Mengel / Fool are strong on JUSI Just reviewed recommendations from Jimmy Mengel (the Adventure Capitalist) and Sean Williams (Motley Fool) both really like JUSI's potential......I've owned this for a year now and I'm very happy with their progress, I particularly like how strong a tie insiders have with the company.
Mengel...
Let's focus on Jushi (CSE: JUSH; OTCMKTS: JUSHF) today.
For new readers, Jushi is a vertically integrated, multistate cannabis operator in the U.S. I first recommended it because of its strategic locations in Pennsylvania and Virginia. The company was a first mover in each state and will continue to do incredibly well as complete legalization/decriminalization slowly moves toward reality.
It is already delivering results...
Third-Quarter 2020 Financial Highlights:
- Total revenue increased 67% sequentially to $24.9 million.
- Gross profit of $12.3 million, an increase of 64% sequentially.
- Adjusted EBITDA of $1.9 million, a $3.1 million improvement compared with the second quarter of 2020.
- $43.2 million of cash and marketable securities on the balance sheet as of September 30, 2020, and approximately $73 million on pro forma basis for same period, including the October equity raise.
Third-Quarter Operational Highlights:
- Closed equity acquisition of Pennsylvania grower-processor permit holder.
- Closed on an approximate $33 million debt financing of 10% senior secured notes and warrants.
- Opened 10th BEYOND / HELLOTM retail location and the eighth Pennsylvania medical marijuana dispensary in Reading, Pennsylvania.
The company also announced "plans to nearly double the square footage of its Pennsylvania grower-processor facility in Scranton, Pennsylvania, to more than 160,000 square feet in a phased expansion, which will nearly triple its canopy space to approximately 98,000 square feet."
The first phase of this is expected to come online in mid-2021, and the final phase will be finished in 2Q 2022.
The company has also opened its first retail dispensary in Virginia and two additional stores in Illinois.
But it isn't operating only in the U.S. Jushi also just announced the award of a provisional license for a medical cannabis cultivation in Portugal through subsidiary Jushi Europe. Jushi is currently considering a spinoff to shareholders of Jushi Holdings Inc.’s 51% stake in Jushi Europe.
Despite already being up 208% on the company, I'm very confident that we haven't witnessed the biggest run-up.
Jushi is shooting to end the year with positive earnings before interest, taxes, depreciation, and amortization (EBITDA), and it predicts it will have around $40 million in earnings for 2021.
That presumes a total revenue between $205 million and $255 million for next year. If the company can accomplish that, it will go a long way in showing what I've thought from the beginning: Its operational expertise, focus on smart capital, and forward-thinking locations make it better than many of the other publicly traded cannabis companies that have struggled with profitability.
Jushi has already shown to be a great company for its current shareholders. But once its revenue growth starts running up, so will the stock price. The next step would be uplisting, which would be yet another driver for the stock.
Motley Fool...
U.S. marijuana stocks should also fare exceptionally well under Joe Biden, albeit not for the reason you might think. I'm not expecting big changes in how the federal government classifies cannabis. Rather, I'm looking for new state-level legalizations and organic growth to drive results for multistate operators (MSO) like Jushi Holdings (OTC: JUSHF).
Jushi's strategy is a bit different from most MSOs. Instead of piling into as many legalized states as possible, Jushi has focused on a handful of limited license states: Pennsylvania, Virginia, and Illinois. In Virginia, for example, Jushi will be the only licensed retailer in its region. Meanwhile, license limits in Pennsylvania and Illinois ensure that it'll be able to gobble up a meaningful share of these respective markets.
Jushi's executives have skin in the game. Whereas most pot stocks have been raising capital by selling stock on a seemingly nonstop basis, Jushi's execs and insiders have put up $45 million of the roughly $250 million raised since inception. The interests of management are aligned with their shareholders, which is exciting for a company that's expected to more than quadruple sales between 2020 and 2022.