Jushi Holdings Inc (CSE:JUSH, OTCQX:JUSHF) has reported strong growth in fourth-quarter and full-year 2022 revenue despite what it described as a challenging backdrop for the industry.
The vertically integrated, multi-state cannabis operator said revenue increased by 17% to $76.8 million in the three months to December 31, 2022, taking full-year revenue 36% higher to $284.3 million.
“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,” Jushi CEO, chairman and founder Jim Cacioppo said in a statement. “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.
“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,” Cacioppo added.
Gross profit for 4Q amounted to $22 million, an increase of 11.4% year-over-year, with FY22 gross profit increasing by 14.5% to $95.5 million. Its net loss was $140 million and $202 million respectively for 4Q and FY22. The company ended December with cash, cash equivalents and restricted cash of $27.1 million.
Fourth-quarter operational highlights
- Made significant progress on expansion projects in Virginia and Pennsylvania, expanding total overall canopy to 69,310 square feet (sq. ft.) and increased total annual biomass capacity to 49,121 pounds as of year-end;
- Grew Virginia patient base by approximately 188% year-over-year, ending 2022 with over 12,000 Jushi active patients and the total number of certified patients in its footprint to date in Virginia is approximately 22,620;
- Closed US$73.1 million debt financing used to redeem outstanding existing senior secured notes and extend its senior debt maturity to December 2026;
- Relocated the Beyond Hello Westside dispensary in Pennsylvania to Dickson City in the Greater Scranton Area;
- Launched a suite of products in California exclusively at Beyond Hello retail locations, including Sèchè pre-roll singles, Tasteology fruit chews, and The Lab vapes; and
- Strengthened board of directors and senior leadership with appointments of Bill Wafford as an independent director and chair of the audit committee, and Tobi Lebowitz to chief legal officer and corporate secretary.
“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. That being said, we are very aware of the challenging capital market environment facing us and the broader cannabis industry,” Cacioppo continued. “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.”
Recent developments
- Opened the 36th and 37th retail locations nationwide, establishing a fifth vertically integrated state-level operation with the first Beyond Hello medical dispensary in Ohio, and adding a fifth medical cannabis dispensary in Arlington, Virginia;
- Continued focus on cost-savings and efficiency optimization plan, reducing employee headcount from approximately 1,570 total employees at peak in 2022 to approximately 1,310 total employees today. The company said it expects to move to a new labor model resulting in a total estimated 50% labor hour savings since April of 2022;
- Made a series of leadership appointments, including hiring Michelle Mosier as chief financial officer, appointing Nichole Upshaw to chief people officer, and management changes of Shaunna Patrick to chief commercial director, and Trent Woloveck to chief strategy director;
- Secured up to US$10 million equipment lease financing facility and funding commitment from XS Financial, and drew down an additional US$1.9 million on an Arlington, Virginia real estate mortgage facility in the first quarter of 2023;
- Expanded 93,000 sq. ft. Virginia facility and its canopy to approximately 15,700 sq. ft. In 4Q 2022, Jushi scaled operations to become EBITDA (underlying earnings) positive in Virginia; and
- In Virginia, in the design phase of a second connected building that can increase the company’s grower-processor facility's total square footage up to approximately 263,000 sq. ft. By splitting up the next development phase into two pieces, it said costs should be reduced to approximately $35 million.
“Looking ahead, we have shifted our attention from rapidly expanding our operations to focusing our efforts on efficiency optimization and cost-saving initiatives across all facets of our business,” Cacioppo concluded.
“We have built an incredibly strong and agile platform of high-quality assets distributed across an attractive state footprint and I am confident that this solid foundation along with our strong financial and operational discipline will enable us to accelerate our pathway to profitability as we continue to work towards being free cash flow positive, as soon as practical.”
Jushi Holdings is a vertically-integrated cannabis company led by an industry-leading management team. In the US, the company is focused on building a multi-state portfolio of branded cannabis assets through opportunistic acquisitions, distressed workouts, and competitive applications.
Contact the author at stephen.gunnion@proactiveinvestors.com