Jushi Holdings Inc: Overlooked U.S. Pot Stock Already Up 27% in 2021

Jushi Holdings Inc Reports Strong Financials & Raft of Acquisitions

Jushi Holdings Inc (CNSX:JUSH, OTCMKTS:JUSHF) is an excellent cannabis operator that hasn’t garnered the same kind of attention that its peers have. But that will likely change over the coming quarters.

The company continues to report strong financial results, open new dispensaries, expand its footprint, and increase its growing facilities. You can’t ask for much more than that.

This, along with growing optimism about federal U.S. marijuana legalization, has helped juice JUSHF stock over the last year. Jushi stock is up 613% year-over-year and it has already advanced 27% in 2021.

Like the broader stock market, JUSHF stock took a breather in February and March, but it has been bouncing back. It still needs to climb an additional 23% to get back to its all-time high of $9.06 per share in February.

Wall Street seems pretty optimistic that will happen. Of the analysts offering a 12-month share-price forecast for Jushi Holdings Inc, their median estimate is $10.00, which represents a 36% gain from the current level. Their 12-month high estimate for Jushi stock is $11.28, which suggests an additional 53% upside.

Keep in mind, Wall Street analysts are notoriously conservative in their forecasts. If history is any indicator, it certainly wouldn’t be a surprise to see the price of JUSHF stock double over the coming quarters.

Chart courtesy of StockCharts.com

JUSHF Stock Overview

Jushi Holdings is a multistate owner and operator of cannabis cultivation, processing, and retail licenses. Its targeted footprint includes California, Nevada, Illinois, Ohio, Pennsylvania, Massachusetts, and Virginia. (Source: “Investor Presentation,” Jushi Holdings Inc, last accessed May 4, 2021.)

Its core markets are Virginia, Pennsylvania, Illinois, and Massachusetts. Its developing markets are Ohio, Nevada, and California.

As of this writing, Jushi runs 17 retail locations under the “BEYOND / HELLO” brand. That number is expected to climb significantly over the coming quarters. In 2021, the company is opening a total of seven dispensaries in Pennsylvania. Between now and the end of 2022, it plans to open five dispensaries in Virginia and two in California.

Jushi Holdings Inc also operates five cultivation facilities, as well as five extraction and processing plants.

The company’s brand portfolio includes “The Bank,” “Tasteology,” “Nira Medicinals,” “The Lab,” “Seche,” and “Nira.”

New Acquisitions

Since the start of April, Jushi has announced a raft of new acquisitions.

On April 5, the company announced that its subsidiary, Production Excellence, LLC, had completed the previously announced acquisition of Franklin Bioscience NV, LLC, an established Nevada marijuana operator. (Source: “Jushi Holdings Inc. Completes Previously Announced Acquisition of Established Nevada Operator,” Jushi Holdings Inc, April 5, 2021.)

Franklin Bioscience holds medical and recreational cannabis cultivation, processing, and distribution licenses issued by the Nevada Cannabis Control Board. It currently operates cultivation, production, and distribution facilities in North Las Vegas, NV.

On April 19, Jushi announced plans to expand its footprint through the acquisition of Nature’s Remedy of Massachusetts, Inc., a vertically integrated single-state cannabis operator, for total consideration of up to $110.0 million. (Source: “Jushi Holdings Inc. to Expand Footprint Through Acquisition of Vertically Integrated Massachusetts Operator,” Jushi Holdings Inc, April 19, 2021.)

Nature’s Remedy currently operates two retail dispensaries—in Millbury, MA and Tyngsborough, MA—and a 50,000-square-foot cultivation and production facility in Lakeville, MA, with approximately 19,500 square feet of indoor flower canopy and state-of-the-art extraction and manufacturing capabilities.

On April 20, Jushi announced that it’s set to acquire OhiGrow, LLC (one of 34 licensed cultivators in Ohio) and Ohio Green Grow LLC for $5.0 million. (Source: “Jushi Holdings Inc. to Acquire Licensed Cultivator in Ohio,” Jushi Holdings Inc, April 20, 2021.)

The acquisition includes a 10,000-square-foot facility and 1.4 acres of land. OhiGrow will complement Jushi’s soon-to-be-operational, 8,000-square-foot, state-of-the-art Ohio medical cannabis processing facility. This acquisition is expected to close in the third quarter of 2021.

Strong Q4 and Full-Year Results

On April 21, Jushi announced certain unaudited results for its fourth quarter and fiscal 2020. (Source: “Jushi Holdings Inc. Announces Certain Unaudited 2020 Fourth Quarter and Full Year 2020 Financial Results,” Jushi Holdings Inc, April 21, 2021.)

The company previously announced that its auditor wasn’t able to complete its audit procedures in advance of the April 30 deadline. The company anticipates that it will file its 2020 audited financial statements on or before May 24.

Jushi’s fourth-quarter revenue increased 30% sequentially to $32.3 million. Its gross profit was up 44% sequentially, at $17.6 million. The company’s income from operations was $400,000, a $9.6-million improvement from the fourth quarter of 2019.

Jushi Holdings Inc ended the fourth quarter with $93.8 million in cash, cash equivalents, and investments.

The unaudited full-year results include total year-over-year revenue growth of 690% to $80.8 million. The company’s full-year gross profit increased by 760% year-over-year to $41.5 million. The results also included a 2020 loss from operations of $10.5 million, versus a 2019 loss from operations of $34.2 million.

For the first quarter ended March 31, 2021, Jushi Holdings Inc announced certain unaudited highlights, including total revenue of $41.6 million, representing a sequential increase of 29%.

At the end of the first quarter, Jushi had cash, cash equivalents, and short-term investments of $168.0 million.

“While we’re disappointed by the unexpected delay that our auditors have experienced in finalizing their work, we’re thrilled with the underlying strength of our business, the robust growth we have achieved in 2020, and the continued momentum we have seen into 2021,” said Jim Cacioppo, CEO. (Source: Ibid.)

Analyst Take

2020 was a defining year for Jushi Holdings Inc, with the company expanding its presence on both the East and West Coasts. That fueled strong financial results on both a sequential and year-over-year basis.

Thanks to its acquisitions in Massachusetts and Ohio; expansion and build-out of its facilities in Pennsylvania and Virginia; and build-out of its retail footprint across California, Pennsylvania, and Virginia, management is confident that the company will see strong growth in 2021 and beyond.

That bodes well for Jushi stock investors.