Jushi Archives - Green Market Report

Debra BorchardtDebra BorchardtNovember 23, 2020
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9min1540

Jushi Holdings Inc.  (OTCMKTS: JUSHF) said it is planning a $50 million expansion project in Scranton, Pennsylvania which is expected to create more than 100 more new jobs in the Scranton area. The company said it plans to nearly double the square footage of its subsidiary’s grower-processor facility from approximately 90,000 sq. ft. to more than 160,000 sq. ft. in a phased expansion.

In 2019, the company opened the medical marijuana dispensary BEYOND / HELLO Scranton. Jushi already employs 70 people in the Scranton area and once this expansion is completed, it will have added 17 new jobs to the region. For the expansion, the company also plans to hire all local construction, electricians, and vendors for its expansion efforts.

“The medical cannabis market in Pennsylvania is rapidly growing and with our products in high-demand, this investment will significantly expand our cultivation capacity and market share,” said Jim Cacioppo, Chief Executive Officer, Chairman, and Founder of Jushi. “This is a robust operating environment and with the market intelligence gained through our eight currently operating BEYOND / HELLO retail dispensaries, we believe that patient demand for high-quality, medical-grade cannabis products is still far from being satisfied. We are very excited by the opportunity ahead of us in Pennsylvania, and as one of the fastest-growing jobs sectors in the U.S., Jushi and its subsidiaries look forward to bringing additional new local jobs and tax dollars to the region and further investing in Scranton’s economy and community.”

Pennsylvania

Pennsylvania’s Republican legislature continues to block the adult-use legalization measure despite the state’s widening budget gap.  PA Governor Tom Wolf has been pushing for the legalization of cannabis for adults and looking for ways to close the budget gaps. If adult-use legalization were to pass in PA, the cannabis industry would likely double to triple in size, which would only create more taxes for state and local coffers and jobs in PA. The state is also facing pressure from its border with New Jersey which is planning on fast-tracking the legalization of adult-use cannabis. This could negatively impact the medical market in the state.

Expansion Plans

Jushi said that the majority of the approximate 70,000 sq. ft. expansion project will be focused on increasing the facility’s canopy space, which upon completion will nearly triple to approximately 98,000 sq. ft. In a statement, the company said that the first phase of the expansion is expected to come online in mid-2021 and the final phase will be completed by the second quarter of 2022. In total, Jushi expects to invest approximately $50 million in the expansion project, which is expected to create more than 100 new jobs in the Scranton area. Jushi (through its subsidiary Pennsylvania Medical Solutions, LLC), will work with Innovative Industrial Properties Inc. (NYSE: IIPR)  (through its subsidiary IIP-PA 1 LLC) to partially finance the expansion project via an upsize to the existing lease agreement between the parties. The expansion project is subject to the company’s successful completion of certain milestones, including receipt of all local and state approvals and permits, and the finalization of a mutually agreed lease amendment with Innovative Industrial Properties Inc. related to the Facility.

The company reminded investors that it recently completed an expansion project in the third quarter of 2020, which included increasing the facility’s indoor cultivation from approximately 20,000 sq. ft. to approximately 45,000 sq. ft. (~33,000 sq. ft. of canopy) and supplementing the current CO2 extraction with new Class I, Division 1 ethanol extraction technology. The facility produces high-quality, indoor-grown flower and extracts and is strategically located within minutes of Interstate 81, Interstate 84 and the Pennsylvania Turnpike, enabling efficient wholesale distribution to the 98 dispensaries currently operating across the commonwealth, including the Company’s eight operational BEYOND / HELLO dispensaries. The facility is expected to supply the company’s subsidiaries and other licensed retail facilities.


Debra BorchardtDebra BorchardtOctober 1, 2020
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3min2770

Jushi Holdings Inc. (OTCQB: JUSHF) announces rising revenue after releasing preliminary financial results. The company is estimating revenue of $24 million for its third-quarter ending September 30, 2020, a change from its previous guidance of $22-$25 million and a sequential increase of 61%. The guidance for revenue in the fourth-quarter ending December 31 is now expected to be at the high end of the previously announced range of $25-30 million and Jushi said it expects to report positive adjusted EBITDA. The total fiscal year 2021 revenue has been revised from $200-250 million to $205-255 million and the adjusted EBITDA is expected to be between $40-50 million.

“By selectively investing our shareholders’ capital in high-growth markets with strong barriers to entry across the country, we’ve positioned Jushi for sustained, long-term profitable revenue growth,” said Jim Cacioppo, Chief Executive Officer, Chairman and Co-Founder of Jushi. “To complement our strong operating assets, we have also carefully curated a team of experienced executives with diverse backgrounds and industry experiences to lead Jushi as we continue to scale our operations and grow our market share.”

The company detailed the revenue by state in a release as follows:

On a geographic basis, the fiscal year 2021 total revenue is expected to break down in each state where Jushi is currently active:

    • Pennsylvania: $95 – 110 million
    • Illinois: $70 – 80 million
    • Virginia: $17 – 25 million
    • California: $12 – 20 million
    • Nevada: $5.5 – 10 million
    • Ohio: $5.5 – 10 million
  • Operating cash flow positive in fiscal year 2021

Jushi also confirmed that as of August 31, 2020, it had approximately $44 million of cash, as well as $7.5 million in marketable securities.

In August, Jushi attributed the increase in revenue to its acquisition of two medical marijuana dispensaries in Illinois, one of which began serving adult-use customers in March and the other in May. There was also strong organic revenue growth at the BEYOND/HELLO stores in Pennsylvania, and successful procurement of product in these two supply-constrained markets.

Mr. Cacioppo added, “Our projections do not include any significant changes in the regulatory environments. We’re thrilled with the great performance Jushi has achieved to date and encouraged by the immense opportunity ahead of us.”


Debra BorchardtDebra BorchardtJuly 13, 2020
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3min6520

 Jushi Holdings Inc. (OTCQX: JUSHF) announced $15.25 million in debt financing. To date, The company said it has received cash proceeds of $16.325 million and additional binding subscriptions, for a pro forma total issuance of $17.425 million of 10% senior secured notes and warrants to acquire a subordinate voting share. The company also received non-binding indications of interest for up to an additional $10 million of financing.

The money will be used for the cash portion of a previously announced Pennsylvania grower-processor permit holder transaction.  Last month the company said it was planning on buying Vireo Health’s (OTC:VREOF) Pennsylvania Medical Solutions in an effort to strengthen its position in the state’s market. Jushi was to 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.

Debt Terms

The company said in a statement that all Notes would mature on January 15, 2023, and will bear interest of 10.0% per annum payable in cash quarterly. Jushi’s obligations under the Notes are secured by the assets of Jushi and certain of its subsidiaries (subject to certain exclusions) and are also guaranteed by certain subsidiaries of the Company and rank pari passu with the currently outstanding 10% senior secured notes of the Company.  In connection with the Offering, the purchasers of the Notes will also receive Warrants to acquire subordinate voting shares of the Company at 75% coverage with an expiry date of December 23, 2024, at an exercise price equal to US$1.25 (~CAD$1.70 as of 7/10/20).  The Warrants contain a cash-less exercise (net settlement) option available 12 months after issuance.

Jushi’s Chairman & CEO Jim Cacioppo subscribed for US$1.5 million of the Notes with other insiders and management subscribing for US$3.475 million of the Notes.


Debra BorchardtDebra BorchardtMay 11, 2020
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3min5910

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 BorchardtMarch 25, 2020
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4min12860

Multi-state operator Jushi Holdings Inc.  (CSE: JUSH) (OTCQX: JUSHF) said that its dispensaries received the “life-sustaining” business designation in Pennsylvania and the “essential services” designation in Illinois. As a result, the company’s six dispensaries in Pennsylvania, operating under the brand “BEYOND/HELLO,” and its two dispensaries in Illinois, operating under the brand “The Green Solution” (transitioning to BEYOND/HELLO branding later this year), will remain open.

The Company is announcing several initiatives prioritizing its medical patients and customers most susceptible to COVID-19 during the pendency of the COVID-19 outbreak:

  • Pennsylvania – Effective immediately, BEYOND/HELLO dispensaries will only serve patients 50 years or older in the first hour of operations. Curbside pick-up will begin to be offered at three PA dispensaries starting March 30th. Curbside pick-up available at Bristol, West Chester and Scranton PA locations.
  • Sauget, Illinois – Beginning March 30th, The Green Solution dispensary will only serve medical patients on Mondays. In addition, starting on March 31st, The Green Solution dispensary will serve only medical patients and customers 50 years or older during the first hour of operations. Curbside pick-up will also be offered to medical patients beginning March 26th.
  • Normal, Illinois – Beginning March 31st, The Green Solution dispensary will only serve patients 50 years or older in the first hour of operations. Curbside pick-up will also be offered to medical patients beginning March 26th.

As of March 25th, Jushi acquired the two Illinois dispensaries on January 30th and has subsequently begun serving adult-use customers at its Sauget location as of March 2nd. Through the first three weeks of March, company-wide retail revenues were approximately $3 million, an increase of approximately 70% as compared to February 2020.

“I am proud of all of our team members for responding quickly and appropriately during this rapidly evolving and uncertain time globally. Thus far in March, we have seen a significant increase in traffic and demand, which is a reflection of the loyalty of our customer base. Going forward, we will continue to closely monitor the status of our operations and make adjustments as needed to ensure the health and safety of our patients, customers, and employees,” said Jim Cacioppo, Chairman and Chief Executive Officer of Jushi.

Insider Buying

In a separate announcement, Jushi said that insider Denis Arsenault acquired shares and sold notes and warrants. “Following the completion of the acquisitions and dispositions of the Specified Securities as outlined above, the Acquiror holds $7,500,000 of the Notes, 4,000,000 multiple voting shares of the Issuer, 2,329,162 Subordinate Voting Shares and 11,174,206 Warrants, which represent in the aggregate, on an as-converted basis, 17.01% of the Subordinate Voting Shares issued and outstanding.


Debra BorchardtDebra BorchardtJanuary 31, 2020
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3min5460

While many have complained of capital drying up in cannabis, Jushi Holdings Inc. just upsized its round of financing due to new investors. The company announced the receipt of $35.65 million in proceeds and $9.56m of exchanged debt in connection with its previously announced debt financing.

Jim Cacioppo, Chairman, and CEO of Jushi Holdings Inc. stated, “We are pleased with the upsizing of our financing providing working capital that will allow Jushi to continue making progress on its growth objectives and expansion efforts into 2020 and beyond. This capital will support our continued investment in each territory we are currently operating in, positioning Jushi to achieve $200 to $250 million in revenue in 2021.”

Jushi has received cash proceeds of $35.65m for debt financing. Additionally, $9.56m of debt assumed in Jushi’s acquisition of TGS Illinois Holdings, Inc. has been exchanged into the Warrant Notes with a slightly different redemption right.  Including this exchanged debt, the total debt issued in Jushi’s debt financing is approximately $47 million

Terms of the Deal

Investors were given two financing structures. The first structure was a senior secured promissory notes that will mature on January 15, 2023, will bear interest at 10.0% per annum, payable in cash quarterly, and are issued with warrants to acquire Class B Subordinate Voting Shares of the Company at 75% coverage. The Warrants have an expiration date of December 23, 2024, and an exercise price of ~US$1.58 (~CAD$2.08 as of December 23, 2019). The second structure was original issue discount senior secured promissory notes maturing on January 15, 2023. The OID Notes will bear interest at 10.0% per annum, payable in cash quarterly. The combined annual yield on the OID Notes totals 17%. In addition to the maturity dates, both structures have the same key terms. The Company’s obligations under both the Warrant Notes and the OID Notes are secured by the assets of the Company and certain of its Subsidiaries (subject to certain exclusions) and are guaranteed by certain Subsidiaries.


Debra BorchardtDebra BorchardtJuly 5, 2019
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3min17530

Jushi Holdings Inc. (NEO: JUSH.B), signed a definitive agreement to acquire its first operational adult-use and medicinal dispensary in San Diego in a deal valued at $12 million. Jushi is getting 75% of the equity and voting interest in the dispensary. The deal is expected to close in the third or fourth quarter of this year.

“The California market is a core part of our growth strategy with a very sizable addressable market that, to put in perspective, is larger than Canada,” said Jushi CEO and Chairman, Jim Cacioppo. “San Diego, specifically, is a market that we have strategically chosen to establish our footprint in due to the limited nature of the licenses and restrictive zoning. Our partners in San Diego have built a fantastic store with a loyal customer base, which offers consumers a wide variety of high-quality products, is easily accessible off the highway and offers a well-located springboard for future delivery to San Diego and neighboring cities. We view this partnership as one of many sought by Jushi throughout California and, together with previously announced transactions, pending applications, and future expansion in the state, we look forward to continued announcements in due course.”

Terms

The company said in a statement that the $12 million will be paid 50% in cash and 50% by way of issuance of certain 8% secured notes to the sellers maturing after 18 months, and convertible at the option of the holders on or prior to the maturity date into Subordinate Voting Shares of the company, at a conversion price based on a specified historical volume weighted average trading price of the shares on the NEO exchange, subject to a minimum of $2.30 and a maximum of $2.875 per Share.

California has nearly 40 million residents and the longest-running medical cannabis program in the country. San Diego is the second largest city in California with a population of approximately 1.4 million and over 35 million visitors each year. San Diego is also a limited license market with a maximum of 36 total retail cannabis licenses divided among 9 council districts. To date, 19 retail cannabis licenses have been issued in the city, 17 of which are operational.

 


Debra BorchardtDebra BorchardtJune 10, 2019
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3min10630

Jushi Holdings Inc. began trading on the NEO Exchange on Monday, June 10 under the symbol (NEO:JUSH). The company is fairly new and is known for its recently launched a full spectrum CBD – hemp-derived product line called Mend. The company has plans to build out a significantly large hemp processing facility, Sound Wellness, a Jushi subsidiary to execute on the hemp opportunity.

“Listing on the NEO provides Jushi a solid foundation to build on its current growth trajectory as well as access new shareholders through the capital markets as a public company,” said Jushi CEO and Chairman, Jim Cacioppo. “At the same time, this does not affect Jushi’s disciplined focus on optimal capital allocation and deal structuring to maximize shareholder value.”

The listing follows the previously announced reverse takeover of a Canadian public company, Tanzania Minerals Corp. The public company was then renamed Jushi Holdings in connection with the reverse takeover and the listing on the NEO.  Jushi raised approximately $68.2 million through a brokered and non-brokered private placement.

Jushi also recently acquired the trademarks The Clinic, The Clinic Consulting Services, The Bank and The Lab as well as, subject to certain limited exceptions, intellectual property derived from the operations of The Clinic Colorado. The Clinic Colorado is a Denver-based cannabis company known for its intellectual property concerning cannabis cultivation, processing, retail distribution, compliance, and safety in multiple states. Jushi paid $4,115,000 in cash and $5,885,000 worth of shares in relation to this asset purchase.

Earlier this year Jushi’s subsidiary Sound Wellness received approval of its industrial hemp-CBD processor license application as part of the New York State Industrial Hemp Agricultural Research program, administered by the New York State Department of Agriculture and Markets. By investing over $5 million in a high-tech hemp processing operation on the east side of Buffalo, NY, Jushi expects to create approximately 30-65 jobs in the area. The facility will house a state-of-the-art lab, allowing Sound Wellness to create advanced product formulations using CBD distillate, CBD isolate, and water-soluble CBD.

In California, Jushi is going after several retail locations with delivery capabilities and those with vertically integrated capacities but those retail licenses are only at the pending stage. There is a definitive agreement in Nevada to acquire a cultivation license, manufacturing license, industrial hemp license, and a distribution license (application pending) subject to regulatory approval.

 


StaffStaffFebruary 5, 2019
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6min9070

It’s time for your Daily Hit of cannabis financial news for February 5, 2019.

On The Site

Verano

Illinois-based Verano Holdings, LLC has acquired Four Daughters Compassionate Care Inc. of Sharon, Massachusetts and its provisional medical cannabis licenses for an undisclosed amount. The first cultivation and dispensary facilities in Sharon are expected to open in six to nine months. The company said it would hire 50-75 employees locally and train them for these sites in 2019.

As a result of the acquisition, Verano has begun building a cultivation and production facility in Sharon Massachusetts. The company is also renovating an adjacent building for the dispensary. The acquisition marks Verano’s expansion into an additional adult-use market and its expanding geographic footprint into the Northeast from its current 10 operating facilities in Illinois, Maryland, Nevada and Florida, with 45+ licenses under active development in Florida, Michigan, Ohio, Puerto Rico, and Maryland.

GTI

Green Thumb Industries Inc. (OTCQX: GTBIF) is acquiring For Success Holding Company, the owner of Los Angeles-based Beboe branded cannabis products for an undisclosed amount that will be paid in GTI stock.

Beboe is known as a premium brand for its high-end packaging including its iconic rose gold vaporizer pens. The products are available in more than 125 California and Colorado retail locations and via home delivery across California.

In Other News

Jushi

Sound Wellness LLC, a subsidiary of Jushi Inc. has received approval of its industrial hemp-CBD processor license application as part of the New York State Industrial Hemp Agricultural Research program, administered by the New York State Department of Agriculture and Markets. With this announcement, Jushi is proud to support the Western New York community, New York farmers, and the nation’s premier industrial hemp program. Sound Wellness’ hemp-CBD processor license supports the company’s initiative to create product innovations centered around the untapped potentials of hemp.

By investing over $5 million in a high-tech hemp processing operation on the east side of Buffalo, NY, Jushi expects to create approximately 30-65 jobs in the area. The facility will house a state-of-the-art lab, allowing Sound Wellness to create advanced product formulations using CBD distillate, CBD isolate, and water-soluble CBD.

The Flowr Corp.

The Flowr Corporation (OTC: FLWPF)  has submitted an application to list its common shares on The NASDAQ Capital Market and has filed a Form 40-F Registration Statement with the U.S. Securities and Exchange Commission.

Target Group Inc.

Target Group Inc. (OTCQB: CBDY) entered into an agreement to acquire Massachusetts-based CannaKorp Inc. CannaKorp is the holder of the patent-pending WISP vaporizing system.

The WISP™ is a pod-based, herbal vaporizing system that uses precisely measured, sealed and tested WISP™ Pods containing dried, ground botanicals. The WISP™  vaporizer, used together with WISP™  Pods, gives cannabis users the predictability and assurance to know what they’re inhaling with every use, without the hassle of grinding, measuring, or packing. For the rapidly evolving market of cannabis consumers who prefer vaporization, Wisp™ presents a proven method of delivery with unique bioavailability benefits and avoids the health concerns associated with the combustion of cannabis and other herbs.

Origin House

CannaRoyalty Corp. d/b/a Origin House  (OTCQX: ORHOF) entered into an agreement to provide strategic financing of US$704,000 to Humboldt’s Finest, an alliance of heritage cannabis farms representing Humboldt County. Humboldt’s Finest produces sun-grown cannabis flower on their farms in Humboldt County, California, which is processed into products including jarred flower, pre-roll flower joints, live resin dabs/jars and/or live resin cartr



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