Jushi : Financial Statements FY 2024

Published: 2025-03-06 21:04:06 ET JUSH.CN

THESE FINANCIAL STATEMENTS FOR JUSHI HOLDINGS INC. ARE ALSO INCLUDED IN THE FORM 10‐K FOR

THE YEAR ENDED DECEMBER 31, 2024, FILED ON SEDAR IN ITS ENTIRETY

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (this "report") may contain "forward-looking statements" and "forward-looking information" within the meaning of applicable securities laws, including Canadian securities legislation and United States ("U.S.") securities legislation (collectively, "forward-looking information") which are based upon the Company's current internal expectations, estimates, projections, assumptions and beliefs. All information, other than statements of historical facts, included in this report that address activities, events or developments that the Company expects or anticipates will or may occur in the future constitutes forward-looking information. Forward-looking information is often identified by the words, "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions and includes, among others, information regarding: future business strategy; competitive strengths, goals, expansion and growth of the Company's business, operations and plans, including new revenue streams; the integration and benefits of recently acquired businesses or assets; roll out of new operations; the implementation by the Company of certain product lines; the implementation of certain research and development; the application for additional licenses and the grant of licenses that will be or have been applied for; the expansion or construction of certain facilities; the reduction in the number of our employees; the expansion into additional U.S. and international markets; any potential future legalization of adult use and/or medical marijuana under U.S. federal law; expectations of market size and growth in the U.S. and the states in which the Company operates; expectations for other economic, business, regulatory and/or competitive factors related to the Company or the cannabis industry generally; and other events or conditions that may occur in the future.

Readers are cautioned that forward-looking information is not based on historical facts but instead is based on reasonable assumptions and estimates of the management of the Company at the time they were provided or made and such information involves known and unknown risks, uncertainties, including our ability to continue as a going concern, and other factors that may cause the actual results, level of activity, performance or achievements of the Company, as applicable, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Such factors include, among others discussed in detail in Item 1A. Risk Factors in Part I of this Form 10-K: the limited operating history of the industry and the Company; risks related to managing the growth of the Company including completed, pending or future acquisitions or dispositions, including potential future impairment of goodwill or intangibles acquired and/or post-closing disputes; risks related to the continued performance, expansion and/ or optimization of existing operations in California, Illinois, Massachusetts, Nevada, Ohio, Pennsylvania, and Virginia; risks related to the anticipated openings of additional dispensaries or relocation of existing dispensaries subject to licensing approval; the Company's history of operating losses and negative operating cash flows; increasing competition in the industry; risks inherent in an agricultural business, such as the effects of natural disasters; reliance on the expertise and judgment of senior management of the Company; risks associated with cannabis products manufactured for human consumption including potential product recalls; limited research and data relating to cannabis; constraints on marketing products; risk of litigation; insurance-related risks; public opinion and perception of the cannabis industry; risks related to the economy generally; fraudulent activity by employees, contractors and consultants; risks relating to the Company's current amount of indebtedness; reliance on key inputs, suppliers and skilled labor, and third party service provider contracts; reliance on manufacturers and contractors; risks of supply shortages or supply chain disruptions; risks relating to pandemics and forces of nature; risks related to the enforceability of contracts; risks related to inflation, the rising cost of capital, and stock market instability; risks relating to U.S. regulatory landscape and enforcement related to cannabis, including political risks; risks relating to anti-money laundering laws and regulation; cannabis-related tax risks and challenges from governmental authorities with respect to the Company's application for Employee Retention Tax Credits (ERTC); other governmental and environmental regulation; risks related to proprietary intellectual property and potential infringement by third parties; sales of a significant amount of shares by existing shareholders; the limited market for securities of the Company; risks relating to the need to raise additional capital either through debt or equity financing; costs associated with the Company being a publicly-traded company and a U.S. and Canadian filer; risks related to co- investment with parties with different interests to the Company; conflicts of interest and related party transactions; cybersecurity risks; and risks related to the Company's critical accounting policies and estimates.

Table of Contents

Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such forward-looking information will prove to be accurate as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on the forward-looking information contained in this report or other forward-looking statements made by the Company. Forward-looking information is provided and made as of the date of this Annual Report on Form 10-K and the Company does not undertake any obligation to revise or update any forward-looking information or statements other than as required by applicable law.

Unless the context requires otherwise, references in this report to "Jushi," "Company," "we," "us" and "our" refer to Jushi Holdings Inc. and our subsidiaries.

Table of Contents

1Item 8. Audited Financial Statements

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Changes In Equity (Deficit)

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Table of Contents

Report of Independent Registered Public Accounting Firm (PCAOB ID No. 324)

To the Stockholders and the Board of Directors of Jushi Holdings Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Jushi Holdings Inc. and its subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in equity (deficit), and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively, the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Macias Gini & O'Connell LLP

We have served as the Company's auditor since 2023.

Irvine, California

March 6, 2025

JUSHI HOLDINGS INC.

CONSOLIDATED BALANCE SHEETS

(in thousands of U.S. dollars, except share amounts)

December 31, 2024

December 31, 2023

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

19,521

26,027

Restricted cash - current

3,128

Accounts receivable, net

1,461

3,380

Inventories, net

36,138

33,586

Prepaid expenses and other current assets

15,030

15,514

Total current assets

72,150

81,635

NON-CURRENT ASSETS:

Property, plant and equipment, net

144,063

159,268

Right-of-use assets - finance leases

60,627

63,107

Other intangible assets, net

100,472

95,967

Goodwill

30,910

Other non-current assets

30,273

30,358

Restricted cash - non-current

1,825

2,150

Total non-current assets

368,170

381,760

Total assets

440,320

463,395

LIABILITIES AND EQUITY (DEFICIT)

CURRENT LIABILITIES:

Accounts payable

21,459

15,383

Accrued expenses and other current liabilities

32,786

44,070

Income tax payable

2,299

5,190

Debt, net - current portion (including related party principal amounts of $800 and $3,298 as of

2,758

86,514

December 31, 2024 and 2023, respectively)

Finance lease obligations - current

9,593

8,885

Derivative liabilities - current

2,418

Total current liabilities

68,895

162,460

NON-CURRENT LIABILITIES:

Debt, net - non-current (including related party principal amounts of $35,296 and $19,788 as of

183,449

126,041

December 31, 2024 and 2023, respectively)

Finance lease obligations - non-current

52,742

52,839

Derivative liabilities - non-current

3,128

220

Unrecognized tax benefits

143,688

100,343

Other liabilities - non-current

38,653

29,111

Total non-current liabilities

421,660

308,554

Total liabilities

490,555

471,014

COMMITMENTS AND CONTINGENCIES (Note 22)

EQUITY (DEFICIT):

Common stock, no par value; authorized shares - unlimited; issued and outstanding shares -

196,696,597 and 196,631,598 Subordinate Voting Shares as of December 31, 2024 and 2023,

respectively

Paid-in capital

508,386

503,612

Accumulated deficit

(558,621)

(509,844)

Total Jushi shareholders' equity (deficit)

(50,235)

(6,232)

Non-controlling interests

(1,387)

Total deficit

(50,235)

(7,619)

Total liabilities and equity (deficit)

440,320

463,395

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

JUSHI HOLDINGS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands of U.S. dollars, except share and per share amounts)

Year Ended December 31,

2024

2023

REVENUE, NET

257,525

269,445

COST OF GOODS SOLD

(139,222)

(153,217)

GROSS PROFIT

118,303

116,228

OPERATING EXPENSES

Selling, general and administrative

107,008

110,472

Asset impairments

432

8,574

Total operating expenses

107,440

119,046

INCOME (LOSS) FROM OPERATIONS

10,863

(2,818)

OTHER INCOME (EXPENSE):

Interest expense, net

(37,425)

(36,966)

Fair value gain on derivatives

6,275

9,589

Other, net

3,140

(3,101)

Total other income (expense), net

(28,010)

(30,478)

LOSS BEFORE INCOME TAX

(17,147)

(33,296)

Income tax expense

(31,630)

(31,806)

NET LOSS

(48,777)

(65,102)

LOSS PER SHARE - BASIC AND DILUTED

(0.25)

(0.33)

Weighted average shares outstanding - basic and diluted

195,158,282

194,770,212

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

JUSHI HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)

(in thousands of U.S. dollars, except share amounts)

Subordinate

Total Jushi

Non-

Paid-In

Accumulated

Shareholders'

Total Equity

Voting

Equity

Controlling

Capital

Deficit

(Deficit)

Interests

(Deficit)

Balances - January 1, 2023

196,686,372

492,020

(444,742)

47,278

(1,387)

45,891

Shares canceled upon forfeiture of restricted stock, net of restricted

(54,774)

stock grants

Share-based compensation (including related parties)

8,092

Modification and reclassification of warrants

3,391

Cashless exercise of options

(282)

Issuance of warrants

391

Net loss

(65,102)

Balances - December 31, 2023

196,631,598

503,612

(509,844)

(6,232)

(1,387)

(7,619)

Shares issued upon exercise of stock options

64,999

Share-based compensation (including related parties)

4,222

Issuance of warrants

863

Deconsolidation of Jushi Europe

1,387

Northern Cardinal Ventures Transaction

(350)

Net loss

(48,777)

Balances - December 31, 2024

196,696,597

508,386

(558,621)

(50,235)

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

JUSHI HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of U.S. dollars)

Year Ended December 31,

2024

2023

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss

(48,777)

(65,102)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization, including amounts in cost of goods sold

29,889

26,588

Share-based compensation

4,222

8,092

Fair value changes in derivatives

(6,275)

(9,589)

Non-cash interest expense, including amortization of deferred financing costs

7,044

6,498

Deferred income taxes and uncertain tax positions

28,900

25,874

Loss on debt modification/extinguishment/redemption

362

Asset impairments

432

8,574

Gain on deconsolidation of Jushi Europe

(1,896)

Other non-cash items, net

1,480

7,207

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable

1,863

(2,366)

Inventory

(4,006)

(4,687)

Prepaid expenses and other current and non-current assets

(1,514)

404

Accounts payable, accrued expenses and other current liabilities

9,845

(4,811)

Net cash flows provided by (used in) operating activities

21,569

(3,318)

CASH FLOWS FROM INVESTING ACTIVITIES:

Payments for property, plant and equipment

(4,708)

(10,743)

Proceeds from sale of assets

2,848

4,351

Payments for investments, net of cash of $218

(5,207)

Net cash flows used in investing activities

(7,067)

(6,392)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercise of options

Proceeds from term loans, net of debt discount of $970

47,530

Payments of promissory notes

(6,350)

Proceeds from mortgage loans

21,900

Payments on acquisition related credit facility

(60,125)

(4,875)

Payments of finance leases

(2,091)

(3,526)

Payments of mortgage loans

(408)

(211)

Payments of loan financing costs

(2,689)

(250)

Proceeds from other financing activities

1,633

3,862

Payments of other financing activities

(2,000)

(3,031)

Net cash flows (used in) provided by financing activities

(24,461)

13,869

NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

(9,959)

4,159

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR

31,305

27,146

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR

21,346

31,305

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

JUSHI HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of U.S. dollars)

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for interest (excluding capitalized interest)

Cash (received) paid for income taxes, net

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Capital expenditures

Right of use assets from finance lease liabilities

Issuance of second lien notes for settlement of accrued bonus

Issuance of second lien notes for debt exchange

Warrants issued for debt exchange

Warrants issued for term loans

Issuance of debt to acquire non-controlling interest in Northern Cardinal

Note receivable issued for sale of business license

Year Ended December 31,

2024 2023

30,050

29,363

(4,389)

2,780

2,897 1,475

2,030681

1,382 1,900

4,750-

The accompanying notes are an integral part of these consolidated financial statements.

Disclaimer

Jushi Holdings Inc. published this content on March 07, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 07, 2025 at 02:03:06.427.