Jushi Delivers Solid Quarter With Help From Nevada

With the help of its new Nevada assets, Jushi turned in a solid second quarter of earnings with rising revenue and profitability.

Jushi Holdings Inc.  (CSE: JUSH) (OTCQX: JUSHF) reported its financial results for the second quarter of 2022 ending June 30 with revenue increasing 52.4% to $72.8 million. It was an increase of 17.6% sequentially. Jushi said that retail revenue increased 16.1% to $67.3 million and wholesale revenue increased 42.1% to $5.5 million from the first quarter. This beat the Yahoo Finance average analyst estimate for revenue of $68 million.

The company also delivered a net income of $12.1 million or $0.06 per basic share and a net loss of $0.15 per diluted share, compared to a net income of $3.6 million, or $0.02 per basic share and a net loss of $0.09 per diluted share, in Q2 2021. The net loss of $0.15 per diluted share in the second quarter was primarily due to the dilutive impact of the outstanding warrant derivative liability. This missed the estimates for earnings of ($0.07).

“We are pleased to report solid second quarter top-line growth and improved sequential profitability, a strong indication that our strategy, capital investments and cost savings initiatives are building a strong foundation on which we can continue to execute, despite the challenging macroeconomic environment,” said Jim Cacioppo, Chief Executive Officer, Chairman and Founder of Jushi Holdings Inc. “The development of our footprint in Nevada, including the addition of NuLeaf’s high-quality assets, were meaningful contributors to our retail performance in the second quarter.”

Jushi noted that its growth was driven by its acquisitions in Nevada and Massachusetts, and new Beyond Hello store openings in Pennsylvania and Virginia. The 17.6% increase in revenue was primarily driven by the acquisitions in Nevada in the first half of 2022, including contributions from four new state dispensaries, increased retail and wholesale activity in Massachusetts, and growth in retail sales in Illinois and Virginia.

Mr. Cacioppo continued, “In the second quarter, we completed the first phase of construction of the cultivation portion of our grower-processor facilities in Pennsylvania and Virginia. In these two very important markets for Jushi, we are focused on expanding production, improving the sell-through rate of our own-branded products at our Beyond Hello stores and building out our wholesale business. We are also focused on diversifying our product portfolio, including the introduction of many new strains, along with hydro-carbon products and Live Rosin vapes and concentrates that will allow us to differentiate our product offering, while continuing to meet consumer demand.”

As of June 30, 2022, Jushi said it had approximately $43.2 million of cash and cash equivalents. The company said it paid approximately $14 million in capital expenditures during the second quarter. The company said in a statement that it expects capital expenditures to be in the range of $15 to 25 million, prior to any potential tenant improvement reimbursements or financings, for a total of $55 to $65 million for the full year 2022. As of June 30, 2022, the company had approximately $200 million in principal amount of total debt, excluding leases and property, plant, and equipment financing obligations.

Looking Ahead

Mr. Cacioppo said, “Moving into the second half of the year, we are revising our fourth quarter 2022 annualized revenue to be between $320 to $350 million, with a low double-digit Adjusted EBITDA margin. At the retail level, we expect to open three additional Beyond Hello stores in the next four months, including two locations in Virginia and one in Ohio. We are also moving an underperforming store in Pennsylvania. Moreover, we will continue work on adding additional operational grow rooms and expanding production at our grower-processor facilities as we look to increase the sell-through rate of our own branded products through our network of retail stores, along with pursuing wholesale opportunities.”

Mr. Cacioppo concluded, “By the end of 2022, we expect to operate 37 retail locations and approximately 330,000 sq. ft. of cultivation and processing capabilities, including 100,000 sq. ft. of canopy. As always, we are fiercely committed to generating return on investment for our shareholders, and I look forward to reporting on the meaningful strides we expect to make as we continue to strengthen our business through the remainder of 2022.”

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.

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