• Revenue: $64.6 million for Q2 2024, compared to $66.4 million in Q2 2023.

• Gross Profit: $32.6 million with a gross profit margin of 50.4%.

• Adjusted EBITDA: $14.5 million with a 22.4% adjusted EBITDA margin.

• Retail Revenue: $57 million, compared to $59.6 million in Q2 2023.

• Wholesale Revenue: $7.6 million, up from $6.8 million in Q2 2023.

• Operating Expenses: $24.2 million, down from $27.2 million in Q2 2023.

• Net Loss: $1.9 million, compared to $14 million in Q2 2023.

• Cash Position: Approximately $35 million in cash, cash equivalents, and restricted cash as of June 30, 2024.

• Debt Reduction: Reduced principal debt by $28.2 million since July 1, 2023, with no maturities until 2026.

• Store Count: 35 operating dispensaries across seven states at the end of Q2 2024, up from 34 in Q2 2023.

• Jushi Branded Product Sales: 56% of total revenue, up from 47% in Q2 2023.

• Warning! GuruFocus has detected 7 Warning Signs with JUSHF.

Release Date: August 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Jushi Holdings Inc (JUSHF) reported a gross profit of $32.6 million for Q2 2024, representing a gross profit margin of 50.4%, indicating strong financial performance.

• Adjusted EBITDA grew to $14.5 million with a 22.4% margin, reflecting improved operational efficiency.

• The company successfully expanded its product offerings, adding 308 unique SKUs across five vertical markets, enhancing its competitive edge.

• Jushi branded product sales increased to approximately 56% of total revenue, showcasing strong brand performance.

• The company has reduced its debt significantly, with no maturities until 2026, improving its financial stability and liquidity.

Negative Points

• Revenue decreased slightly to $64.6 million in Q2 2024 from $66.4 million in Q2 2023, primarily due to pricing pressures.

• Retail revenue faced challenges with a decline from $59.6 million in Q2 2023 to $57 million in Q2 2024, amidst market price compression and increased competition.

• Wholesale revenue in Massachusetts declined due to oversupply at competitors' facilities, impacting volume and pricing.

• The company faces regulatory uncertainties in key markets like Pennsylvania and Virginia, which could affect future growth.

• Despite improvements, the company still reported a net loss of $1.9 million for the second quarter, indicating ongoing financial challenges.

Q & A Highlights

Q: Can you share insights on the price compression in Pennsylvania and how it compares to other states? A: James Cacioppo, CEO: There hasn't been a significant change in price compression in Pennsylvania compared to previous quarters. Our costs are decreasing more than prices are compressing, which is why our margins are improving. We're also verticalizing the business, which helps manage these pressures. Overall, the price compression is modest and manageable.

Q: Can you elaborate on the delivery business expansion in Virginia and its impact? A: James Cacioppo, CEO: The delivery business in Virginia, particularly in HSA I, is growing due to underserved markets. Delivery accounts for about 10% of our sales, especially in areas like Alexandria and Arlington. This business is high-margin and complements our retail operations without additional costs.

Q: How advanced are your plans for expanding to eight stores in Ohio, and what challenges do you face? A: James Cacioppo, CEO: We are experienced in acquiring store licenses and have a strong team working on this. We aim to roll out these stores over the next 12 to 15 months. The competition mainly comes from private entities, and we have a financial advantage over them.

Q: What are your expectations for adult-use legalization in Pennsylvania and Virginia, and how will it impact your operations? A: James Cacioppo, CEO: Pennsylvania is actively negotiating adult-use legalization, which could happen soon due to budget deficits and competition from neighboring states. Virginia might take longer, potentially until 2027, but we are preparing for both scenarios with strategic expansions.

Q: With the IRS letter on June 28, are there any changes in your approach to 280E at the federal level? A: James Cacioppo, CEO: Our position on 280E remains unchanged, and we are confident in our stance. We have fully refinanced our debt with SunStream, leaving them with zero obligations.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.