Most people have never heard of Jushi Holdings Inc (OTCMKTS:JUSHF, CNSX:JUSH), but if you believe in the future of the cannabis industry, this under-the-radar pot stock could be one of the best opportunities on the market.
As you can see, like a lot of smaller pot stocks, Jushi Holdings Inc is listed on the Canadian Securities Exchange. But American investors can still get a piece of the action, because the company does trade over the counter in the U.S under the ticker “JUSHF.”
Moreover, while Jushi Holdings is listed north of the border, its focus is on the U.S. As a matter of fact, the company is a multistate operator, meaning it has operations across multiple legal cannabis states in the country.
Jushi is vertically integrated, too, as it has cultivation, processing, as well as retail capabilities.
According to the latest investor presentation, the company has 10 open cannabis stores, three cultivation facilities, and four extraction and processing facilities. (Source: “Jushi,” Jushi Holdings Inc, last accessed September 4, 2020.)
Obviously, there are companies with a much bigger presence in the U.S. cannabis industry, but Jushi stock still deserves special attention due to the sheer growth in its business.
In fact, the growth has been so strong that even the COVID-19 pandemic could not stop the company’s momentum.
Consider that in the fourth quarter of 2019, Jushi Holdings generated around $6.0 million in revenue. Then, in the first quarter of 2020—when the coronavirus outbreak started—the company’s revenue surged 43% to $8.6 million. (Source: “Jushi Holdings Inc. Reports First Quarter 2020 Financial Results,” Jushi Holdings Inc, July 7, 2020.)
The company also managed to grow its gross profit by 55% sequentially to $4.2 million in the first quarter. At the same time, its net loss narrowed slightly from $0.18 per share to $0.17 per share.
Of course, given the timing of COVID-related shutdowns in the U.S., it was the second quarter of 2020 that took the bulk of the impact from the pandemic.
We have seen plenty of companies reporting massive sales declines in their second-quarter earnings reports.
But that was not the case at all for this pot company. In fact, if you take a look at the numbers, you’d see that the growth momentum for Jushi Holdings Inc got even stronger as the economy went into a slump.
In the second quarter of 2020, Jushi Holdings generated $14.9 million in revenue. That’s up another 73% quarter-over-quarter! (Source: “Jushi Holdings Inc. Reports Second Quarter 2020 Financial Results,” Jushi Holdings Inc, August 27, 2020.)
Gross profit totaled $7.5 million in the second quarter. That’s up a whopping 80% sequentially!
At the bottom line, the company still incurred a loss. But, at $0.10 per share, Jushi’s net loss in the second quarter narrowed quite a bit from its net loss of $0.17 per share in the first quarter.
However you look at it, Jushi Holdings Inc has been firing on all cylinders.
But nothing is perfect. As a small-name pot company, Jushi Holdings was not immune to market downturns, even though its business remained solid. When the stock market entered a major sell-off in March, Jushi stock plunged. At one point, JUSHF stock was trading well below $1.00 apiece.
Jushi Holdings Inc (OTCMKTS:JUSHF) Stock Chart
Chart courtesy of StockCharts.com
However, as you can see from the above chart, JUSHF stock quickly bounced back from its lows in March. And that momentum continued. In fact, in just the last three months, Jushi stock has surged more than 100%.
The best part is that, going forward, there are things that could further boost this pot stock’s investor appeal.
Remember when I said that Jushi Holdings has 10 open dispensaries?
Well, that’s just a start, because the company also holds licenses to open 20 more locations, meaning it has the potential to triple its current retail presence.
On the financial front, Jushi’s growth is not expected to stop anytime soon.
Management expects the company to generate revenue of $22.0 to $25.0 million in the third quarter, and $25.0 to $30.0 million in the fourth quarter. Looking further ahead, this multistate operator has reaffirmed its 2021 revenue guidance of $200.0 to $250.0 million.
At the end of the day, keep in mind that, even after the recent rally in JUSHF stock, the company’s market capitalization is just around $200.0 million. And, with a share price of $2.14, Jushi Holdings Inc is basically trading at penny stock levels.
Therefore, if the company reaches its guidance range and boosts its annual revenue to over $200.0 million next year, I wouldn’t be surprised to see JUSHF stock making another big move to the upside.