Jushi Holdings Inc. (CSE:JUSH, OTCQX:JUSHF) said it is confident of achieving “accelerated growth and profitability” in the remainder of 2022 after an expansion in its retail presence drove a 48.5% year-on-year increase in revenue in the first quarter.
A challenging operating environment led to a quarter-on-quarter fall in revenue in the first three months of 2022, and the cannabis company announced a “modest” downwards revision of its full-year guidance.
"Despite the seasonal weakness in the first quarter and a series of challenges including the loss of store hours due to Omicron, snowstorms, and the Pennsylvania distillate cartridges recall, I am pleased with our first quarter performance and the progress we have made in positioning our business for the long term," Jim Cacioppo, CEO, chairman, and founder of Jushi said in a statement.
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First-quarter revenue amounted to $61.9 million compared to $41.7 million in the first quarter of 2021, boosted by the expansion of Jushi’s retail footprint from 17 to 29 stores as well as the acquisition of Nature's Remedy of Massachusetts and increased wholesale sales at its Pennsylvania and Virginia grower-processor facilities.
On a sequential quarterly basis, revenue fell 6.1%, impacted by a seasonal slowdown in activity, inflationary pressures on consumer spending, regulatory delays that affected the expansion and sale of product offerings in select states, and temporary store closures related to the COVID-19 (coronavirus) pandemic and snowstorms.
First-quarter adjusted earnings before interest, tax, depreciation and amortization (EBITDA) came in at $1.1 million, compared with $4 million in Q1 and $1.5 million in Q4 last year.
Cacioppo said the company is “modestly revising” its fourth-quarter 2022 annualized revenue to be between $340 million to $380 million, with annualized adjusted EBITDA between $60 million to $80 million.
He attributed the slight reduction in guidance to the weakening macro environment, ongoing regulatory delays, and supply chain disruption.
“We want to be conservative in regard to our projected revenue ramp through the remainder of the year,” he noted.
The CEO said the company has taken “decisive steps” to manage costs with encouraging results. “I am confident that our investments into the business and the cost savings measures we have recently implemented position us to achieve accelerated growth and profitability through the balance of the year," he added.
In the remainder of the year, Jushi plans to open an additional four dispensaries and continue to build-out the grow rooms in its Pennsylvania and Virginia grower-processor facilities, “which will increase our margins and substantially grow our wholesale sales in 2022 and beyond", Cacioppo added.
“By the end of 2022, we are targeting 50 retail licenses across seven markets, including 36 operating retail locations and approximately 330,000 square feet of cultivation and processing capacity," he concluded.
As of March 31, 2022, the company had $76.2 million of cash and cash equivalents; its debt stood at $147 million.
Jushi is hosting a conference call to discuss its financial results for the first quarter 2022 at 9.00 am ET today, Wednesday, May 25, 2022. Live Call details: +1-833-646-0490 (US Toll-Free) or +1-918-922-6617 (International); Conference ID:6827238; webcast registration via https://edge.media-server.com/mmc/p/v9t3kq76
For interested individuals unable to join the conference call, a dial-in replay of the call will be available until June 24, 2022, and can be accessed by dialing +1-855-859-2056 (US Toll-Free) or +1-404-537-3406 (International) and entering replay pin number: 6827238.
Jushi is a vertically integrated cannabis company focused on building a multi-state portfolio of branded cannabis assets through opportunistic acquisitions, distressed workouts, and competitive applications.
Contact the author at jon.hopkins@proactiveinvestors.com