The past week has been full of top-end cannabis-related headlines, but one of the craziest stories has to be the $4.5 billion takeover bid by rival Canopy Growth Corp. ($CGC) for the most valuable in the industry, medical marijuana producer and retailer Organa Brands ($ORB).
According to a Bloomberg report, a marijuana enterprise has 146% more equity than its market value, and that number will continue to rise.
In mid-November, medical marijuana grower Khloe Kush (OTC: KUSHQ) announced plans for a $1.5 million expansion of its 2.4-acre facility in Orange County, California. The facility, which has three grow rooms and is expected to produce roughly 1,000,000 square feet of medical marijuana annually, is currently at capacity, meaning it is growing at roughly the same rate as the average California marijuana crop.
Investing in a little-known marijuana stock may pay you handsomely.
“If you believe in the cannabis industry’s future, this under-the-radar marijuana stock may be one of the greatest bargains on the market.”
That’s what I informed Profit Confidential readers in September 2020 about Jushi Holdings Inc (CNSX:JUSH, OTCMKTS:JUSHF). I argued why Jushi stock, which has already recovered from its March 2020 lows, might see additional upside in that piece, headlined “Jushi Holdings Inc: Why This $2.14 Pot Stock Might Double Again.”
JUSHF stock is no longer a $2.14 pot stock in today’s market. Jushi stock is now trading at $5.18 per share, representing a 142 percent gain.
However, the window of opportunity may still be open. JUSHF stock still has a lot of room to expand based on what the business has been accomplishing.
Allow me to elaborate.
Jushi Holdings Inc is a multistate, vertically integrated cannabis business based in Boca Raton, Florida. Jushi stock, like that of many other marijuana businesses in the United States, is traded over the counter in the United States and is listed on the Canadian Securities Exchange.
Jushi Holdings Inc has a market value of $820.0 million at its current share price.
That’s not a tiny sum in the marijuana industry in the United States, since there are lots of businesses with market capitalizations of less than $300 million (micro-caps). But it’s also not in the major leagues. Green Thumb Industries Inc (CNSX:GTII, OTCMKTS:GTBIF) and Curaleaf Holdings Inc (CNSX:CURA, OTCMKTS:CURLF) are two of the most powerful multistate marijuana companies, each with a market value of several billion dollars.
Jushi Holdings Inc, we can deduce, is a marijuana firm that has developed a foothold in the industry but has yet to scale up to become a major player.
This is confirmed by a glance at the company’s activities. Jushi Holdings has 20 operational shops, 14 planned stores, five growing sites, and five extraction and processing facilities, according to its most recent investor presentation. (Source: Jushi Holdings Inc, “Investor Presentation,” latest viewed July 26, 2021.)
It’s not terrible, but there’s still a lot more to come.
California, Illinois, Massachusetts, Nevada, Pennsylvania, and Virginia are the six states where Jushi is presently operating. In Pennsylvania, for example, the business already operates 13 dispensaries and expects to add five more this year. The business now operates one dispensary in Virginia, but intends to establish five more sites between 2021 and 2022.
Jushi is a fantastic growth story from a financial standpoint.
The business earned $80.8 million in total sales in 2020, an increase of 689.6% year over year. Its gross profit was $43.1 million, increasing 793.0 percent from the previous year. (Source: Jushi Holdings Inc., June 9, 2021, “Jushi Holdings Inc. Reports Fourth Quarter and Full Year 2020 Financial Results and First Quarter 2021 Financial Results.”)
Of course, marijuana businesses are renowned for their rapid development, but Jushi’s statistics are remarkable even by cannabis industry standards.
Things continued to improve in the first quarter of 2021.
The company’s overall sales increased by 29.0 percent to $41.7 million on a sequential basis. Meanwhile, Jushi’s gross profit increased by 4.7 percent to $20.1 million in the third quarter. The company’s adjusted profits before interest, taxes, depreciation, and amortization (EBITDA) rose from $2.6 million in the fourth quarter of 2020 to $3.0 million in the first quarter of 2021.
Jushi Holdings Inc declared a strong financial sheet as well. As of March 31, it had $168.0 million in cash, cash equivalents, and short-term investments in securities. At the time, the company’s total debt was about $82.0 million.
Jim Cacioppo, the CEO, chairman, and creator of Jushi, said,
We anticipate sales of $45 to $48 million and Adjusted EBITDA of $4 to $6 million in the second quarter of 2021. We are confident that the Company’s strong momentum, enviable presence, and strong financial sheet position it well to execute on its current objectives and generate long-term shareholder value through 2021 and beyond.
Ibid.) (Source: Ibid.)
Jushi would have accomplished another strong quarter of sequential growth if it reaches management’s forecast range, based on the figures we saw in the first quarter.
Stock Chart for Jushi Holdings Inc (OTCMKTS:JUSHF)
StockCharts.com provided the chart.
At the end of the day, bear in mind that marijuana stocks often move in tandem. For example, from the summer of last year to the beginning of this year, the sector saw a massive surge.
However, since the high of marijuana stocks in February 2021, attitude seems to have shifted. Most marijuana stocks have struggled to maintain their gains. While Jushi Holdings Inc has given huge gains since I first featured it last September, its performance in recent months hasn’t been spectacular, as we can see from the above Jushi stock chart.
We may see JUSHF stock jumping back on an upswing if investors warm up to the marijuana industry again.
There’s no shortage of pot stocks to trade right now, but I’m personally looking at one that has a lot of potential, and given the recent spike in price is looking very cheap.. Read more about jushi holdings not on robinhood and let us know what you think.
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