Jushi Holdings Archives - Green Market Report

StaffStaffAugust 7, 2020
shutterstock_1093553171.jpg

5min1280

Editors Note: This story was written by Gina Larson.

CBD, the popular cannabis-derived cannabinoid, has its own national day coming up on August 8th. First designated in 2018, the day may not be as well known as the unofficial cannabis holiday – 4/20 – but it does show that the compound has come a long way in gaining recognition all on its own.

In 2020, it seems that CBD can be found everywhere from cosmetics to confections to dog products and beverages. According to New Frontier Data, about 28% of American consumers have tried a CBD product. It begs the question of whether CBD is just the latest fad. But  Jushi Holdings Inc. (OTC:JUSHF) Co-President and Board Member Erich Mauff doesn’t think so. The U.S. Food and Drug Administration’s approval of the prescription medication Epidolex to treat epilepsy shows that the cannabinoid holds great therapeutic promise.

“As we’ve seen with Epidiolex, I believe we are only beginning to scratch the surface when it comes to unleashing CBD’s full medicinal value,” said Mauff. “On the frontlines, our Medical Advisor is seeing a sizable uptick in the number of healthcare professionals exploring CBD as a way to help patients manage a wide variety of conditions. At the same time, the cannabis sector is starting to formalize the way it collects data, standardizes research and develops new products and formulations, which I believe will help cannabinoid therapies continue their entrance into the mainstream.”

CBD Remedies

CBD claims to help various conditions, everything from such as helping sexual dysfunction, improving cardiovascular health, reducing acne, moisturizing skin, soothing inflammation, calming anxiety, among others. Yet, with the exception of Epidolex, the FDA bans companies from making health claims when marketing CBD products. This leads to a lot of confusion and uncertainty in the market. To help guide consumers, Ganja Goddess founder Tara Wells launched CBD Goddess. 

“There’s a new wave of consumers entering the CBD market, but often they are overwhelmed due to the sheer number of products available, which differ widely in quality and ingredients. We launched CBD Goddess as a resource for consumers, who are taking charge of their health and wellness, so they can easily order high-quality products online and have them delivered to their doorsteps,” said Wells.

Despite its popularity, the CBD market – like nearly every other CPG sector – has had a rocky year. Due to impacts COVID had on retail, The Brightfield Group adjusted their forecast down for the industry, projecting that CBD sales would only rise 14% this year compared to 2019 rather than the 30% originally projected. Store closures, a continuing rise in unemployment, and inaction by the FDA to provide additional guidelines and regulations are all contributing to a sluggish market.

Regardless, brands are hoping that more consumers will be tempted to try CBD as the 3rd CBD Day is celebrated with attractive sales already in full swing. Nira, a line of physician formulated CBD products, is offering 50% off all their products. Kat’s Natural, founded by herbalist Kat Merryfield, is giving customers 25% off their signature topicals through Sunday and giving away a free Kat’s Naturals hemp t-shirt with every order placed on CBD Day. Wyld, a maker of gummies, is offering 25% off their 250 mg and 500 mg four packs. 

Sales like these are proliferating across the web this weekend. If you haven’t tried CBD – what are you waiting for?


Debra BorchardtDebra BorchardtJuly 7, 2020
BeyondHello-1280x853.jpg

5min2880

Jushi Holdings Inc. (JUSHF) announced its financial results for the first quarter ending March 31, 2020, and pre-announced its second-quarter 2020 revenues. Total revenue for Jushi increased 43% sequentially to $8.6 million, while the company delivered a net loss for the quarter of $15.8 million. The net losses were down slightly from the fourth quarter’s net losses of $17 million.

The company attributed the increase in revenue to the acquisition of two medical marijuana dispensaries in Illinois, one of which began serving adult-use customers in March, and strong revenue growth at the Company’s BEYOND/HELLO stores in Pennsylvania.

“Our 43 percent quarterly revenue growth in the first quarter was driven by strong sales at our BEYOND/HELLO stores in Pennsylvania and the acquisition of two Illinois dispensaries,” said Jim Cacioppo, Chairman and Chief Executive Officer of Jushi. “I’m encouraged by the continued momentum we have seen coming out of our second-quarter results, where despite short-term headwinds such as the closure of two of our Philadelphia stores and several in-store initiatives aimed at prioritizing the health and safety of our employees, patients, and customers, we nearly doubled our sequential quarterly revenue growth rate to 74 percent with Q2 revenues of $15.0 million.”

Second Quarter Forecast

Jushi said that it expects to report total revenue of $15.0 million in the second quarter, an increase of 74% sequentially. The company also said that the annualized revenue run-rate for June 2020 of approximately $69 million, was a 38% increase over the March annualized run-rate and includes the negative impact of two closed Philadelphia stores due to break-ins at the end of May.  Adjusting for the closed stores, annualized revenue run-rate for June 2020 would have been approximately $78 million.

In addition to the second-quarter forecast, Jushi said it is also reaffirming its 2021 revenue guidance of $200 to $250 million. As of March 31, 2020, the company said it had $35.7 million of cash and cash equivalents as well as $13.6 million in short-term investments.

Management Comments

Mr. Cacioppo added, “While we are pleased with our topline results, we have also been implementing several cost reduction initiatives across our network of retail stores that are focused on strengthening our financial rigor and driving long-term profitability. These include the implementation of strategic purchasing practices, optimizing our labor model, improving our in-store product mix, creating additional targeted promotions, and further leveraging our beyond-hello.com online platform. While the impact of these changes are not significantly reflected in our Q1 results, I expect these changes to become more evident in the second quarter and as we enter into second half of the year.”

Mr. Cacioppo concluded, “We are also focused on further enhancing our customer experience at our existing dispensaries. During the second quarter, we relaunched Beyond-Hello.com which now features a vastly improved customer experience, real-time access to store inventory, and importantly online reservations. I can say with full confidence that the online roll-out has been a big success with online pre-ordering making up a very large percentage of our sales. We believe the online system has increased sales, operating efficiencies, and improved employee, patient, and customer safety. The BEYOND/HELLO retail brand has a reputation for providing a superior customer experience in Pennsylvania that we look to expand beyond the Commonwealth and into our Illinois, California, and Virginia markets.”


Debra BorchardtDebra BorchardtJune 22, 2020
BeyondHello-1280x853.jpg

4min7740

Jushi Holdings Inc. (OTCQX: JUSHF) is planning on buying Vireo Health’s (OTC:VREOF) Pennsylvania Medical Solutions, LLC as the company looks to strengthen its position in the state’s market. Jushi will pay Vireo $16.3 million in cash, a $3.8 million seller note, and assume a $17 million facility associated with a long-term lease obligation. The $37 million deal is expected to close by the end of August 20.

“This acquisition allows Jushi to expand its presence in one of the most attractive medical cannabis markets in the country,” said Jim Cacioppo, Chairman and Chief Executive Officer of Jushi. “Upon completion, Jushi will be able to provide high-quality, indoor flower and concentrates to our Pennsylvania patients who continue to experience constrained supply and high prices.  Furthermore, we will be well-positioned to support an increase in demand and maintain the ability to further scale up the facility if required.”

The acquisition operates a 90,000 sq. ft. facility with approximately 45,000 sq. ft. of high-quality, indoor cultivation when construction is complete. The property can also accommodate an additional 25,000 sq. ft. of indoor cultivation bringing the total to 70,000 sq. ft.

Pennsylvania has quickly shown its power in the cannabis industry with total sales of $524 million and 80 operational dispensaries. So far $215 million has been purchased by dispensaries from grower-processors and $309 million made by patients and caregivers at licensed dispensaries. Jushi says is has reaffirmed its revenue guidance for 2021 in the range of $200 and $250 million.

“This transaction secures Vireo’s capital position for the foreseeable future and will enable us to comfortably execute our fiscal year 2020 operating strategy and begin generating positive cash flow in the first half of next year without requiring any additional capital infusions,” said Founder & Chief Executive Officer, Kyle Kingsley, M.D.  Vireo said the money received from the sale will help it to increase scale in its core markets of New YorkMinnesotaMarylandArizona, and New Mexico. Vireo said that these projects are expected to significantly improve its near-term revenue and profitability outlook.

In addition to buying Pennsylvania Medical Solution, Jushi will have an option to buy  Pennsylvania Dispensary Solutions, a Pennsylvania medical marijuana dispensary permittee in the Commonwealth’s Northeast region.  PADS currently operates two medical marijuana dispensaries in Scranton and Bethlehem, with the right to operate one additional dispensary in the region. The option expires 18 months from the closing of the Agreement.

Financing

In order to help come up with the cash portion of the acquisition, Jushi announced it had received binding subscriptions totaling approximately $15.25 million for the issuance of 10% senior secured notes and warrants to acquire the subordinate voting share of which $12.35 million has been received. The company also said it received non-binding indications of interest for up to an additional $10 million of financing.  Jushi said it plans to use $15 million of the proceeds to fund the cash portion of the acquisition.

Jushi Chairman & CEO Jim Cacioppo subscribed for $1.5 million of the Notes with other insiders subscribing for $3.35 million of the Notes.


Debra BorchardtDebra BorchardtMay 11, 2020
BeyondHello-1280x853.jpg

3min3850

Multi-state operator, Jushi Holdings Inc.  (JUSHF) has launched its adult-use sales at a dispensary in Normal, Illinois (Bloomington-Normal metropolitan area) under the company’s BEYOND / HELLO brand.

“On this day two years ago, BEYOND / HELLO opened up its very first dispensary in Bristol, Pennsylvania. Several store openings later, we’re now expanding into one of the most attractive and fastest-growing adult-use cannabis markets in the country,” said Jim Cacioppo, Jushi’s Chairman, and Chief Executive Officer. “We continue to work aggressively to stay ahead of consumer demands while remaining nimble in our response to COVID-19. Our new online shopping platform delivers a more convenient and transparent shopping experience while providing an alternative way for our customers to engage with our BEYOND / HELLO retail brand.”

On Monday, the  BEYOND / HELLO Bloomington-Normal will begin serving adult-use customers through Jushi’s online shopping platform and through over-the-phone orders for in-store pickup. Medical patients can continue to shop in-store as well as place orders online and over-the-phone for either curbside or in-store pickup. The company said it expects to open an additional two storefronts in the state by year-end.

Canceling San Diego

As Jushi ramps up openings in Illinois, the company also announced that it was terminating an agreement to buy an operational adult-use and medicinal dispensary in San Diego, CA. That deal was originally signed in the third quarter of 2019 with Jushi planning to acquire 75% of the equity and voting interest in the San Diego dispensary for approximately $12 million. The deal was expected to close by the end of 2019, but Jushi believed the sellers had breached the agreement. The sellers disagreed and thought Jushi was in breach for not closing the deal.

The company said that by May 9, the sellers still hadn’t “cured the breaches to the agreement” and so the deal was killed.

Cacioppo said, “We will continue to pursue M&A opportunities in limited license jurisdictions within California that align with our core businesses and growth strategy. Jushi expects to close on its definitive agreement in Santa Barbara for one of the three dispensary licenses in that City during the third quarter of 2020, and a Jushi subsidiary received approval for a retail and delivery permit in Culver City, California last year. We remain confident that we can expand our presence within California by targeting limited license markets with high barriers of entry.”

 


Debra BorchardtDebra BorchardtMay 7, 2020
BeyondHello-1280x853.jpg

4min6180

Multi-state operator Jushi Holdings Inc.  (OTC:JUSHF) delivered its fourth-quarter and full-year earnings for the time period ending December 31, 2019, and pre-announced its first-quarter 2020 revenues. Overall, Jushi reported an increase in revenues, but also an increase in net losses as the expansion plans have been delayed as a result of the pandemic.

The company’s fourth-quarter revenues increased 68% sequentially to $6.0 million but reported a net loss of $17.1 million. The adjusted EBITDA loss was $(5.2) million. The company though still has a comfortable cash cushion of $51.2 million of cash and securities. It sold a minority interest in New York state medical marijuana license for a total estimated value of approximately $15 to $20 million (depending on the contingency payouts).

For 2019, the company delivered total revenue of $10.2 million with a net loss of $30.8 million. The adjusted EBITDA loss was $11.2 million.

“2019 was an extraordinarily productive year for the Company. We completed our going public transaction, successfully closed on, are under definitive agreements to acquire, or are in the process of building out several high-quality assets in Pennsylvania, Illinois, Virginia, California, Nevada, and Ohio,” said Jim Cacioppo, Chairman and Chief Executive Officer of Jushi. “For example, in Pennsylvania, we opened four medical dispensaries in the second half of 2019, bringing our total store count to six and expect to open an additional nine stores within the next twelve months. We expect to operate a total of 15 stores in Pennsylvania or 10 percent of the current overall market. In addition to the significant progress we made in our operations, we successfully raised $165 million through December 31, 2019, and an additional $20 million in January 2020.”

First Quarter 2020

The company felt comfortable in announcing its preliminary first-quarter 2020 revenue of $8.6 million, which was an increase of 43% sequentially. The amounts to an annualized revenue run-rate for March 2020 of approximately $50 million.

Cacioppo added, “In 2020, we remain focused on building out our high-quality footprint and pursuing attractive acquisition opportunities across the cannabinoid supply chain. We started the year very strong, acquiring two medical dispensaries in Illinois that come with an option to open up two additional dispensaries. Our dispensary in Sauget, IL (adjacent to East St. Louis) launched adult-use sales on March 2nd, and our dispensary in Normal, IL (Bloomington-Normal metropolitan area) is expected to transition to adult-use sales on May 11th.  We expect to open the two additional adult-use dispensaries in Illinois by year-end.”

COVID Delays

Jushi said that the COVID-19 crisis has caused delays in its plans to expand its footprint in key operating markets. “Specifically, regulatory and construction delays on current underway projects in Pennsylvania, California, Virginia, and Ohio may impact the timing as to when these new dispensaries and facilities become operational. Additionally, Jushi has prioritized the health and safety of its patients, customers, and employees, by limiting store hours to medical patients and those most susceptible to the virus.”

The company said it has also delayed the previously scheduled roll-out adult-use sales at its Illinois location in Bloomington-Normal metro area by several weeks, and now expects the dispensary to transition to adult-use sales on May 11th.


Video StaffVideo StaffOctober 4, 2019

1min9750

Creating an identity for your dispensary is key to getting customers in the door. Jushi Brands and its Beyond/Hello dispensaries are quickly setting themselves apart as a top-notch dispensary brand. Learn from these experts the key components to becoming a brand name in the dispensary world. Moderated by Brian Lauvray, Head of Development & Strategy MMLG with panelists Erich Mauff, Jushi Founder and President and Blythe Huestis VP Retail Operations Beyond/Hello. This panel was taped at the Green Market Summit in Los Angeles on September 11.


William SumnerWilliam SumnerAugust 14, 2019
daily_hit004-1280x533.png

6min8170

It’s time for your Daily Hit of cannabis financial news for August 14, 2019.

On the Site

Zenabis Global

Zenabis Global Inc. (TSX: ZENA) (OTC: ZBISF) reported that its second-quarter net revenue rose 78% to $25 million from last year’s $4.1 million for the period ending June 30, 2019. The company said that the results were achieved “despite being negatively impacted by temporary price reductions on inventory sold to provincial counterparties designed to help Zenabis to capture a larger share of the recreational cannabis market.”

Charlotte’s Web

Charlotte’s Web Holdings, Inc. (TSX: CWEB)(OTCQX: CWBHF), a producer of whole-plant CBD hemp extract products, reported its financial results for the second quarter ending June 30, 2019. The company’s revenue grew 45% to $25 million over last year’s $17.2 million for the same time period. The net income fell to $2.2 million from last year’s $3.7 million.

Who’s Really Buying CBD? And Why?

If you’re asking yourself who’s buying CBD products, just take a stroll to your local grocery store and mosey over to the vitamins and supplements section. Prepare to be overwhelmed by the thousands of nutraceutical “wellness” products filling the shelves – everything from melatonin chocolates for sleep-aid to echinacea for immune support – and yes, very recently products containing the compound that’s outshined Beyonce in popularity, CBD.

In Other News

Jushi Holdings

Today, Jushi Holdings Inc. released its financial results for the second quarter. Year-over-year, revenue for the quarter increased to approximately $200,000, and the gross profit was roughly $200,000. The net loss increased to $11.8 million, up considerably from $100,000 in the same period of the previous year. Despite low earnings and high losses, the company has a net working capital of $95.4 million, of which $86.7 million is in cash.

Sundial Growers

Sundial Growers Inc. (NADAQ: SNDL) has released their financial results for the second quarter. Gross revenue was $20.3 million. The net loss declined from $16.6 million in the first quarter to $12.4 million. Adjusted EBITDA was a loss of $500,000, up from a loss of $5.5 million. “Sundial accomplished great things this past quarter and our team’s solid execution across key areas of our business resulted in significant revenue growth,” said Torsten Kuenzlen, CEO of Sundial. “We are very confident in our go-to-market strategy, our strengthened balance sheet and our ability to execute upon organic growth opportunities.”

The Green Organic Dutchman

After the close of the market yesterday, The Green Organic Dutchman Holdings Ltd. (TSE: TGOD) reported their financial results for the second quarter. Revenue rose 20% over the previous quarter to $2.9 million. The net loss rose from $8.5 million in the previous year to $16.6 million.  “Q2 was pivotal for the Company as we began commercial production in the second phase of our Hamilton site and expanded our product line for the Grower’s Circle,” commented Brian Athaide, CEO of The Green Organic Dutchman.

Helix TCS

Today, Helix TCS, Inc. (OTCQB: HLIX), announced the release of its financial results for the second quarter. Quarterly revenue was $3.9 million. The gross profit was $1.9 million, with a gross margin of 49%. “We feel that we are still deeply undervalued due to our focus on execution as opposed to publicity, and are working to tell the simple truth of our constantly improving business and strong results,” said Helix TCS CEO and Executive Chairman, Zachary L. Venegas.

HempFusion

HempFusion, Inc. closed a brokered and non-brokered private placements of a total of 28,800,000 units of the Company at a price of US$1.25 per Unit for gross proceeds of US$36 million. The brokered portion of the Offering consisted of the sale of 26,227,650 Units for aggregate gross proceeds of US$32,784,563 and was completed by a syndicate of agents led by Canaccord Genuity Corp. and including Haywood Securities Inc. and PI Financial Corp. Due to demand, the Offering was upsized from US$20 million to US$36 million.


William SumnerWilliam SumnerJune 18, 2019
daily_hit004-1280x533.png

7min6760

It’s time for your Daily Hit of cannabis financial news for June 18, 2019.

On the Site

Luxury Cannabis is Not Going Away Anytime Soon

The world of cannabis is becoming more refined. When California first legalized medical cannabis in 1996, the only way one could purchase cannabis legally was through darkly-lit dispensaries with bars on the windows that were squirreled away in industrial parks. More than two decades later, the cannabis industry has evolved to a point where its consumers are more sophisticated and discerning, giving rise to a new sub-market within the industry: Luxury Cannabis.

MediPharm Labs

MediPharm Labs Corp. (LABS.V) (MEDIF) (MLZ.F) has applied to list its common shares on the Toronto Stock Exchange (TSX). MediPharm Labs continues to trade on the TSX Venture Exchange under the symbol “LABS”. This follows the company’s announcement that it had closed its previously announced bought deal offering of 13,514,000 common shares in the capital of the company at a price of $5.55 per common share for aggregate gross proceeds of C$75 million.

Surterra Wellness

Biotech company Intrexon Corporation (NASDAQ: XON) and cannabis company Surterra Wellness (Surterra) announced an exclusive global licensing agreement.  The two companies will join forces to help Surterra’s cannabinoid production by using Intrexon’s proprietary yeast fermentation platform. According to the company statement, yeast fermentation of cannabinoids provides advantages over conventional plant-based extraction.

Flowr Corp.

The Flowr Corporation (TSXV: FLWR)(OTC: FLWPF)  has received a loan commitment from a syndicate of lenders led by ATB Financial in its capacity as lead arranger and administrative agent for up to $50,000,000 of committed senior secured credit facilities.

Executive Spotlight: Ben Kovler, CEO, Founder & Chairman of Green Thumb Industries (GTI)

Ben Kovler brings his extensive experience managing complex operating companies and his deep commitment to philanthropy as Founder, CEO and Chairman of Green Thumb Industries.

In Other News

California Cannabis Enterprises

California Cannabis Enterprises (CCE) announced that it has appointed Daryl Kato as its Chief Operating Officer. Kato is the former chief financial officer (CFO) and board director at Nissin Foods USA and finance manager for confections and snacks at Nestle USA. “With an aggressive plan for continued growth and a commitment to expand our family of companies and world-class brands, attracting top talent like Daryl will give us a competitive advantage as the cannabis marketplace expands and matures,” said CCE CEO Kyle Kazan.

CAVU Resources

CAVU Resources, Inc. (OTCMKTS: CAVR) announced that it has applied to trade under a new symbol, “KUSH.” The change was requested because the company wants its symbol to reflect the new cannabis-focused direction the company is taking. CAVU is also seeking a regional accounting firm to provide audit services for 2017, 2018 and the current year to date 2019 so that it can start the procedure of up-listing to OTCQB.

Delta 9 Cannabis

Delta 9 Cannabis Inc. (TSXV: NINE) (OTCQX: VRNDF) announced that its previously announced offering will be for an offering size of a minimum of $10,000,000 and up to $14,000,000. Priced as $1,000 per unit, the company will issue between 10,000 and 14,000 convertible debenture units. The offering is being co-led by Mackie Research Capital Corporation, as sole bookrunner, and Canaccord Genuity Corp. as co-lead agents.

Jushi Holdings

Jushi Holdings Inc. (NEO: JUSH.B) has entered into an agreement to acquire an unnamed Phase I Medical Marijuana Dispensary Permit holder and three provisional Phase II Medical Marijuana Dispensary Permit holders for an aggregate of approximately $63 million. Of the $63 million, $27.11 million will be paid in cash, $27.5 million will be paid through the issuance of certain 10% secured notes, and the remaining balance will be paid through the issuance of approximately 3.38 million shares to the sellers of the purchased companies.



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

@GreenMarketRpt – 2 days

Illinois’ Adult Use Market Continues to Flourish ⁦@GTIGrows⁩

@GreenMarketRpt – 3 days

We apologize for our slow reporting this week. We were affected by the storm that came through the Northeast and ar…

@GreenMarketRpt – 5 days

RT : Unlike other hemp-infused beverages that contain CBD, these products are made with hemp seed oil.

Back to Top

You have Successfully Subscribed!