Jushi Holdings EVP of Investor Relations on what to expect with Friday’s MORE Act cannabis vote – Trade To Black 29
Jushi Holdings JUSHF Executive Vice President of Investor Relations Michael Perlman is optimistic. In a quarter that has been undeniably weak for U.S. cannabis operators, Michael believes there are many strategic opportunities to grow the business as M&A activity heats up in the industry. With approximately $108.6 million of cash and cash equivalents on the balance sheet, the company is well positioned to recover certain accretive assets once the opportunity arises.
Jushi Holdings is a national, multi-state cannabis company that develops and operates premium retail outlets, premium brands, and modern cultivation, processing, and manufacturing facilities. The company operates 27 dispensaries in 5 states, with a particularly strong presence in early-stage markets such as Pennsylvania, Illinois and Virginia. Its platform has a strong focus on branding, led by former Grammy Award winner and chief creative director, Andreas Neumann.
Jushi recently released Financial results for the fourth quarter of 2021 in line with expectations, even if they reaffirmed that an industry-wide slowdown had taken place. The company did, however, hit 4 analysts’ estimate of $65.9 million, Tag titles has been reduced its revenue and EBITDA expectations for 2022 in the process. Along with management’s reduced guidance, Beacon analyst Russell Stanley lowered its 2022 revenue forecast from $409 million to $319 million, while gross margin was revised down at 48% compared to the initial estimate of 56%.
Nevertheless, the 104% increase in revenue from the $32.3 million generated in the fourth quarter of 2020 was nothing to complain about. The 22% sequential revenue growth was still among the highest in the industry among Tier 1 MSOs, leaving the company on a solid footing. Growth was mainly driven by the acquisition of nature’s remedy in Massachusetts, strong revenue growth at the Company’s BEYOND/HELLO stores in Virginia and Illinois, and increased wholesale activity in Pennsylvania and Virginia.
And if strong M&A activity persists in US cannabis, Jushi Holdings could find new opportunities for expansion at a fair price. According to Michael Perlman, state limits on MSO dispensary limits, or “caps,” could require acquiring operators to give up their licenses to go below the cap in some states. This is a situation that could very well come into play:
We have tremendous M&A opportunities in many of the markets in which we operate, as licensing markets are limited and some of the larger players have already maxed out. So this represents a fantastic opportunity, an organic growth opportunity for us.
While the first quarter of 2022 could be just as difficult in the face of still high consumer inflation and fall in consumer purchasing powerthe resumption of Jushi’s wholesale business could provide a boost by adding an additional revenue stream that was limited in 2021.
This article was originally published on The Dales Report and appears here with permission.