Jushi Archives - Green Market Report

StaffApril 4, 2023


The Daily Hit is a recap of the top financial news stories for April 4, 2023.

On the Site

Jushi Accused of Fighting Competition in Massachusetts

MJ’s Market Inc., a small, closely held Massachusetts corporation established in May 2018, is accusing Jushi Inc. (OTC: JUSHF) of fighting its efforts to open a dispensary in Tyngsborough, which would be its second store in the state. Read more here.

High Times Back in Court for Failing to Pay Settlement in 420.com Deal

While the embattled High Times Holding Corp. waits for its equally financially impaired lender ExWorks to foreclose, the cannabis media company is being sued for reneging on the sale of a domain name – after being sent payment. Read more here.

Another Potency Lawsuit Filed – This Time in Arkansas

Yet another lawsuit has been filed alleging THC potency fraud in the cannabis industry, with the latest legal action coming in the medical marijuana market of Arkansas. A lawsuit filed by MMJ patient Jakie Hanan in federal court alleges that at least four licensed cannabis companies conspired to defraud patients by falsely increasing THC testing results. Read more here.

New Mexico Passes $300 Million in First Year of Recreational Cannabis Sales

New Mexico, one of the newest adult-use marijuana markets in the nation, just inched past $300 million in sales for its first 12 months of operations, which launched April 1, 2022. The Land of Enchantment is now home to 1,906 cannabis companies. Read more here.

In Other News

South Dakota

South Dakota Gov. Kristi Noem recently signed several bills into law amending the state’s medical cannabis regulations. Senate Bill 1 expanded the list of qualifying conditions, but it also eliminated the petition process for adding additional illnesses. Noem signed other laws as well that increase restrictions on the state’s MMJ program. Read more here.

New York

For the second time, New York’s Office of Cannabis Management has failed to meet its deadline to produce a social and economic equity plan. Described in the Marijuana Regulation and Taxation Act, the plan is meant to guide the rollout of the state’s adult-use marijuana industry. Read more here.

Khiron Life Sciences Corp.

Khiron Life Sciences Corp. (TSXV: KHRN) (OTCQB: KHRNF) closed its previously announced marketed public offering of units of the company, including the exercise in full of the over-allotment option. A total of 13.8 million units were sold at a price of $0.05 per unit for aggregate gross proceeds of $690,000. Read more here.

Debra BorchardtMarch 31, 2023


Jushi Holdings Inc. (CSE: JUSH) (OTCQX: JUSHF) reported total fourth-quarter revenue increased 16.6% to $76.8 million, an increase of 16.6% year-over-year and 5.5% sequentially.

The company released its unaudited preliminary financial results for the fourth quarter and full year ending Dec. 31, 2022.

Jushi attributed the increase to the expansion of its retail network in Massachusetts and Nevada, in addition to opening Beyond Hello stores in Pennsylvania and Virginia.

Its wholesale revenue also grew 38% due to continued growth primarily in Massachusetts, Nevada, and Virginia.

Still, the company delivered a net loss of $139 million in the quarter, driven primarily by asset impairment charges as well as lower fair value gain on derivatives, loss on redemption of the 10% senior notes, and higher interest expense. Jushi noted that the net loss was partially offset by an increase in gross profit and a decrease in income tax expense.

“In the fourth quarter, we were able to successfully complete a $73.1 million financing to redeem our senior secured notes that were due in January,” said Jim Cacioppo, chief executive officer, chairman, and founder of Jushi Holdings Inc. “That being said, we are very aware of the challenging capital market environment facing us and the broader cannabis industry. As a result, our executive team is making real-time changes to our capital allocation strategy as we navigate these challenges and ensure we make the right investment decisions to secure our leadership position across each of our core markets.”

For the full year, Jushi’s revenue jumped 35.8% over last year to $284 million. In 2022, Jushi opened seven stores, and ended the year with 35 operating dispensaries in six states, as compared to 28 in five states in 2021. The company reported a net loss of $202 million.

“Given the challenging macroeconomic backdrop our industry is operating under, I am pleased to report solid annual and quarterly top-line growth,” Cacioppo said. “Jushi experienced many bright spots over the course of the year, including rapidly growing our retail network across six markets and diversifying our house of brands and product suite.

“In addition, we made meaningful progress on the completion of our expansion projects in Pennsylvania and Virginia, were awarded a retail dispensary license establishing our fifth vertically integrated state operation in Ohio, brought on a record number of new Jushi active patients in Virginia’s budding medical market, and scaled our presence in the expanding Nevada market,” Cacioppo continued. “In 2023, we will continue our focused efforts to realize the full value of the asset base we have built and maximize the return on investment for our shareholders.”

The company has stayed focused on cost-savings by reducing employee headcount from approximately 1,570 total employees at its peak in 2022 to approximately 1,310 total employees today.

“We expect to move to a new labor model resulting in a total estimated 50% labor hour savings since April of 2022,” read the company statement.

Cash Levels

At the end of 2022, Jushi had approximately $27.1 million of cash, cash equivalents, and restricted cash.

In 2022, it spent roughly $55 million on expansion projects in Pennsylvania and Virginia. The company believes this is expected to lead to a reduction in capital expenditure in fiscal 2023.

Looking ahead, the company expects capital expenditures for new projects to be roughly $13 million, of which approximately $6 million is discretionary growth capital.

The company has approximately $206.4 million in principal amount of total debt, excluding leases and property, plant, and equipment financing obligations.

The company cautioned that these results are only preliminary and that final results will be posted to the SEC once the accounting is fully completed.

Debra BorchardtDecember 12, 2022


Jushi Holdings Inc. (CSE: JUSH) (OTCQX: JUSHF) made some financial moves as the year winds down. Jushi announced the second closing of its previously announced private offering of 12% second lien notes and detached warrants to purchase the company’s subordinate voting shares at an exercise price of $2.086. Jushi also entered into a sale-leaseback situation on equipment.

Debt Deal

To date, Jushi has closed on an additional $3 million for a total of $72 million in gross cash proceeds and issued $72 million aggregate principal amount of Notes and approximately 17 million of warrants to investors in the Notes. As of September 30, 2022, the company had approximately $209 million in principal amount of total debt, excluding leases and property, plant, and equipment financing obligations.

The company stated that the Notes will mature on December 7, 2026, and will bear interest of 12.0% per annum, payable in cash quarterly, and will be guaranteed by certain of the company’s direct and indirect domestic subsidiaries and secured by second priority liens on certain assets. In connection with the Offering, the purchasers of the Notes also received four-year Warrants at 50% coverage with an expiry date of December 7, 2026, at an exercise price per share equal to $2.086.

Entities affiliated with Jim Cacioppo, Jushi’s Chief Executive Officer, Chairman, and Founder, subscribed for $3.0 million of the Notes, and Denis Arsenault, a significant stockholder of the company, subscribed for $14.4 million of the Notes. Based in Switzerland, Arsenault acquired 3,452,595 warrants of Jushi. Each Warrant entitles him to buy one subordinate voting share of the Issuer at a price of $2.086 until December 7, 2026.

Sunstream Gets Warrants

Last week, Jushi changed its existing $100 million Senior Secured Credit Facility with SunStream Bancorp. Under the terms of the Amended Acquisition Facility, Jushi’s loan will be a first lien term loan capped at $65 million, bear an interest rate of 11% per annum, payable quarterly, will no longer carry a standby fee, and will mature on December 31, 2024. The financial covenants in the Amended Acquisition Facility have been changed to remove the total leverage ratio covenant and replace it with a minimum quarterly revenue covenant. Additionally, in connection with the Amended Acquisition Facility, the company has made a one-time issuance to SunStream of 2.0 million subordinate voting share purchase warrants issued at $2.086.

Equipment Financing

Jushi entered into an equipment lease financing facility with XS Financial (OTCQB:XSHLF) (CSE:XSF), together with a related equipment funding commitment of up to $10 million valid through August 2, 2023, subject to the terms and conditions of such facility agreement. Within that commitment and pursuant to such facility agreement, the Company expects to conduct approximately $2.0 million in sale-leasebacks of certain company-owned equipment, subject to customary closing conditions. Further, the company also plans to draw down an additional $1.9 million on an Arlington, Virginia real estate mortgage facility in the first quarter of 2023.

Debra BorchardtJuly 6, 2022


Bank buildings are becoming attractive locations for cannabis dispensaries, but fortified vaults aren’t the reason. The banking industry has been closing bank branches by the thousands. According to the National Community Reinvestment Coalition, 9% of all branch locations in the U.S. closed between 2017 and 2021 or roughly 7,500 brick and mortar locations. This move really picked up steam during the pandemic when most people migrated to online banking. Bank consolidation and improvements in mobile banking have also contributed to the banks giving up their locations. 

The number of bank locations peaked in 2009 at 92,394 individual physical branches, but then the financial crisis of 2007 set off a spiral of bank failures and consolidation. Banks have closed more than 13,089 branches since 2009. That means a lot of real estate has opened up for new renters.

Travis Goad, Managing Partner of Pelorus Equity Group said, “While this isn’t a widespread trend that we are seeing emerge across the country just yet, we see how a bank’s attributes would be appealing to cannabis retailers. Brick-and-mortar banks tend to have built-in features that could benefit a cannabis retailer. In addition to security features, banks are typically located in high-traffic locations with an interior that is designed to move the flow of foot traffic — and many are currently unoccupied. While the cannabis industry has seen steady growth in the last several years, the banking industry has faced accelerated branch closure rates, which doubled during the pandemic.”

It would seem that the bank vault would be the big draw since cannabis dispensaries handle a lot of cash and often have to lock up inventory, but that isn’t the case. 

It’s Not The Vault

 Andy Poticha, Principal of Cannabis Facility Construction said, “People assume because a bank has a vault, that bank vault can be reused in a dispensary. In most cases this is not true as the vaults in banks are very small particularly because there are intentionally smaller amounts of cash on site. The smaller vaults are useless for dispensaries because they’re not big enough to house what the cannabis facilities need for dispensing product.”

 Virginia Maggiore from RDC Cannabis Facility Construction came to a similar conclusion, “We have a project in Fresno in an old bank building which worked the existing vault room into the design as storage for cannabis products during sales hours and also as secure vault storage overnight. We often have to build a new secure room in retail dispensary spaces, so when we can work with existing vault spaces we are often able to save on cost and time. In my experience, building a new secure room can cost anywhere between $8,000-$10,000, or even up to hundreds of thousands of dollars in areas where local regulatory bodies require a more intense security setup, such as requiring a cannabis company to meet UL Standards.”

Security expert Tony Gallo, Managing Partner of Sapphire Risk Advisory Group said, “An advantage of renovating an old bank is that they are well-constructed and the likelihood of a breach from the exterior through the walls or ceiling is low. Another appeal is that old bank buildings have a reputation for being safe and secure and are typically not targets of crime.”

Drive Through Lanes

One thing that does appeal to some of these banks to bud building redos is the drive-through lanes. Poticha said, “It’s my opinion that the reason why cannabis dispensary owners are looking into using bank buildings has absolutely nothing to do with security but is completely related to the fact that those structures already have built-in drive-throughs. Many cannabis companies today believe that drive-through use will be a future approval even though the local jurisdiction may not have approved adult-use or might not ever considered allowing the use of drive-throughs. The fact that bank building drive-throughs have pneumatic tube systems is most desirable particularly as it relates to the transaction/express nature of preorders. We have worked with cannabis companies in West Virginia and New Jersey who have been very proactive in buying, renovating, and opening dispensaries in former banks with drive-up lanes but leaving them unused with the anticipation and expectation that one day the conversation for this method of product delivery to clients will begin and be accepted.”

Gallo said, “The bank drive-through lines could definitely be a benefit for cannabis dispensaries seeking to operate curbside pickups. I’ve had a few clients successfully integrate pneumatic tube systems into their operations to transport cannabis to the sales floor from the vault, and this could also be adapted to facilitate curbside sales. The pneumatic tubes could easily be used to check IDs, exchange payment, and transport cannabis.”

Bank Building 

One successful bank renovation is the Jushi (OTC: JUSHF) Beyond Hello medical cannabis dispensary located in Pottsville PA. The former old Schuylkill Trust Co. building was built in 1923 and is a classic “small-town skyscraper” with six stories of offices above the large banking hall. BEYOND / HELLO Pottsville occupies the first-floor banking hall, and special care has been taken to blend the modern retail style seamlessly with the former bank’s turn-of-the-century elegance. Andreas “Dre” Neumann, Chief Creative Director of Jushi said, “It is important to understand that because of regulations, and security and safety standards, we rarely get to take advantage of existing interior architectural design. We had high hopes of initially incorporating the historic bank vault in some shape or form into the design of the dispensary, but unfortunately, we were not able to. However, the exterior of the historic building has been carefully preserved and remains an important landmark in the downtown area.”

On top of that, one of Jushi’s cannabis brands is called The Bank and plays on the idea of banking with flower categories like Gold Standard and Vault.


Of course, dispensaries will need to do some legwork when assessing a bank building as a potential location. Gallo said, “Prior to purchasing or leasing an old bank to be a cannabis dispensary, you should determine where the current safe or vault is located to ensure it can facilitate the operations of a dispensary. For example, in one old bank, the vault was located on the basement level, with was not compatible with the operation of the business, and another vault had to be installed on the main floor. At another location, the vault was constructed in the middle of the sales floor and did not comply with regulatory guidelines.”

He added, “There is a misconception that renovating an old bank building is cheaper than renovating an existing retail space, but in my experience, this is not always the case. I have seen secure storage construction cost twice as much in a bank than it would in other properties.”

Debra BorchardtJune 16, 2022


Cannabis companies are cheering a court ruling that will allow the sale of vape products in the state again. Yesterday a Commonwealth Court judge ruled that Pennsylvania medical marijuana companies could resume selling vapes that were taken off the shelves in February in a controversial recall. Earlier this year, the state regulators published a list of over 500 vape products they deemed could not be sold because they did not meet FDA requirements. However, products included in the recall had previously been approved by the state Department of Health for more than three years and the recall specifically focused on medical marijuana vaporization products that contained terpene additives.

Two lawsuits resulted from the recall. According to Law360, “Medical Marijuana Access and Patient Safety Inc., a nonprofit made up of dispensaries, growers, processors, certified patients that use medical marijuana vaporization products, and other industry stakeholders, filed suit against three high-ranking members of the state DOH in February in Pennsylvania state court.” At the time, the court authorized the recalled products to be held in quarantine instead of being destroyed until a decision was reached.

One of the companies affected by the case, Jushi Holdings (CSE: JUSH) (OTCQX: JUSHF) released the following statement:

On behalf of Pennsylvania’s medical marijuana patient community, we would like to extend our appreciation to the Commonwealth Court for its thoughtful assessment of the facts and circumstances upon which DOH’s February recall of tested, approved medical marijuana vaporization products containing terpenes was based, and for the subsequent orders issued on June 2 and June 15 allowing responsible operators to again make these products accessible to patients.

In light of the Court’s Orders, impacted products will be back on the shelves of BEYOND/HELLOTM dispensaries today and the shelves of our partner dispensaries across the Commonwealth in the coming days.

After receiving documents and testimony offered by MMAPS, the Court came to the unambiguous conclusion that DOH “failed to present any evidence” of potential harm to medical marijuana patients associated with the recalled products,” noting that the Department did not call any witnesses or present any evidence of patient complaints or adverse events during the preliminary injunction hearing.

Under Pennsylvania law, all medical marijuana products, including the recalled vaporization products, are subject to rigorous, redundant safety and quality testing and Department approval before they can be manufactured or dispensed. As to the recalled products specifically, DOH was neither able to cite a safety or quality testing deficiency nor a single adverse event relating to any recalled products.

“The Court’s June 2 and June 15 Orders are about more than just preserving patient access to tested, approved, and for many patients, effective medical marijuana products – they deliver peace of mind to thousands of Pennsylvanians that health risks cited by the Department could not be substantiated in any way or any extent.  In fact, the Court noted the Department itself approved the recalled products for patient use following stringent quality and safety testing and found no evidence of a single adverse event related to any recalled product.”  said Jim Cacioppo, Chief Executive Officer, Chairman, and Founder for Jushi Holdings Inc.

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