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Multistate operator Jushi Holdings is trying to improve its efficiency and margins as it hopes for new adult-use cannabis markets in 2024.
During a quarterly earnings call late Wednesday, Jushi CEO Jim Cacioppo cited initiatives to cut waste, improve post-harvest processing and get “new, higher-margin products” to market more quickly.
“The main goal of these efforts is to improve our product quality and value to the consumer, as well as increase the potency and yield of our grower-processor under the existing canopy without deploying significant new capital – but rather, better utilizing capital previously spent,” Cacioppo said in prepared remarks.
Cacioppo said Jushi hopes for positive developments in:
“Pennsylvania, Virginia and Ohio combine to represent 24 out of 35 of our operating retail store licenses, which places approximately 69% of our current retail store footprint in states that we believe are likely to soon transition to adult-use,” Cacioppo said.
The Jushi CEO also commented briefly on tax refunds, a hot topic this earnings season after Trulieve Cannabis Corp. said it had received $113 million in refunds related to Section 280E of the Internal Revenue Code and Ascend Wellness Holdings said it is expecting federal refunds.
During the conference call, Cacioppo told an analyst that any tax refunds Jushi might receive would be “primarily state tax refunds, because we’ve been pretty consistent in our approach, in some ways, to the federal 280E (taxation).”
Cacioppo later added that he didn’t want to give too much detail regarding Jushi’s tax strategy.
However, he said Jushi has “had a strategy in place regarding not paying 280E (taxes) that’s consistent with the strategy, I would say, that the industry has taken. … We don’t have a lot of federal refunds; the more mature ones are the states.”
Boca Raton, Florida-based Jushi posted $67.8 million in revenue for the quarter ended Dec. 31, down 11.8% from the same quarter in 2022.
Chief Financial Officer Michelle Mosier attributed the year-over-year revenue decline “to a reduction in sales in Nevada and Pennsylvania due to increased competition and pricing pressures, a reduction in Illinois sales due to the impact of the state of Missouri beginning adult-use cannabis sales and the closure of four underperforming stores in California and Pennsylvania.”
However, Mosier said Jushi experienced higher retail sales in Massachusetts, Ohio and Virginia as well as higher wholesale revenue.
Jushi said its wholesale revenue grew by 30% from 2022 to 2023.
The company posted a quarterly net loss of $18 million, an 87.1% improvement from the fourth quarter of 2022.
Jushi’s total 2023 revenue was $269.4 million, down 5.2% from 2022.
The company’s full-year net loss was $65.1 million, a 67.8% improvement over 2022’s net loss.
Jushi reported $31.3 million cash at the end of the quarter, including restricted cash.
Solomon Israel can be reached at solomon.israel@mjbizdaily.com.
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