Jushi Holdings JUSHF Executive Vice President Michael Perlman of Investor Relations is optimistic. In a quarter that was undeniably weak for US cannabis operators, Michael believes there are plenty of strategic opportunities to grow the business as mergers and acquisitions ramp up in the industry. With approximately $108.6 million in cash and cash equivalents on its balance sheet, the company is well positioned to raise select accretive assets as the opportunity presents itself.
Jushi Holdings is a national, multi-state cannabis company that develops and operates high-end retail locations, premium brands, and modern growing, processing and manufacturing facilities. The company operates 27 pharmacies in 5 states, with a particularly strong presence in entry-level markets such as Pennsylvania, Illinois and Virginia. The platform places a strong emphasis on branding, spearheaded by former Grammy Award winner and Chief Creative Director, Andreas Neumann.
Jushi recently released its fourth quarter 2021 financial results that met expectations, although they reaffirmed that there had been a slowdown across the industry. The company met four analysts’ estimate of $65.9 million, but Beacon Securities lowered its 2022 revenue and EBITDA expectations. In line with management’s lowered guidance, Beacon analyst Russell Stanley lowered its revenue forecast for 2022. from $409 million to $319 million, while the gross margin was revised to 48% from the original 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. Consecutive revenue growth of 22% was still one of the highest in the industry among Tier-1 MSOs, putting the company on a strong foundation. Growth was primarily due to the Massachusetts acquisition of Nature’s Remedy, strong sales growth at the company’s BEYOND/HELLO stores in Virginia and Illinois, and increased wholesale operations in Pennsylvania and Virginia.
And if strong mergers and acquisitions continue in cannabis in the US, Jushi Holdings could find additional opportunities to expand at a reasonable cost. According to Michael Perlman, state caps on MSO pharmacy limits, or “caps,” could force acquiring operators to issue licenses to fall below the limit in some states. It’s a situation that can come into play very realistically:
We have massive amounts of M&A opportunities in many of the markets we are in because there are limited licensing markets and some of the bigger guys are already at their peak. So that presents a fantastic opportunity – an organic opportunity for us to grow.
While Q1 2022 could be equally challenging in light of continued high consumer inflation and declining consumer purchasing power, the rebound in Jushi’s wholesale could 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.
This post Jushi Holdings EVP of Investor Relations on What to Expect with Friday’s MORE Act Cannabis Vote – Trade to Black 29 was original published at “https://www.benzinga.com/markets/cannabis/22/03/26412725/jushi-holdings-evp-of-investor-relations-on-what-to-expect-with-fridays-more-act-cannabis-vote-t”