Jushi's Q3 Revenue Spikes 117% YoY, Bolsters Presence In Nevada With $62.5M NuLeaf Acquisition

Vertically integrated, multi-state cannabis operator Jushi Holdings Inc. JUSH JUSHF announced its financial results Wednesday for the third quarter of 2021, revealing a 13.1% sequential and 116.7% year-over-year increase in total revenue to $54 million.

The revenue growth was primarily driven by the build-out and expansion of Jushi's retail store base from 10 to 24 as well as the modest expansion of its wholesale business driven by an increase in cultivation and manufacturing activity. 

"Our financial performance in the third quarter demonstrates our ability to continue to drive strong top-line revenue growth and improved profitability, both on a sequential and year-over-year basis while continuing to invest in the business to support our future growth," said Jim Cacioppo, CEO, chairman and founder of Jushi, which is based in  Boca Raton, Florida.

Q3 2021 Financial Highlights

• Gross profit totaled $24.5 million, representing an increase of 11.4% sequentially and 99.6% year-over-year.
• Net income was $38.2 million, or $0.22 per basic share and a net loss of $0.08 per diluted share, compared to net income of $4.8 million, or $0.03 per basic share and a net loss of $0.08 per diluted share in the prior quarter.
• That's an increase of $33.5 million sequentially and $68.2 million year-over-year.
• Adjusted EBITDA came in positive at $6.4 million, up by 38.5% sequentially and 124.9% year-over-year.
• General, administrative and selling expenses totaled $24.3 million, a $0.6 million decrease as compared to $24.9 million in the second quarter of fiscal 2021.
• As of Sept. 30, the company had $59.1 million of cash and short-term investments, total current assets of $139.3 million, and current liabilities of $79.2 million.
• Networking capital at the quarter-end was $60.1 million.
• The company incurred approximately $14.8 million in capital expenditures during the period and $56.4 million year-to-date.

Q3 2021 Operational Highlights

• Expanded Nevada footprint with a definitive agreement to acquire The Apothecarium, an operating adult-use and medical cannabis dispensary in Las Vegas.
• Launched flower sales in Virginia with the introduction of The Bank and Sèche flower brands.
• Completed the acquisition of Nature's Remedy of Massachusetts, Inc., which includes two operating retail dispensaries and a cultivation and manufacturing facility in Mass.
• Opened the 21st and 22nd BEYOND / HELLO retail locations nationwide with the company's 14th and 15th stores in Pennsylvania.
• Completed the acquisition of a licensed cultivator as well as a licensed processor in Ohio and commenced operations at the processing facility.
• Awarded a conditional retail dispensary license in Illinois through its partner Northern Cardinal Ventures.
• Converted founder's super and multiple voting shares into subordinate voting shares.
• Announced the appointment of Brendon Lynch as executive vice president of retail operations.
• Announced the transition to domestic issuer status in the United States.

Cacioppo said the company revised and reduced its full-year 2021 revenue guidance range to $205 to $215 million, as well as 2021 Adjusted EBITDA guidance range to $21 to $25 million on an IFRS basis.

"We expect to accelerate our expansion plans by identifying and securing assets in new and existing markets and continuing to deliver a differentiated customer experience through our best-in-class retail and online platforms," Cacioppo added.

Jushi Expands In Nevada Via Acquisition Of NuLeaf

Separately, the company announced that it's acquiring Neveda-based NuLeaf, Inc. together with its subsidiaries and affiliated companies.

Deal details: Under the agreement, Jushi will pay $62.5 million as a consideration for the purchase of NuLeaf's operational dispensary assets, as well as cultivation and processing facilities.

The sum includes an upfront payment of $52.5 million, consisting of $15.75 million in cash, $21 million in subordinate voting shares of the company and a $15.75 million unsecured promissory note and up to an additional $10 million issued in an identical percentage combination of cash, company shares and unsecured promissory note, upon the occurrence or non-occurrence of the Las Vegas Strip Dispensary receiving regulatory approval to launch operations.

What It Means for Jushi: The acquisition, which is expected to close in the first half of 2022, brings Jushi two adult-use and medical marijuana dispensaries in Las Vegas and Lake Tahoe, a 27,000 square feet cultivation facility in Sparks, as well as a 13,000 square feet processing facility in Reno.

In addition, NuLeaf owns a third licensed retail dispensary located directly on Las Vegas Boulevard, which is expected to become operational in early 2022, or once it obtains all regulatory approvals.

What's Next: Following the transaction's closing, Jushi will grow its retail presence to four dispensaries in Nevada.

"This acquisition is expected to generate significant top-line growth and be immediately accretive, as well as increase market share of Jushi's best-in-class brands, and establish a leadership position in one of the largest cannabis markets in the U.S.," Cacioppo commented on the deal.

JUSHF Price Action

Jushi's shares traded 1.35% lower at $4.6311 per share after the market close on Tuesday.

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