Why Planet 13 Will Fail in California

It works in Las Vegas, why wouldn't it work in California?

Planet 13 in Las Vegas has attracted international attention since it opened perhaps the world’s biggest marijuana store last fall, with 3,000 people shopping each day for newly legal cannabis products while surrounded by light shows and interactive art displays that feel natural a few miles off The Strip.

Now Planet 13 has announced that its second location — and likely the largest cannabis shop in California — will open early next year. And since it’s being billed as the “Disneyland of dispensaries,” it’s fitting that it’s opening just six miles from the theme park, in an industrial stretch of Santa Ana.

“It’ll have to be different than Vegas, of course,” said Larry Scheffler, co-CEO of Planet 13. “But it still has to be a destination, with different effects blended into the fabric of the Southern California lifestyle.”

The company, which is traded on the Canadian Stock Exchange, has been scouring locations from Santa Cruz to San Diego for months, according to Scheffler. Several key numbers sold them on Santa Ana.

Los Angeles, for example, is planning to initially license some 400 shops in a city of 4 million people, with neighboring L.A. County cities such as West Hollywood also allowing marijuana sales.

But Santa Ana is the only city that permits marijuana shops out of 34 cities in Orange County. And with Santa Ana issuing just 30 licenses, there will be a maximum of 30 shops serving a county with more than 3 million residents and more than 50 million visitors each year.

“To us, it was like a red flag,” Scheffler said. “This is the place to go.”

But it will fail.

Here's why.

Santa Ana is not Disneyland. And while it may be only 6 miles away, try getting there during rush hour... or really, any hour.

The fact is, while people may easily zip along the Las Vegas Strip, no one zips anywhere in Orange County. And counting on tourists at Disneyland coming all the way to Santa Ana is just a dream that will eventually turn into a nightmare for Planet 13.

Santa Ana residents voted to regulate and tax medical marijuana shops in November 2014.

The city then held a lottery to award licenses to 20 businesses, which started opening in August 2015.

After Californians legalized recreational marijuana, the Santa Ana City Council voted to let its medical marijuana shops start selling cannabis to all adults 21 and over with just an ID, starting in 2018, when the state launched a recreational cannabis market. The city council also opted to license up to 10 more recreational cannabis shops, for a total of 30. And council members voted to allow non-retail cannabis businesses, including cultivation, distribution, manufacturing and laboratory testing.

To date, 18 shops are open and 12 others are in development, according to city spokeswoman Daisy Perez. But none will fail as massively as Planet 13.