Jushi Holdings Raises $27.46 Million via 10% Debt with Warrants

Jushi Holdings Inc. Announces US$27.460 Million Debt Financing Led by Insiders and Founders

• Insiders and founders have committed US$18.5 million
• Financing will provide additional working capital to accelerate the investment in growth within each key market and seek to deliver value to shareholders

BOCA RATON, Fla., Dec. 23, 2019 /CNW/ — Jushi Holdings Inc. (“Jushi” or the “Company”) (CSE: JUSH) (OTCQX: JUSHF), a globally-focused, multi-state cannabis and hemp operator, today announced the receipt of binding subscriptions totaling US$27.460 million for 10% senior secured notes (“Notes”) and 5-year common stock warrants (the “Warrants” and collectively, the “Offering”).

This financing demonstrates our continued commitment to the vision and long-term investment opportunity for Jushi as an emerging multi-state cannabis and hemp operating leader.

Jim Cacioppo, Chairman and CEO of Jushi Holdings Inc

The additional working capital will support the organic build out of operations in our key existing markets including Pennsylvania, Nevada, Ohio, Illinois, California and Virginia, with additional growth opportunities through our application pipeline, well into 2021.

The Company expects all funds to be received by early January. All notes will mature on January 15, 2023 and will bear interest from their date of issue at 10.0% per annum payable in cash quarterly. Jushi’s obligations under the Notes are secured by the assets of Jushi and certain of its Subsidiaries (subject to certain exclusions) and are guaranteed by certain Subsidiaries. The purchasers of the Notes will also receive Warrants to acquire Class B subordinate voting shares of the Company at 75% coverage with an expiry date of December 23, 2024, at an exercise price equal to US$1.58 (~CAD$2.08 as of 12/23/19), which is equal to a 25% premium to the volume weighted average price (vwap) for the prior 20 trading days ending December 20, 2019. An additional 25% warrant coverage may be issued under certain circumstances.

Pro forma for the financing, Jushi will have approximately US$65 million in cash and marketable securities on its balance sheet, and the Company is funded for all planned acquisitions and capital expenditures announced to date. Assuming no unforeseen delays, based on our current and planned asset base, the Company expects its projected run-rate revenue on a pro forma consolidated basis in Q4 2020 to be approximately US$150 – 180 million and announces 2021 calendar year revenue projections of US$200 – 250 million. This does not include revenue from incremental cannabis application victories.

Jushi Chairman & CEO Jim Cacioppo, and entities he controls including One East Partners, L.P., led the subscription with US$10 million with other insiders subscribing for an additional US$8.5 million. The participation of the insiders of the Company in the Offering constitutes a related party transaction for purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions of the Canadian Securities Administrators (“61-101”). As the fair market value of the Notes and Warrants received by the insiders of the Company under the Offering are valued at less than 25% of the market capitalization of the Company, the Company is relying on exemptions in 61-101 from the formal valuation and minority approval requirements contained therein. The Company formed a special committee of independent directors of the board of directors of the Company (the “Special Committee”), comprised of Erich Mauff, Stephen Monroe and Benjamin Cross to set, review, negotiate and approve of the terms of the Offering. The Special Committee engaged AltaCorp Capital Inc. to provide its opinion that the terms of the Offering were fair, from a financial perspective, to the Company.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Jushi Holdings Inc.

We are a globally focused cannabis and hemp company led by an industry leading management team. In the United States Jushi is focused on building a multi-state portfolio of branded cannabis and hemp-derived 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 and hemp ecosystem. For more information please visit www.jushico.com or our social media channels, Instagram, Facebook, Twitter and LinkedIn.

Original press release

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