Jushi Closes Massachusetts Acquisition At Reduced Cost of $91 Million

Jushi Holdings Inc. Completes Nature’s Remedy Acquisition and Officially Enters Massachusetts Market

Jushi Holdings Inc. Completes Acquisition of Massachusetts-Based Nature’s Remedy

• Negotiates Revised Transaction Terms Resulting in 4.3 million Fewer Shares Issued
• Adds Vertically Integrated Operator with Two Retail Dispensaries and a Cultivation and Manufacturing Facility
• Officially Enters Its Seventh State and Expands Retail Footprint to 24 Dispensaries Nationwide

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BOCA RATON, Fla., Sept. 13, 2021 (GLOBE NEWSWIRE) — Jushi Holdings Inc. (“Jushi” or the “Company”) (CSE: JUSH) (OTCQX: JUSHF), a vertically integrated, multi-state cannabis operator announced it has closed its previously announced acquisition of Nature’s Remedy of Massachusetts, Inc. and certain of its affiliates (collectively, “Nature’s Remedy”), a vertically integrated, single-state operator in Massachusetts, for total upfront consideration of US$91.2 million (the “Acquisition”). Nature’s Remedy currently operates two retail dispensaries, in Millbury, MA and Tyngsborough, MA, (collectively, the “Retail Dispensaries”) and a 50,000 sq. ft. cultivation and production facility in Lakeville, MA, with approximately 22,000 sq. ft. of high-quality indoor flower canopy and state-of-the-art extraction and manufacturing capabilities (the “Lakeville Facility”). The Company expects to execute on the significant opportunity to expand Nature’s Remedy’s wholesale revenue in the fourth quarter, driven by additional cultivation capacity as well as the planned resale of excess inventory at the Lakeville Facility. By way of the net working capital adjustment contained in the Merger and Membership Interest Purchase Agreement, the Company paid an additional US$2.9 million in cash to acquire excess inventory worth US$17.5 to US$22.5 million at prevailing wholesale prices.

We are excited to officially enter the Massachusetts market, adding Nature’s Remedy, a vertically integrated business operating high-quality, well-managed assets.

Jim Cacioppo, Chief Executive Officer, Chairman and Founder of Jushi

With its strong, defensible retail position and a scalable cultivation footprint, Nature’s Remedy offers significant opportunities for us to expand and grow our presence in this rapidly maturing adult-use market. I look forward to working with our new colleagues to introduce our complete line of industry-leading brands and products into the wholesale market and at Nature’s Remedy’s retail stores.

Cultivation and Product Manufacturing Facility of Nature’s Remedy

The 50,000 sq. ft. Lakeville Facility is located within a 185,000 sq. ft. industrial complex. Currently, the Lakeville Facility’s flower canopy encompasses approximately 22,000 sq. ft., which Nature’s Remedy expects to expand to approximately 32,500 sq. ft. by the end of the year. The Lakeville Facility utilizes CO2 extraction and has a full kitchen for edible production. Current biomass production at the Lakeville Facility is approximately 16,000 lbs/year, including approximately 9,000 lbs/year of high-quality A bud flower. As part of the ongoing expansion of the facility, Nature’s Remedy plans to increase biomass production to approximately 26,000 lbs/year, including approximately 13,000 lbs/year of A bud flower based on 32,500 sq. ft. of canopy. In addition to the above-mentioned expansion, Nature’s Remedy is evaluating further expansion opportunities in the existing Lakeville industrial complex and/or on ten acres of land owned by Nature’s Remedy in Grafton, MA. The Lakeville Facility could potentially accommodate an additional 18,000 to 20,000 sq. ft. of canopy through the expansion into approximately 26,000 sq. ft. of adjacent space in the existing building. In Grafton, MA, Nature’s Remedy has a Host Community Agreement in place with the town and recently received a provisional cultivation license from the Commonwealth. The ten acres of land in Grafton, MA, could potentially accommodate a new 35,000 to 40,000 sq. ft. facility with approximately 18,000 sq. ft. of canopy. These expansions are subject to business evaluations and needs, as well as receipt of applicable regulatory approvals.

Millbury Dispensary

The Millbury dispensary is located in the town of Millbury, MA, just south of Worcester, MA. The Millbury dispensary caters primarily to the local population and surrounding underserved areas and serves both adult-use and medical customers. The Millbury dispensary provides ample parking for its patrons and is strategically situated along the Worcester-Providence Turnpike, which sees approximately 10,600 cars per day. The Millbury dispensary is located in close proximity to the Shoppes at Blackstone Valley, the largest open-air shopping center in Central Massachusetts, and the Mass Turnpike.

Tyngsborough Dispensary

Tyngsborough is located in northern Middlesex County just south of Nashua, NH, and serves adult-use customers. The Tyngsborough dispensary is strategically located in close proximity to the Pheasant Lane Mall, one of the largest malls in New Hampshire, and in close proximity to an exit on Route 3/Northwest Expressway, which sees 60,000 to 80,000 cars per day. There is ample customer parking with potential for expansion.

Revised Agreement Terms

Jushi acquired Nature’s Remedy for an upfront payment of US$91.2 million, comprised of US$40.0 million in cash, approximately US$34.7 million in stock², a US$11.5 million unsecured three-year note⁵ (the “3-Year Note”) and a US$5.0 million unsecured five-year note⁶. Under the agreement, the Company has also agreed to issue up to an additional US$5.0 million in Company Shares and a US$5 million increase to the principal balance of the 3-Year Note upon the occurrence or non-occurrence of certain conditions after the closing date (the “Additional Consideration”), bringing the total potential consideration for the acquisition paid by the Company to US$101.2 million. Assuming all conditions are met, the Company expects to issue up to 4.3 million fewer Company Shares, assuming an average daily volume weighted price of US$4.61, as a result of the revised agreement. The revised purchase price (inclusive of the full US$10 million of Additional Consideration, but excluding any benefit from the acquired excess inventory) represents a multiple of 2.7 to 3.0x Nature’s Remedy’s expected full year 2022 EBITDA of US$34 to US$38 million.⁷

_{¹ $55 million divided by a VWAP of US$4.61 is equal to 11.9 million shares
² 8.7 million shares (fixed share count based on revised agreement) multiplied by US$3.99 (Jushi close price on 9/10/21) is equal to US$34.71 million
³ US$10 million divided by a VWAP of US$4.61 is equal to US$2.2 million
⁴ US$5 million divided by a VWAP of US$4.61 is equal to US$1.1 million
⁵ The promissory note provides for cash interest payments to be made quarterly, a three-year maturity and all principal and accrued and unpaid interest due at maturity
⁶ The promissory note provides for cash interest payments to be made quarterly, a five-year maturity and all principal and accrued and unpaid interest due at maturity
⁷ See “Reconciliation of Non-IFRS Financial Measures” at the end of this press release for more information regarding the Company’s use of non-IFRS financial measures}

About Jushi Holdings Inc.

We are a vertically integrated cannabis company led by an industry-leading management team. In the United States, Jushi is focused on building a multi-state portfolio of branded cannabis assets through opportunistic acquisitions, distressed workouts, and competitive applications. Jushi strives to maximize shareholder value while delivering high-quality products across all levels of the cannabis ecosystem. For more information, please visit jushico.com or our social media channels, Instagram, Facebook, Twitter and LinkedIn.

JUSHI HOLDINGS INC.
RECONCILIATION OF NON-IFRS FINANCIAL MEASURES

EBITDA is a financial measure that is not defined under IFRS, does not have a standardized meaning and therefore may not be comparable to similar measures presented by other issuers. We define EBITDA as net income (loss), or “earnings”, before interest, income taxes, depreciation, and amortization.

EBITDA is included as a supplemental disclosure because we believe that such measurement provides a better assessment of Nature’s Remedy’s operations on a continuing basis by eliminating certain material non-cash items and certain other adjustments we believe are not reflective of Nature’s Remedy’s ongoing operations and performance. EBITDA has limitations as an analytical tool as it excludes from net income as reported interest, tax, depreciation and amortization. Because of these limitations, EBITDA should not be considered as the sole measure of Nature’s Remedy’s performance or value. The most directly comparable measure to EBITDA calculated in accordance with IFRS is operating income (loss).

Original Press Release

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