read for sure. Vegas is unlike anything in the world, any place. One thing about Vegas though, we've had a lot of hard lumps, but we always seem to come back and reimagine ourselves in the community and what we do and we're no different year plan.

Matthew: Is there an old Vegas spot that you think that's really cool that people may not have heard of or you can get the essence of back, the Rat Pack, or maybe an old food hunt that you think's not well known, but it really deserves a visit?

Bob: Well, it's interesting. Unfortunately, in Vegas, one thing we've not done a good job at is protecting history. Every old hotel, we demolish it and build something new. There are pockets. For instance, there are a few old restaurants in town if your viewers, your audiences in town, they want to go to an old steakhouse. There's a place called the Golden Steer off of Sahara in Las Vegas Boulevard that is truly old Vegas. It's still old Vegas place and it has good food. It's been there probably for 60, 70 years, I'm guessing.

There's an old place off of, I believe, it's Flamingo, Battista's Hole in the Wall. That's been there forever. It's rumored to have been the place for all the old mobsters used to hang out have dinner and stuff. There still are little places like that, a few of them but not far, they're few and far between.

Matthew: Another food question here, Bob, what's your favorite unhealthy comfort food?

Bob: Everything. I'm an addict for sweets. I love candy. I love cakes and pies. I try to be healthy, but I got to be honest. I go the wrong way pretty frequently. I love ice cream.

Matthew: I love the honesty. Well, Bobby, you got a lot going on here. Please tell listeners how they can find your new store in Southern California, Orange County, Santa Ana, and then how they can learn more about Planet 13 when they visit Vegas?

Bob: Sure. Viewers, obviously, you can just go to our website, planet13holdings.com or planet13lasvegas.com. Same with Orange County. You can find us anywhere on the internet there. We're at 3400 West Warner Avenue in city of Santa Ana. We're just a couple of minutes away from the beach, just probably eight minutes south of Disneyland. Right there, near the 405 and the 55. It's going to be a destination down there as well, and we encourage everyone to come have a look. This is phase one that's opening.

As soon as we open that, on July 1st, we're starting design work on phases two and three. It's going to be an amazing complex and we're real excited. Of course, in Vegas, all you have to do is get off a plane and ask a cabbie where we are mostly. We got 200 wrapped cabs alone. You want to go to the Planet, they know where we are, or you can get us off any of the social media platforms. We're here and we're 24/7, and we're all about the customer and the experience, and I'd love to have all of your audience here.

Matthew: Bob, thanks so much. Good luck with everything you're doing and the grand opening in Santa Ana.

Bob: Great. Thanks, Matt. Great to be with you. Come out and see us.

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