First Quarter 2021 Highlights
- Total revenue of $41.7 million, an increase of 29.0% sequentially
- Gross profit of $20.1 million, an increase of 14.1% sequentially
- Net loss of $26.1 million, driven primarily by the increase in the derivative warrant liability, interest expense, income tax expense, and losses on debt extinguishment
- Adjusted EBITDA1 of $3.0 million
- $167.9 million of cash and cash equivalents and investments in securities on the balance sheet as of March 31, 2021
1 Adjusted EBITDA, which is a non-IFRS measure, excludes certain items which are detailed and reconciled to the most comparable IFRS-reported measure in the attached “Reconciliation of Non-IFRS Measures” at the end of this press release.
Boca Raton, Florida – May 28, 2021 – Jushi Holdings Inc. (“Jushi” or the “Company”) (CSE: JUSH) (OTCMKTS: JUSHF), a vertically integrated, multi-state cannabis operator, announced its first quarter 2021 ended March 31, 2021 financial results. All financial information is provided in U.S. dollars unless otherwise indicated. The Company is also providing an update with respect to the filing of the Company’s audited annual financial statements for the year ended December 31, 2020, the related management’s discussion and analysis, related CEO and CFO certificates and annual information form for the year ended December 31, 2020 (collectively, the “Documents”).
As previously reported, the Company’s auditor, MNP, had advised the Company that they expected to complete the audit and the filing of the Documents by May 28, 2021. Last night MNP has yet again notified the Company that it requires additional time to complete its audit procedures. MNP is now advising the Company that it expects to be ready to sign off on the audit by Friday, June 4, 2021, at which time the Company plans to file the Documents on SEDAR. The Company is not aware of any material issue with the auditor’s review and expects an unqualified opinion.
This additional delay in the filing of the Documents will also result in a delay in the Company filing its MD&A and consolidated financial statements for the first quarter ended March 31, 2021, which the Company expects will be filed at the same time as filing the Documents. The Company’s previous public filings may be found on SEDAR at www.SEDAR.com.
Recent Developments
- Closed acquisition of a 93,000 sq. ft. facility and nine acres of surrounding land operated by its wholly-owned subsidiary and Virginia-based pharmaceutical processor, Dalitso LLC
- Acquired 100% of the equity of Organic Solutions of the Desert, LLC, an operating dispensary located in Palm Springs, California, and approximately 78% of the equity of a retail license holder located in Grover Beach, California with the rights to acquire the remaining equity in the future
- Signed a definitive agreement to acquire Nature’s Remedy of Massachusetts, Inc., a vertically integrated, single-state operator in Massachusetts, operating two adult-use retail dispensaries and a 50,000 sq. ft. cultivation and production facility
- Completed previously announced acquisition of an established Nevada operator
- Commenced first phase of its previously announced expansion project at its Pennsylvania grower-processor facility
Management Commentary
“We continued to achieve solid operational and financial performance in the first quarter of 2021,” stated Jim Cacioppo, Chief Executive Officer, Chairman and Founder of Jushi. “In the first quarter, we delivered a substantial increase in both revenue and gross profit, and reported positive Adjusted EBITDA for the third quarter in a row. We also solidified our balance sheet through two successful equity transactions, which resulted in gross proceeds of approximately $86 million.”
Mr. Cacioppo continued, “Looking ahead to the remainder of 2021, our shared focus remains on three main areas of growth, first, the continued build-out of our BEYOND / HELLO™ retail footprint, which includes the expected opening of up to 10 new stores by year end; second, the optimization and expansion of our grower-processor assets in Pennsylvania and Virginia, which we expect will position the Company to scale up its operations in anticipation of future market demand; and third, the continued pursuit of M&A opportunities that we believe will allow us to add attractive assets to our portfolio in both new and existing markets.”
Financial Results for the First Quarter Ended March 31, 2021
Revenue in the first quarter of 2021 (“Q1 2021”) increased 29.0% to $41.7 million, compared to $32.3 million in Q4 2020. The 29.0% increase in revenue was driven primarily by solid revenue growth at the Company’s BEYOND/HELLOTM stores in Pennsylvania and Illinois, early revenue contributions from its Virginia retail operations and increased operating activity at its PAMS and Nevada facilities.
Gross profit in Q1 2021 was $20.1 million, or 48.2% of revenue, compared to $17.6 million, or 54.5% of revenue in Q4 2020. The increase in gross profit was primarily driven by strong revenue growth at the Company’s BEYOND/HELLOTM stores in Pennsylvania and Illinois, early revenue contributions from its Virginia retail operations and increased operating activity at its PAMS and Nevada facilities.
Q1 2021 net loss was $26.1 million, or $0.17 per diluted share. The improvement in net loss in the first quarter was driven by fluctuations in the fair value of the Company’s derivative liabilities, primarily due to the changes in the fair value of the Company’s Subordinate Voting Shares and the number of warrants associated with the derivatives warrants liability.
Adjusted EBITDA1 in Q1 2021 was $3.0 million, compared to Adjusted EBITDA $2.0 million in Q4 2020. The increase in Adjusted EBITDA on a sequential quarterly basis was driven by higher revenues and gross profit, partially offset by an increase in staffing related expenses in advance of the following: new store openings; the commencement of operations of the Ohio facility; and the expansion of the Pennsylvania and Virginia grower-processor assets.
Balance Sheet and Liquidity
As of March 31, 2021, the Company had $167.9 million of cash and short-term investments. Total current assets of $197.0 million and current liabilities of $48.6 million as of March 31, 2021. Net working capital at the end of March 31, 2021 was $148.3 million. The Company incurred approximately $10 million in capital expenditures during the first quarter of 2021. As of March 31, 2021, the Company had $82.4 million principal amount of total debt, excluding leases and property, plant and equipment financing obligations.
