JUSHF Stock Down 50% in 2022 but Has 145% Upside

Fresh off reporting strong second-quarter results, Jushi Holdings Inc (CNSX:JUSH, OTCMKTS:JUSHF) reported solid preliminary third-quarter results, positioning the company for robust financial growth in the fourth quarter and in 2023.

Jushi Holdings Inc is an under-the-radar U.S. cannabis company that's been doing everything right. Despite that, Jushi stock is down by 50% year-to-date and 70% year-over-year.

But don’t let JUSHF stock’s share-price performance scare you away. The entire marijuana stock market is in the dumps because of slow-moving politicians in Washington, D.C. (in terms of federally legalizing cannabis).

ETFMG Alternative Harvest ETF (NYSEARCA:MJ), the world’s largest marijuana exchange-traded fund (ETF), is down by 47% year-to-date and 62% year-over-year. AdvisorShares Pure US Cannabis ETF (NYSEARCA:MSOS) is down by 53% year-to-date and 63% year-over-year.

Conservative Wall Street is waking up to Jushi stock’s untapped potential. Analysts' 12-month average share-price estimate for Jushi Holdings Inc is $2.66 and their high estimate is $3.39. This points to potential gains in the range of 68% to 145%.

Chart courtesy of StockCharts.com

Jushi Holdings Inc Overview

Jushi 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, and Nevada. Jushi also targets the emerging marijuana markets of Pennsylvania, Ohio, and Virginia. (Source: “Investor Presentation | September 2022,” Jushi Holdings Inc, last accessed November 24, 2022.)

The company currently operates 35 dispensaries under the "BEYOND / HELLO" brand. It expects to increase its store count to 37 by the end of 2022 and to 50 by the end of 2023.

Jushi Holdings Inc’s cultivation and processing facilities cover 330,000 square feet and have annual biomass capacity of 41,000 pounds. The company expects that, by year-end, its annual biomass capacity will have grown to 59,000 pounds.

Some of Jushi Holdings Inc’s award-winning brands are "The Bank" (marijuana flower), "The Lab" (vape products), "Tasteology" (edibles), "Seche" (fine grind and fine flower), "Nira Medicinals" (cannabidiol [CBD] products) and "Nira" (physician-formulated CBD products).

Excellent Q2 & Preliminary Q3 Results

Jushi's second-quarter financial results included revenue climbing by 52% year-over-year to $72.8 million and net income of $12.1 million, or $0.06 per share. (Source: “Jushi Holdings Inc. Reports Second Quarter 2022 Financial Results,” Jushi Holdings Inc, August 29, 2022.)

During the second quarter, Jushi expanded its vertically integrated business footprint in Nevada, opened its 32nd and 33rd national retail locations, was awarded a provisional medical marijuana dispensary license in the Cincinnati Tri-State Area (establishing the company’s fifth vertically integrated state-level operation), and launched two new product lines in Pennsylvania.

On November 14, Jushi Holdings Inc announced its preliminary results for the third quarter ended September 30.

The company's third-quarter revenue advanced 34.9% year-over-year to $72.8 million and its gross profit advanced 18.9% to $27.7 million. (Source: “Jushi Holdings Inc. Reports Preliminary Third Quarter 2022 Financial Results,” Jushi Holdings Inc, November 14, 2022.)

Management expects to officially report a third-quarter net loss in the range of $52.9 to $62.8 million. Meanwhile, its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the third quarter were $700,000.

Jushi Holdings Inc ended the third quarter with cash and equivalents of $31.1 million.

In the third quarter, the company:

• Opened its 34th and 35th retail locations nationwide and opened its third and fourth Beyond / Hello dispensaries in Virginia
• Increased its annual biomass capacity by 7,300 lbs to 45,500 lbs
• Gained almost 8,000 new patients in Virginia, compared to about 1,950 in the second quarter

Jim Cacioppo, Jushi Holdings Inc's CEO and chairman, commented,

As we look out to 2023 and beyond, we anticipate that our sales growth and improved profitability will be driven by the growth of the Virginia market, increased production and sell-through of high quality products produced at our grower-processor facilities, and our portfolio of assets focused in markets that are well positioned to take advantage of future state-level regulatory developments.

(Source: Ibid.)

Analyst Take

There are many great things going on at Jushi Holdings Inc. They just aren’t reflected in JUSHF stock's beaten-down share price.

In the third quarter, the company bolstered its retail portfolio with the addition of two new stores, moved closer to full-scale production at its grower-processor facilities, and expanded its portfolio of branded products.

As Jushi Holdings Inc approaches the end of 2022, it expects to begin realizing the benefits of its efforts to transition from being substantially retail-only and selling mostly third-party products to being a vertically integrated company.

The bottom line is that Jushi stock is currently one to watch.