Jushi Plays the Waiting Game

Jushi execs are optimistic that Pennsylvania and Virginia will legalize adult-use cannabis.

Multistate operator Jushi Holdings Inc. (CSE: JUSH) (OTCQX: JUSHF) isn’t really interested in M&A these days. Instead, the company standing its ground, waiting on some of its core U.S. state markets to graduate from medical-only to adult-use.

“Jushi is in a very unique situation in the industry where our large footprint in Pennsylvania and Virginia, including one Ohio store, means – excluding California – approximately 71% of our retail stores will likely flip to adult-use at some point in the next couple of years,” CEO Jim Cacioppo said during the company’s most recent earnings call.

“If just one of these states flip to adult-use, Jushi would be well positioned for industry-leading growth and profitability,” Cacioppo said.

That knowledge – along with the well-known turbulence in the cannabis industry nationally, punctuated by depressed wholesale prices, struggling balance sheets, and high costs for capital – has convinced Jushi that the best strategy is to hold off on any more M&A for now.

One reason behind that strategy is that Cacioppo doesn’t want to dilute the value of Jushi for existing shareholders, because he’s confident that recreational cannabis is coming to all three of those states.

“Our current strategy is to focus inward and pursue a significant M&A transaction at an opportunistic time after capital markets normalize,” Cacioppo said. “We have a decently healthy cash balance, but we’re not interested in using that for M&A.”

Specifically, Cacioppo singled out Pennsylvania and Virginia, where Jushi is hard at work lobbying state lawmakers to support recreational legalization, he said.

In Virginia, he said the odds are looking good that Democrats will retake enough seats from Republicans so that the legislature will finally move forward with implementing the recreational marijuana legalization approved back in 2021. Ever since Republicans took over the governor’s mansion and the House of Delegates that year, they have refused to act on getting a functional adult-use market in place.

“We are optimistic about the historic turnover of approximately 30% of Virginia state senate members and approximately 40% of the Virginia House of Delegates retiring ahead of the November election,” Cacioppo said.

The election could bring with it “a generational shift among legislators and will have the potential to reinvigorate this court around the enactment of long-awaited policy changes in the state’s cannabis market,” Cacioppo said.

In Pennsylvania, Cacioppo said, Jushi has a “big government relations push” planned for coming months around a cannabis legalization bill in the legislature that may have committee hearings this coming fall – and could even become law this year. That would put Jushi in an excellent position to capitalize, since the bill would give first-mover advantage to licensed medical dispensaries.

“I don’t need to do acquisitions and dilute my shareholders down here and give away that upside to these lucky people that we would acquire,” Cacioppo said.

John Schroyer

John Schroyer has been a reporter since 2006, initially with a focus on politics, and covered the 2012 Colorado campaign to legalize marijuana. He has written about the cannabis industry specifically since 2014, after being on hand for the first-ever legal cannabis sales on New Year’s Day that year in Denver. John has covered subsequent marijuana market launches in California and Illinois, has written about every aspect of the marijuana trade, and was part of the team that built the cannabis industry’s first-ever trade show, MJBizCon. He joined Green Market Report in 2022.


Leave a Reply

Your email address will not be published. Required fields are marked *

Get the latest cannabis news delivered right to your inbox

The Morning Rise

Unpack the industry with the daily cannabis newsletter for business leaders.

 Sign up


About Us

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


READ MORE



Recent Tweets

Get the latest cannabis news delivered right to your inbox

The Morning Rise

Unpack the industry with the daily cannabis newsletter for business leaders.