Jushi Holdings Inc: Beaten-Down Pot Stock Reports Another Strong Quarter

Jushi Stock Has 380%+ Upside

With the state of the economy and the ongoing apathy in Washington, D.C. regarding federal legalization of marijuana, it’s tough these days to find a pot stock that isn’t beaten up. Whether a specific pot stock is undervalued is another story.

Far too many cannabis stocks unjustifiably rode the optimism of the green wave, and they deserved the subsequent drubbing. One marijuana company that has been doing everything right, though—and is poised for massive growth once things turn around—is Jushi Holdings Inc (CNSX:JUSH, OTCMKTS:JUSHF).

Jushi Holdings continues to report excellent financial results, including positive adjusted earnings, double-digit revenue growth, and adjusted gross profit growth.

The company’s robust results come on the heels of several events that have set JUSHF stock up for sustained long-term growth.

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In the first quarter of 2022, Jushi Holdings Inc completed its acquisition of The Apothecarium in Las Vegas, debuted a number of cannabis brands and launched products in Massachusetts, and closed a non-brokered placement for total proceeds of $13.7 million.

Subsequent to the end of the first quarter, Jushi Holdings Inc:

  • Was awarded a provisional medical marijuana dispensary license in Ohio, establishing its fifth vertically integrated state-level operation
  • Expanded its footprint in Nevada with the completion of its acquisition of NuLeaf, Inc., which added a 27,000-square-foot cultivation facility, a 13,000-square-foot processing facility, and three dispensaries to its portfolio
  • Launched its first line of solventless cannabis extracts in the Pennsylvania market
  • Opened its 33rd retail location nationwide, its fourth dispensary in Nevada, and its third “BEYOND / HELLO” dispensary in California
  • Closed on its purchase of land adjacent to its Toledo, OH grow facility, which will allow it to significantly expand its cultivation footprint

Again, Jushi Holdings Inc has been basically doing everything it can to set itself up for success. And if its financial reports are any indicator, the company is already successful.

Unfortunately, investors aren’t having any of it. The soaring inflation, rising interest rates, looming recession, and inactivity in terms of U.S. marijuana legalization have been weighing down the entire cannabis stock market, not just shares of Jushi Holdings Inc.

As of this writing, Jushi stock is down by:

  • 25% over the last month
  • 49% over the last three months
  • 54% over the last six months
  • 50% year-to-date
  • 71% year-over-year

Grim, but not out of the ordinary. What is out of the ordinary, though, is the bullish take that Wall Street analysts have on JUSHF stock. Their average 12-month share-price target for Jushi stock is $5.13, and their high target is $7.94, which points to potential gains in the range of 212% to 384%.

Chart courtesy of StockCharts.com

About JUSHF Stock

Jushi Holdings Inc is a multistate owner and operator of cannabis cultivation, processing, and retail licenses.

The company has highly concentrated positions in markets with favorable regulatory developments, including California, Illinois, Nevada, Pennsylvania, and Virginia. It’s also targeting emerging markets like Ohio. (Source: “Investor Presentation – June 2022,” Jushi Holdings Inc, last accessed June 9, 2022.)

The company currently operates 29 dispensaries under the BEYOND / HELLO brand and plans to open seven more BEYOND / HELLO locations by the end of 2022. It expects to be operating 50 of the stores by the end of 2023.

Jushi Holdings Inc also operates six cultivation sites and six manufacturing facilities.

Some of the company’s award-winning brands are “The Bank” (marijuana flower), “The Lab” (vape products), “Tasteology” (edibles), “Seche” (fine grind and fine flower), “Nira Medicinals” (cannabidiol products), and “Nira” (physician-formulated cannabidiol products).

Another Quarter of Great Financial Results

For the first quarter of 2022 ended March 31, Jushi Holdings announced that its revenue increased by 48.5% year-over-year to $61.9 million. (Source: “Jushi Holdings Inc. Reports First Quarter 2022 Financial Results,” Jushi Holdings Inc, May 25, 2022.)

The company’s solid gains were driven by the expansion of its retail footprint from 17 to 29 stores, its acquisition of Nature’s Remedy of Massachusetts, Inc., and the increased wholesale sales at its Pennsylvania and Virginia grower-processor facilities.

Jushi Holdings Inc reported a first-quarter 2022 net loss of $14.3 million, or $0.08 per share. In the first quarter of 2021, the company had a net loss of $26.8 million, or $0.18 per share. In the fourth quarter of 2021, Jushi Holdings had a net income of $5.1 million, or $0.04 per share.

The net loss of $0.08 per diluted share was primarily the result of infrastructure and headcount investments in 2021 that are expected to have a transitional impact on the company’s 2022 financial results.

Jushi Holdings Inc’s adjusted gross profit in the first quarter of 2022 was $25.5 million, or 41.3% of its revenue. That’s compared to $26.4 million, or 40.0% of its revenue, in the fourth quarter of 2021, and $19.2 million in the first quarter of 2021.

The company’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the first quarter of 2022 were $1.1 million, a decrease from $1.5 million in the fourth quarter of 2021 and $4.0 million in the first quarter of 2021. The sequential decrease was driven by lower revenues and gross profit.

Jushi Holdings Inc ended the first quarter of 2022 with cash and cash equivalents of $76.2 million.

“Despite the seasonal weakness in the first quarter and a series of challenges including the loss of store hours due to Omicron, snowstorms, and the Pennsylvania distillate cartridges recall, I am pleased with our first quarter performance and the progress we have made in positioning our business for the long term,” said Jim Cacioppo, CEO, chairman, and founder. (Source: Ibid.)

Analyst Take

Jushi stock is one of the best overlooked U.S. cannabis stocks. Jushi Holdings Inc has been reporting industry-leading organic revenue and adjusted EBITDA margin growth, and it has a solid balance sheet.

The company also has a best-in-class merger and acquisition track record and an industry-leading online platform. It has been expanding the number of its stores and it has been significantly expanding its cultivation and processing facilities.

All this spells possible gains from JUSHF stock.