Debra BorchardtNovember 23, 2021


MedMen Enterprises Inc.  (CSE: MMEN) (OTCQX: MMNFF) has won its case that was brought by former CFO James Parker. In 2019, Parker filed a lawsuit against MedMen, alleging wrongful termination, breach of contract, and retaliation, seeking in excess of $20 million in damages. The case was notable for its scandalous accusations including the creation of a toxic workplace and suggestions that the company paid a third party to buy the stock and push up share prices.

“We are thrilled that the jury concluded that James Parker is not the victim here, but the perpetrator, and that MedMen owes no damages,” said Michael Serruya, MedMen Chairman and Interim CEO. “The false allegations brought by Mr. Parker have grossly misrepresented the environment at MedMen in 2018, and certainly bear no resemblance to the MedMen before us today. We are pleased to put this chapter to rest and focus wholly on taking this company to the next level—leveraging the strength of the MedMen brand and consumer experience to expand across the United States, Canada and internationally.”

MedMen said it has always maintained that the lawsuit and claims were baseless and without merit. The jury agreed, ruling in favor of MedMen on all claims and determining MedMen does not owe Parker any damages. MedMen also asserted affirmative claims against Parker. The jury found that Parker breached his contract, his fiduciary duty, his duty of loyalty, misappropriated trade secrets, and committed conversion, but that there was no harm/damage resulting from his misconduct.

According to Law360, Natalie Lowis, the jury’s foreperson, told Law360 after the trial that the jurors quickly dismissed Parker’s claims that the allegedly toxic environment had anything to do with his quitting. The article also reported that she said they also dismissed his testimony that he felt no choice but to quit because he feared civil or criminal liability due to potentially illegal activity by the company.

“Ultimately, we just kind of felt that there was no harm all around,” she said

She added, “I just didn’t really find it very credible or that [Parker] suffered anything. It seemed, when you tipped the scales, I just believed the company more than him.”

“Now with the record about [Parker’s] lies cemented by this verdict, I think the real story about MedMen and the birth of this industry can come out from behind the last three years of this guy’s baseless lawsuit,” Bierman told Law360.

He added: “[Parker] clearly threw anything he could fabricate up against the wall to see if it would stick. I think the problem is that the jury found that none of it was true.”


Debra BorchardtNovember 22, 2021


California-based cannabis company Bloom Farms has won its case with its former investor Jeff Menashe and his investment firm DG BF LLC, according to a report on Law360. Menashe had claimed that he was led to invest $5 million into the company, but that he was given bad information. After Menashe failed to produce documents to support his claim, the judge ultimately dismissed the case. It was originally set to go to trial in September.

Zurn wrote, “Plaintiffs’ failure to answer written discovery substantially weakened that claim, as they declined to identify any omissions or misrepresentations in written discovery and so were precluded from offering any at trial.”

He went on to add, “While Defendants have generously characterized this state of affairs as “a Menashe problem,” I believe his counsel’s approach of prioritizing bluster over substance has compounded the problem. It is clear that no sanction short of dismissal has been or would be meaningful.”

At one point, Bloom Farms was unable to complete any financing for the company as the case was proceeding, but eventually, the Delaware Vice Chancellor Morgan T. Zurn allowed Bloom to resume financing efforts.

American General Resources or AGR is the formal name of the company. It had requested about $2.2 million or at minimum approximately $600,000 based on the fee-shifting orders the court already issued in the case. Zurn said in the court documents that the fees are now shifted to the plaintiffs.

Investor Delays

Menashe and his firm were asked to produce documents supporting the claims by certain dates so that the case could proceed. They were also supposed to provide records from cell phones and laptops. According to the court documents, Menashe’s lawyers said repeatedly that those laptops had been wiped and donated, but eventually, the laptops were found and given to Plaintiffs’ counsel. Menashe also claimed he didn’t send any business texts, but Bloom Farms was able to produce texts that undermined that claim. Various delay tactics were employed by suggested staffing problems at the lawyers office to not having a company in the small Montana town that could search the phone.

The article said that Eric Boustani, general counsel for Bloom Farms, told Law360 that Friday’s order is the kind of decision that restores a lot of his faith in the legal process. “The tactics which were deployed against the company were so wildly out of compliance with appropriate procedure that to do anything other than dismiss this case would have rewarded it,” Boustani said to Law360.

Bloom Farms is a small privately-owned California-based cannabis company. It is mostly known for its vape pens and also its philanthropy. For every product sold, Bloom Farms donates a meal to someone in need. The company has given over 3,000 meals since 2015.



Debra BorchardtNovember 22, 2021


MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) has appointed Michael Serruya as Chairman and Interim CEO, effective immediately. Serruya succeeds outgoing Chairman and CEO Tom Lynch, who held the position since 2020 and oversaw the company’s operational turnaround. Lynch was only just recently named as a permanent CEO in July.

Lynch joined MedMen as interim CEO and chief restructuring officer in March 2020, a few months after Adam Bierman stepped down as chief executive at the company he launched a decade earlier. Before Lynch came in, MedMen’s Chief Operating Officer & Chief Technology Officer, Ryan Lissack was named Interim CEO in January of 2020.

“We want to thank Tom for his leadership over the past 20 months as he’s led a successful and disciplined turnaround plan, which has left us well-positioned for accelerated growth as MedMen 2.0,” said Serruya. “Our focus now is taking this Company to the next level as we seek to leverage the strength of the MedMen brand and consumer experience in order to expand it across the United States, Canada and internationally.”

Lynch said, “It has been an honor to lead MedMen through its transformation into MedMen 2.0, which is now in growth mode. I am confident Michael and the Board will identify the right CEO to execute against our aggressive growth plans and achieve company-wide profitability in 2022.”

Lynch will continue to serve as the Manager of MedMen Boston LLC and MME Newton Retail LLC, and for the immediate future will continue to participate in the direction and control of those businesses.

Serruya joined MedMen’s board in August 2021 as part of a $100 million investment in the company by Serruya Private Equity to expand its operations in key markets and identify and accelerate further growth opportunities across the United States. This, together with Tilray, Inc.’s acquisition of the majority of the outstanding senior secured convertible notes of MedMen that were originally held by certain funds affiliated with Gotham Green Partners, LLC, provides MedMen with the flexibility to execute on its growth priorities and explore additional strategic opportunities.

Serruya is a seasoned cannabis investor with extensive retail expertise, having previously served as CEO of Coolbrands (then home to CPG brands including Weight Watchers, Eskimo Pie, Tropicana and Godiva Ice Cream) and Kahala Brands (home to global QSR brands including Cold Stone Creamery, Taco Time and Blimpie Subs).

Debra BorchardtNovember 22, 2021


Ayr Wellness Inc. (OTCQX: AYRWF) is reporting financial results for the third quarter ending September 30, 2021 with revenue rising 111% to $96.2 million, which was a sequential increase of 5%. Ayr Wellness also reported a net loss of $3.3 million, which was a bit higher than last year’s net income of $620,373. The earnings per share were ($0.06), which beat the Yahoo Finance Average Analyst estimate for earnings of ($0.15). Ayr Wellness delivered a US GAAP operating loss of $8.9 million which included non-cash, one-time expenses, and non-operating adjustments totaling $34.9 million.

Ayr Wellness is also revising its 2022 adjusted EBITDA guidance to a range of $250-300 million, which the company said reflected delays in capital projects. The company is also feeling the pain of a volatile wholesale market and said that if these issues continue into 2022, it could also impact planned guidance.  The company is reiterating its target for 2022 revenue of $800 million. The company is also forecasting fourth-quarter revenue growth of over 10% sequentially. Adjusted EBITDA is expected to remain roughly flat sequentially, as the company continues its investments in branding, new markets, and growth projects, and the centralized corporate resources to support growth.

“We are pleased to report another great quarter of growth at Ayr, more than doubling our revenue from last year’s third quarter and up 5% sequentially in a flat cannabis market,” said CEO Jonathan Sandelman. “We have been able to maintain or grow share in competitive markets with pricing discipline because, by design, we have focused on quality and consumers continue to show a willingness to pay for quality. As we’ve said, again and again, we seek to be the largest scale cultivator of high-quality cannabis in the United States. First and foremost, this is because we want to produce the best product for our customers. But also, because quality serves as a mitigant to pricing pressure that can result from supply and demand imbalances. Quality matters.”

Gentle Ventures Acquisition

Ayr also announced it was buying Illinois-based Gentle Ventures also known as Dispensary 33 in a deal valued at $55 million. The company owns and operates two licensed retail dispensaries in Chicago, Illinois, one in the Andersonville neighborhood and the other in West Loop. The deal consists of $55 million upfront, including $12 million in cash, $3 million sellers notes, and $40 million in stock. An earn-out is payable if certain EBITDA performance is achieved through Q3 2022. The acquisition is subject to customary closing conditions and regulatory approvals. This will increase the company’s footprint in Illinois to five stores.

New Branding


“Today we are unveiling our new corporate, retail and CPG brands which represent the next phase in the evolution of our company. These brands are designed to represent the quality of what’s inside the box. Our portfolio of power brands, which consists of Kynd premium flower, Origyn Extracts, Stix Pre-Roll Company, and (on closing) Levia, reflects the very best of cannabis and represents leading market categories for current and future consumers. We’re also unveiling a collection of core brands to offer variety in form, dose and experience. These core brands address a broader audience in those same power categories,” Mr. Sandelman continued.

“Lastly, we are unveiling our updated Ayr retail concept. We have built this retail concept very intentionally for the experience in our stores to reflect the quality of our products and our commitment to our local communities. At Ayr, we are committed to thinking long-term. We will continue to invest in our quality and our brands. We understand that brand building in this industry is still in its early stages but the reason that we’re committed to this path is because we know that great products and great brands create their own categories and consumer segments,” Mr. Sandelman concluded.



Debra BorchardtNovember 19, 2021


First it was Slang Worldwide this week that saw the departure of the company’s CEO Chris Driessen, along with Board Chair Peter Miller stepping down and several other board members who left. Today, Canopy Growth Corporation (NASDAQ: CGC) announced that  Executive Vice President and Chief Financial Officer Mike Lee and President and Chief Product Officer Rade Kovacevic would leave the company on December 31, 2021.

New Canopy Executives

The changes are coming shortly after the company blamed the decline in flower sales in the third quarter on an insufficient supply of flower with in-demand attributes, including higher THC, in the premium and mainstream categories as well heightened competition focused on single strain offerings in the value flower category. Canopy said that it managed to keep its number one market share in the premium flower category but conceded that it fell by 310 bps quarter over quarter. The value flower category maintained its number two market share, but that also dropped by 540 bps from the first quarter.

Canopy Growth named Judy Hong as interim Chief Financial Officer and Tara Rozalowsky as interim Chief Product Officer. In addition to serving as members of the company’s Executive Management Committee, both will report directly to CEO David Klein effective immediately. The company said it has initiated an external search for both roles and to support a seamless transition has

“These decisions reflect Management and the Board’s vision for building a best-in-class organization that is well-positioned to deliver long-term growth and shareholder value,” said David Klein, CEO, Canopy Growth. “We appreciate Mike and Rade’s contributions to advancing Canopy Growth to our position as a cannabis industry leader. Judy and Tara are established leaders who have played pivotal roles during their tenure at Canopy Growth. I am confident in their ability to execute against our strategic priorities as we accelerate our path to profitability,” added David Klein, CEO.

Hexo Corp.

HEXO Corp (NASDAQ: HEXO) announced that Sebastien St-Louis has resigned from HEXO’s Board of Directors. The company also announced that it has appointed President and CEO, Scott Cooper, as a Director to replace Sebastien St-Louis, effective yesterday.

“I would like to take this opportunity to thank Sebastien for over eight years of service on HEXO’s Board of Directors. Through his years of dedication, he has helped build HEXO into a market leader in Canada,” said Dr. Michael Munzar, Chair of the Board. “It is my pleasure to welcome HEXO’s President and CEO, Scott Cooper, to the HEXO board. Scott’s experience with Truss, Molson Coors, and several other publicly-traded consumer packaged goods companies will be instrumental to HEXO’s success as we continue to drive growth and profitability through the commercialization of advanced cannabis products and to defend our position as a market leader in Canada.”

Hexo is making the changes not long after it gave a sobering warning about upcoming convertible debt. Hexo also stated that while it enough money for ongoing working capital requirements, the current funds on hand, combined with operational cash flows,won’t be enough for the cash requirements under the Senior Secured Convertible Note, plus the investments required to continue to develop cultivation and distribution infrastructure, and the future growth plans of the company. Management said it is exploring several options to secure the necessary financing, which could include the issuance of new public or private equity or debt instruments, supplemented with operating cash inflows from operations.

22nd Century

22nd Century Group, Inc. (Nasdaq: XXII) joined the club in making big changes as it announced that Richard Fitzgerald has become the new Chief Financial Officer, effective November 15, 2021. John Franzino, the Company’s previous Chief Financial Officer, was transitioned to Chief Administrative Officer, where he will be responsible for further developing the company’s business processes and leading the company’s financial planning and analysis, operational finance, human resources, and information technology functions.

Debra BorchardtNovember 18, 2021


It looks as if the MedMen Enterprises Inc. (OTC: MMNFF)  trial is coming to a close. According to Law360, the lawyers for the company’s former Chief Financial Officer James Parker attorney gave his closing arguments on Tuesday. Parker claims he is owed up to $24.89 million due to his employment contract, while MedMen believes the contract isn’t enforceable because Parker negotiated it himself.

Law360 reported that Michael J. Kump of Kinsella Weitzman Iser Kump Holley LLP, who represents Parker suggested the amount could be even higher if the jury decides to award him damages for emotional distress, damage to reputation, and punitive damages on claims that include promissory fraud, retaliation and wrongful discharge in violation of public policy. However, it was noted that the amount could fall down to $16.4 million if the jury chooses a blended average of the stock price in May and June 2018.

The report said that Kump reiterated the issues that brought the case to court to the jurors. This included the toxic workplace environment due to the co-founder Adam Bierman’s language and Parker’s concern that he could face criminal liability for the founder’s actions. In particular, Parker’s allegations that he discovered the company was illegally inflating its stock price by paying a consulting company to buy MedMen’s stock on the Canadian Securities Exchange. “That was a criminal act that he could be potentially liable for,” Kump said.

Also at issue in the trial were the MedMen shares and when Parker could sell them. Law360 said that at trial, jurors were presented with “different scenarios on when Parker could have feasibly sold the shares allegedly owed him because they were not common stock shares, but long-term incentive plan shares, which cannot be sold as quickly.”

The company has fought the allegations and filed counterclaims against Parker for breach of contract, breach of fiduciary duty, breach of duty of loyalty, misappropriation of trade secrets, and conversion. MedMen co-founder Andrew Modlin took the stand and claimed Parker wasn’t equipped for the job and denied the company was planning to fire him, instead he insisted it was going to work with him on improving his job performance.

Parker actually resigned but says he felt he had no other option due to his liability fears. It looks as if MedMen’s attorneys have finished their closing arguments and the case could be going to the jurors as early as this week.




Debra BorchardtNovember 18, 2021


RIV Capital Inc. (TSX: RIV) (OTC: CNPOF) released its unaudited condensed interim consolidated financial statements for the quarter ending September 30, 2021, with a business update that mostly focused on The Hawthorne Collective. In August, a newly-formed cannabis-focused subsidiary of Scotts Miracle-Gro (NYSE: SMG), invested $150 million in RIV Capital through an unsecured convertible note.

With regards to actual financials, Riv Capital reported an operating loss of $1.7 million for the quarter, net of a provision for expected credit losses of $2.1 million. The loss per share was ($0.01). This primarily consisted of royalty and interest income (before provisions for expected credit losses) generated from the Company’s royalty and debenture agreements with Agripharm Corp., 10831425 Canada Ltd. d/b/a/ Greenhouse Juice Company, and NOYA Cannabis Inc., offset by a provision for expected credit losses on the company’s royalty receivables.

In addition to that, Riv Capital reported a total comprehensive loss of $1.1 million for the quarter versus last year’s total comprehensive loss of $87 million, primarily attributable to several charges related to the company’s former investment in PharmHouse Inc.

“Following the close of the convertible note investment from The Hawthorne Collective, we have been solely focused on narrowing our pipeline of potential acquisition targets in strategic U.S. markets,” said Narbé Alexandrian, President, and CEO, RIV Capital. “We continue to advance discussions with a select number of target companies that we believe embody the qualities we are looking for in our U.S. operating and brand platform, and look forward to making an announcement further to this in the coming months.”

Riv Capital reported that the operating expenses were $5.1 million for the quarter. General and administrative expenses were $3.0 million for the quarter, primarily attributable to employee compensation (including the recognition and payment of certain non-recurring variable compensation expenses) and other public company costs. Consulting and professional fees were $1.8 million for the quarter, primarily attributable to legal and consulting fees related to transaction advisory expenses and other public company and regulatory advisory costs.

“With approximately $400 million in cash on our balance sheet, and potential access to further capital through our strategic partnership, RIV Capital is well-positioned to accelerate the operating and expansion plans of existing U.S. cannabis businesses,” said Eddie Lucarelli, Chief Financial Officer, RIV Capital. “We believe that our substantial liquidity is a core differentiator of our platform and positions us well to build a market leader in the U.S.”


Debra BorchardtNovember 17, 2021


4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) announced its financial results for the third quarter ended September 30, 2021 with total revenues of $25.9 million, topping last year’s $12 million for the same time period for a gain of 70%. However, the company experienced a 4% sequential drop in sales from the second quarter. The company blamed the decline in sales to permitting delays during the local review process for both the Commerce, CA facility and Brookline, MA dispensary. The revenue was also short of the Yahoo Finance average analyst estimate for revenue of $27 million. The net loss for the quarter was $4.5 million, which was slightly higher than last year’s $4 million. 

“While we experienced some regulatory delays in getting Commerce up and running, we are more confident than ever that we have the tools, facilities, and teams in place to meet our considerable growth expectations in the coming year,” said Leo Gontmakher, Chief Executive Officer of 4Front. “During the quarter we made meaningful progress in the development of our three key growth markets of CaliforniaIllinois, and Massachusetts. In Illinois, we officially broke ground this summer on the construction of our cultivation and production facility in Matteson. Construction of the facility is expected to last through 2022, with Phase 1 anticipated to come online in the first quarter of 2023, offering 4Front’s in-house brands and products to the growing retail and wholesale markets in the state.”

Delays In California

4Front also reported that its third-quarter adjusted EBITDA grew 103% year-over-year to $7.5 million, up from $3.7 million in 2020 for the same time period. This was flat when compared to the second quarter, representing an Adjusted EBITDA margin of 23% as compared to Adjusted EBITDA margin of 22% in second quarter. “While higher overall dispensary sales and increased sales of the company’s internally produced products continue to drive systemwide margin improvements as designed, meaningful quarterly EBITDA growth predicated on a fully operational California manufacturing facility was temporarily hindered due to delays in the local review process for the Commerce facility.

4Front’s branded and wholesale manufactured products will be sold to licensed dispensaries in California via its partnership with Nabis, a leading distributor of cannabis products covering 100% of licensed retailers in the state. The facility is currently producing nine of 4Front’s 20 brands and 164 different SKUs including gummies.

“During the quarter we made meaningful progress in the development of our three key growth markets of CaliforniaIllinois, and Massachusetts,” Mr. Gontmakher added. “In Illinois, we officially broke ground this summer on the construction of our cultivation and production facility in Matteson. Construction of the facility is expected to last through 2022, with Phase 1 anticipated to come online in the first quarter of 2023, offering 4Front’s in-house brands and products to the growing retail and wholesale markets in the state.”


Debra BorchardtNovember 17, 2021


The ongoing trial of MedMen (OTC: MMNFF) and its ex-CFO James Parker, court watchers are beginning to hear the other side of the story. So far the trial has delivered Parker’s version of events. He claims that the founders were spending corporate money as if it was their own and creating a toxic work environment. He also alleges that MedMen paid outsiders to buy the company’s stock in an effort to move the share prices higher. He also claims he was improperly terminated, even though he acknowledges resigning.

This week former president and co-founder Andrew Modlin took the stand. MedMen’s position has always been that Parker breached his employment contract, not that he had been unfairly terminated. According to Law360, Modlin testified that although he was increasingly concerned about the performance of then-CFO James Parker in the months after the company debuted on the Canadian Securities Exchange in 2018, he neither fired nor demoted him. Parker claims that the MedMen executives were preparing to fire him because he believed an executive search firm had been hired behind his back.

Modlin suggests that Parker was not performing his job very well. He is reported to have said that cash flow projections had shrunk rapidly while Parker reconfigured how he organized the company’s finances. “Now we’re a month later after the first time hearing [the projection] is going to be redesigned, and now it’s going to be redesigned again, and clearly he didn’t have any experience doing this,” he said. Law360 also said that Modlin testified that Parker projected in June 2018 the company would reach a negative cash flow by February 2019, but then a month later predicted it would be by December 2018, and then in August said cash would run negative by September 2018.

“It was August, so now we have very little time to raise more money,” Modlin testified. “In addition, seeing that this was so volatile going from February two months prior, there was barely any grip from the finance department as to what was being spent at the company.” Modlin also disputes Parker’s claim that it was his idea to list on the Canadian stock exchange and said it was the other co-founder Adam Bierman who came up with the plan. Modlin also stated that he had planned on working to improve Parker’s performance, but that he quit before that happened.

On Tuesday, MedMen brought on a transactional lawyer and adjunct UCLA professor named Neil Wertlieb to support their claim that since Parker negotiated his own employment contract he violated his own fiduciary responsibilities. MedMen believes that the employment contract isn’t enforceable since Parker didn’t have the document handled by a third party. Wertlieb said that Parker had a conflict of interest by personally negotiating a contract that would benefit himself versus the company.

Wertlieb is expected to be the last witness in the trial and while he began testifying on Tuesday, he was not able to finish and is expected back on Wednesday.


Readers may not recall that MedMen went public in 2018 and described itself as the first cannabis unicorn, meaning it would have a billion dollar valuation despite revenues being much much lower. The hyped-up company immediately faced market wrath and received a large amount of negative news that the key executives retained the majority of voting shares, while new investors would have little to no voice. In November 2018, MedMen raised C$86 million with the help of Canaccord Genuity, but the stock was halted in trading as the company had to amend the terms and announce that Parker had resigned. Parker filed his case in 2019.

In November 2019, a group of shareholders filed a lawsuit against MedMen. That case has been settled. The lawsuit claimed, “The MedMen veneer is a complex web of interconnected subsidiary entities, virtually all of which are directly managed, directed, controlled, and owned by BIERMAN and MODLIN, and all of which always pursue the best interests of BIERMAN and MODLIN, rather than the best interests of any stakeholder or entity. It is that perverse interconnectedness and rampant, brazen self -dealing that renders the actions of BIERMAN and MODLIN, and of the Entity Defendants, unlawful.”

CFO’s Keep Leaving

MedMen then began to experience massive departures from its executive suite. Even as MedMen was talking negatively about Parker, it was unable to keep a CFO on board. In October of 2019, MedMen announce that Zeeshan Hyder had been appointed CFO. Hyder followed Michael Kramer, who apparently was terminated as of October 7, 2019. Kramer was only just hired in December of 2018 and he followed the previous CFO Parker who only lasted a year and half.
In December 2020, Reece Fulgham was named interim CFO and remains in that role today.





Debra BorchardtNovember 17, 2021


Jushi Holdings Inc.  (CSE: JUSH) (OTCQX: JUSHF) announced its financial results for the third quarter ending September 30, 2021 with total revenue rising 13.1 sequentially to $54.0 million, and an increase of 116.7% over last year. Yahoo Finance’s average analyst estimate was for revenues of $57 million causing Jushi to miss the estimates. The company also revised its guidance downward.

Jushi reported a net income of $38.2 million, an increase of $33.5 million sequentially, and $68.2 million year-over-year.  The earnings were $0.22 per basic share and a net loss of $0.08 per diluted share, compared to net income of $4.8 million, or $0.03 per basic share and a net loss of $0.08 per diluted share in the second quarter.  The estimate was for earnings of $(0.02). The adjusted EBITDA of $6.4 million was an increase of 38.5% sequentially and 124.9% year-over-year.

“Our financial performance in the third quarter demonstrates our ability to continue to drive strong top-line revenue growth and improved profitability, both on a sequential and year-over-year basis while continuing to invest in the business to support our future growth,” said Jim Cacioppo, Chief Executive Officer, Chairman and Founder of Jushi. “In the third quarter, we made significant progress strengthening all areas of our platform including growing our retail network through a strategic acquisition in Massachusetts, and the opening of two new stores in Pennsylvania. We also expanded access to our brands and products, including the introduction of flower in Virginia, and enhanced our wholesale capabilities with acquisitions in high-growth markets such as Massachusetts and Ohio.”

Jushi noted that the net loss per diluted share in the quarter was primarily due to the dilutive effects of the derivative warrants as accounted for under IFRS. The $33.5 million improvements in net income in the third quarter were primarily driven by the gain on fair value derivative liabilities of $55.1 million. Net income increased $68.2 million as compared to last year, driven by an increase in fair value gain on derivative warrants, revenue, and gross profit.

Revenue Breakdown

Jushi said that the increase in revenue was driven primarily by solid revenue growth at the BEYOND / HELLO stores in Pennsylvania, Virginia and Illinois, and less than one month of revenue contribution from the addition of two Nature’s Remedy stores in Massachusetts. Plus, increased operating activity at the company’s grower-processor facilities in Pennsylvania and Virginia, and a partial contribution from Nature’s Remedy’s Lakeville Facility also contributed to the increase in revenue. The 116.7% year-over-year increase in revenue was primarily driven by the build-out and expansion of the company’s retail store base, expanding from 10 to 24, and the modest expansion of the company’s wholesale business driven by an increase in cultivation and manufacturing activity.

Mr. Cacioppo added, “With our recently announced Acquisition Facility, we are well-positioned with a strong balance sheet to continue executing on our growth plans. We expect to accelerate our expansion plans by identifying and securing assets in new and existing markets and continuing to deliver a differentiated customer experience through our best-in-class retail and online platforms.”

Looking Ahead

Jushi revised its guidance for 2021 revenue to a range of $205 to $215 million and cited several reasons why the company won’t meet its original goals.

Mr. Cacioppo added, “We are revising our full year 2021 revenue guidance range to $205 to $215 million, and our 2021 Adjusted EBITDA guidance range to $21 to $25 million on an IFRS basis. The reduction in revenue and Adjusted EBITDA guidance was driven by (1) delays in new store openings, due to unforeseen regulatory approval timing-related delays; (2) slower than expected ramp-up of wholesale activity in Massachusetts due to the lack of wholesale operating infrastructure by the previous operator; (3) ongoing regulatory complexities that have impeded our ability to introduce our full suite of flower products in Virginia; and (4) a delay in signing and closing of acquisitions in Nevada. We also incurred greater than expected corporate overhead as we have ramped up hiring to support our continued growth.”

Mr. Cacioppo concluded, “While the pace at which we have been able to open new stores and launch new products has been slower than we initially anticipated, I am pleased with the progress we have made to date, and I am encouraged by our industry-leading organic growth as we continue to expand our footprint. We are also reaffirming guidance for 2022, as the challenges we have been experiencing will be substantially behind us by Q1 2022.”

NuLeaf Acquisition

In addition to delivering its earnings numbers, Jushi also announced that it was buying Nevada-based NuLeaf, Inc. for approximately $62.5 million. NuLeaf currently operates two high-performing adult-use and medical retail dispensaries in Las Vegas, NV, and Lake Tahoe, NV, in addition to a 27,000 sq. ft. cultivation facility in Sparks, NV, as well as a 13,000 sq. ft. processing facility in Reno, NV. Additionally, NuLeaf owns a third licensed retail dispensary located directly on Las Vegas Boulevard, which is expected to become operational in early 2022.

“We are thrilled to enter into an agreement to acquire NuLeaf, a vertically integrated operator with the potential to significantly increase our presence in the Nevada retail and wholesale markets,” said Cacioppo. “NuLeaf boasts a well-established retail network with top-quality, design-forward dispensaries in coveted high-traffic destination locations. In addition, NuLeaf’s cultivation and processing assets are strongly aligned with our strategic expansion strategy in Nevada. This acquisition is expected to generate significant top-line growth and be immediately accretive, as well as increase market share of Jushi’s best-in-class brands, and establish a leadership position in one of the largest cannabis markets in the U.S.”

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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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