Jushi Holdings Inc. (“Jushi” or the “Company”) (NEO: JUSH.B) (OTCQX: JUSHF), a globally-focused, multi-state cannabis and hemp operator, today is providing a shareholder update and reporting its financial results for the third quarter ended September 30, 2019. All financial information is provided in U.S. dollars unless otherwise indicated.

“During the third quarter of 2019, we generated revenue of $3.6 million, an increase sequentially from $0.2 million, due primarily to commencement of retail operations in Pennsylvania and New York, and cultivation and manufacturing in Nevada. Additionally, we reported a net gain of $13.2 million in other income primarily from sale of our minority stake in Gloucester Street Capital resulting in net income of $4.2 million for the quarter,” stated Jim Cacioppo, CEO and Chairman of Jushi.

“In the five months since becoming a public company and the related financing, we have methodically invested our capital targeting attractive adult-use and limited license medical markets that today include Pennsylvania, Virginia, California, New York, Nevada, Ohio and Illinois. In Pennsylvania, for example, our BEYOND/HELLO™ brand has established a major footprint in a limited license medical state with five retail dispensaries operational today and at least one to two more projected before the end of the year with three to five more projected to open in the first half of 2020. We continue to explore further growth opportunities, increasing our applications pipeline to ten pending and over 30 planned application submissions in 2019 and 2020. The pipeline includes applications in existing states in which we operate such as California and New York as well as new markets that fit within our strategy such as Florida, Georgia, Illinois, Michigan, Missouri and New Jersey. Led by our team of industry, operations and finance experts, we remain confident in the opportunity ahead for our continued expansion,” concluded Mr. Cacioppo.

Key Developments for the Quarter Ending to Date:

• Pennsylvania: During the quarter, the Company’s BEYOND/HELLO™ retail chain, which brings high-quality personalized marijuana treatments and products to patients, opened three new medical marijuana dispensaries in Philadelphia, Scranton and Johnstown, Pennsylvania. In September, Jushi signed a definitive agreement to acquire the majority ownership of Agape Total Health Care Inc (“Agape”), another Pennsylvania Dispensary Permittee. Agape plans to open three retail locations in the Philadelphia region, Reading and Pottsville. Between BEYOND/HELLO^TM and Agape, the total retail locations could reach 15 in Pennsylvania a key east coast limited license medical market. We anticipate opening all 15 dispensaries by the end of 2020 in a steady progression throughout Q4 2019 and in each quarter of 2020.
• Nevada: In July, the Company’s subsidiary Production Excellence, LLC (“Production Excellence”) received local City of North Las Vegas authorization to enter the greater Las Vegas, Nevada market under a management services agreement with Franklin Bioscience NV, LLC (“Franklin Bioscience Nevada”). Franklin Bioscience Nevada holds medical and adult‐use cannabis cultivation, processing and distribution licenses issued by the Nevada Department of Taxation and currently operates cultivation, production and distribution facilities in North Las Vegas, Nevada.
• California: Through acquisitions and new license applications, Jushi currently expects to have four retail store openings in 2020 in four high income and well trafficked cities: San Diego, Santa Barbara, Malibu and Culver City. In each dispensary, the Company plans to offer delivery services subject to regulatory approvals. Of the four, the San Diego and Santa Barbara dispensaries are expected to be operational by Jushi in the first quarter of 2020.
• Virginia: In September, the Company completed the acquisition of the majority of the membership interests in Dalitso LLC, a Virginia-based pharmaceutical processor for medical cannabis extracts. Dalitso is currently one of only five applicants to receive conditional approval for a permit issued by the Virginia Board of Pharmacy to cultivate and process medical cannabis, and to dispense and deliver CBD oil and THC-A oil extracts in Virginia. Dalitso’s conditional approval is for the northeast region of Virginia, covering approximately 28.2% of the commonwealth’s total population.
• New York: In October, Jushi closed the sale of its 16.5% ownership interest in Gloucester Street Capital, the parent company of Valley Agriceuticals, LLC, which holds one of ten New York medical cannabis licenses, to Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF). The approximate total market value of cash, short-term notes and securities received by Jushi for the sale of its 16.5% interest is approximately $15 million to $20 million (depending on the contingency payouts).
• Applications: In July, Jushi’s wholly-owned subsidiary received approval from Culver City to move forward with submitting a CUP application for a retail and delivery permit. The Company has ten pending applications and has a planned pipeline of over 30 application submissions for 2020.
• Significant Settlement: In October, the Company received $5 million cash pursuant to a confidential legal settlement.

Third Quarter 2019 Financial Highlights

Financial Results for the Third Quarter Ended September 30, 2019

Revenue for the third quarter of 2019 increased 2871% to $3.6 million, compared to $0.1 million in the third quarter of 2018 due to revenue from operations.

Gross profit for the third quarter of 2019 was $1.5 million, resulting in gross margin of 43%, compared to $0.1 million for the third quarter of 2018. The increase over the prior year was primarily due to the increase in retail sales.

Net income for the third quarter of 2019 was $4.2 million, or $0.04 per diluted share, compared to a net loss of $2.3 million, or $0.05 per share, in the third quarter of 2018. During the quarter, the Company reported a gain on a financial asset of approximately $9.2 million and one-time other income of approximately $5 million.

Balance Sheet and Liquidity

The Company had cash of $26.8 million, short term investments of $1.3 million, total current assets of $59.5 million and current liabilities of $22.9 million as of September 30, 2019.  The Company had net working capital of $36.6 million.

In addition, Jushi expects to receive an additional $15 million – $20 million in cash, securities and cash earn-out from the sale of its 16.5% ownership interest in Gloucester Street Capital.