Image Source: Pexels

Jushi Holdings Inc.(CSE: JUSH) (OTCQX: JUSHF), a vertically integrated, multi-state cannabis operator, and constituent in the munKNEE  Pure-play MSO Pot Stock Index, announce its amended* Q2 financial results for the period ended June 30, 2022. All financial information is provided in U.S. dollars unless otherwise indicated and compared to the previous quarter.

*(In connection with the preparation of the Company’s unaudited condensed consolidated financial statements for the three and six months ended June 30, 2022, the Company's management stated in their Q2 amended (corrected) financial report that management had:

• "identified errors in its previously issued unaudited condensed balance sheet as of March 31, 2022, resulting in the understatement of certain non-current assets and associated accruals and had
• identified errors in the unaudited condensed consolidated statement of cash flows for three months ended March 31, 2022. Such errors resulted in the understatement of net cash flows used in operating activities, the overstatement of net cash flows used in investing activities, and the understatement of net cash flows provided by financing activities during the three months ended March 31, 2022. The Company believes such errors did not impact the cash balance as of March 31, 2022, and further believes there is no net change in cash flows during the three months then ended."

Q2 Financial Highlights

• Total Revenue: increased 17.6% to $72.8M
• Adj. Gross Profit: increased 12.3% to $27.8M
  • as a % of revenue: decreased to 38.3% from 40.0%
• Net Income (Loss): increased to $12.1M from $(19.8)M
• Adj. EBITDA*: increased to $0.5M from $(0.9)M
  • *Earnings Before Interest Taxes Depreciation and Amortization
• Cash on Hand: declined 43.3% to 43,2M

Q2 Operational Highlights

• Expanded the Company’s vertically integrated footprint in Nevada with the completion of the NuLeaf, Inc. acquisition, adding a 27,000 sq. ft. cultivation facility, a 13,000 sq. ft. processing facility, and three adult-use and medical retail dispensaries in the state
• Opened the 32^nd and 33^rd retail locations nationwide, marking the Company’s third Beyond Hello™ location in California and fourth dispensary in Nevada
• Awarded a provisional medical marijuana dispensary license in the Cincinnati Tri-State Area of Ohio, establishing the Company’s fifth vertically integrated state-level operation
• Debuted two new product lines in Pennsylvania under the Company’s brand The Lab™, including a line of solventless live rosin extracts and a line of hydrocarbon extracts, comprised of high-quality vapes and concentrates

Management Commentary

Jim Cacioppo, Chief Executive Officer, Chairman, and Founder,  said:

• “We are pleased to report solid second quarter top-line growth and improved sequential profitability, a strong indication that our strategy, capital investments and cost savings initiatives are building a strong foundation on which we can continue to execute, despite the challenging macroeconomic environment,
• The development of our footprint in Nevada, including the addition of NuLeaf’s high-quality assets, were meaningful contributors to our retail performance in the second quarter.
• We completed the first phase of construction of the cultivation portion of our grower-processor facilities in Pennsylvania and Virginia.  
• We are also focused on diversifying our product portfolio, including the introduction of many new strains, along with hydro-carbon products and Live Rosin vapes and concentrates that will allow us to differentiate our product offering while continuing to meet consumer demand.
• We are excited about what lies ahead for Jushi and believe we are well-positioned to capitalize on the industry opportunity and drive long-term value for our shareholders.
• I am confident that our strong foundation and cost discipline will ensure we maintain our momentum into the second half of the year."

Outlook

Mr. Cacioppo commented:

• “...We are revising our...2022 annualized revenue projection [from our previously stated $320M to $350M] to between $340M and $380M, with a low double-digit Adjusted EBITDA margin [having stated in Q1 that it would be between $60M and $80M for all of 2022].
• ...We expect to open three additional Beyond Hello™ stores in the next four months, including two locations in Virginia and one in Ohio.
• ...We continue work on adding additional operational grow rooms and expanding production at our grower-processor facilities as we look to increase the sell-through rate of our own branded products through our network of retail stores, along with pursuing wholesale opportunities.
• ...We expect to operate 37 retail locations and approximately 330,000 sq. ft. of cultivation and processing capabilities, including 100,000 sq. ft. of canopy by the end of 2022...” [having stated in Q1 that the Company was targeting 50 retail licenses across seven markets, including 36 operating retail locations].

Stock Performance

The stock price is relatively unchanged today but is DOWN 5% from last Friday, DOWN 30% so far in September, DOWN  62% YTD, and DOWN 85% from its peak in February 2021.

(As an aside, please note that according to James V. Baker (see here), "The five MSOs which seem to be at the greatest risk of default during the next 30 months are Ayr Wellness, 4Front, Jushi, TerrAscend, and Verano. All five have huge debts coming due, negative free cash flows, and insufficient cash...).

More By This Author:

These Cryptocurrency ETFs Continue To Dramatically Outperform Bitcoin & Ethereum
The 5 Cannabis Categories Fell Even Further Last Week
Psychedelic Stocks Continue To Plummet: -16% This Week; -33% MTD; Now -57% YTD