Jushi Holdings Inc. (OTC:JUSHF) Q1 2026 Earnings Call Transcript

Jushi Holdings Inc. (OTC:JUSHF) Q1 2026 Earnings Call Transcript May 13, 2026

Operator: Ladies and gentlemen, greetings, and welcome to the Jushi Holdings Inc. Q1 2026 Earnings Conference Call [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host for today, Trent Woloveck, Chief Strategy Director. Please go ahead.

Trenton Woloveck: Good afternoon and thank you for joining us today on Jushi’s First Quarter 2026 Earnings Conference Call. My name is Trent Woloveck, and I am the Co-Chief Strategy Director at Jushi Holdings Inc. With me on today’s call are Jim Cacioppo, our Chairman and Chief Executive Officer; Michelle Mosier, our Chief Financial Officer; and Jon Barack, our President and Chief Revenue Officer. This call is also being broadcast live over the Internet and can be accessed from the Investor Relations section of the company’s website at ir.jushico.com. In addition to the company’s GAAP results, management will also provide supplementary results on a non-GAAP basis. Please refer to the press release issued today for a detailed reconciliation of GAAP and non-GAAP results, which can be accessed from the Investor Relations section of the company’s website.

Additionally, we would like to remind you that during this conference call, we will make forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. Although Jushi believes our estimates and assumptions to be reasonable, they are subject to a number of risks and uncertainties beyond our control and may prove to be inaccurate. We caution you that actual results may differ materially from any future performance suggested in the company’s forward-looking statements. The risk factors that may affect actual results are detailed in Jushi’s Form 10-K and other periodic filings and registration statements, which may be accessed via EDGAR and SEDAR as well as the Investor Relations section of our website.

These forward-looking statements speak only as of the date of this call, and Jushi expressly disclaims any obligation to update this forward-looking information. I will now turn the call over to Jim.

James Cacioppo: Thank you, Trent, and thank you, everyone, for joining our call today. Before jumping into our call, I’d like to reiterate my appreciation for President Donald J. Trump and his administration for finalizing the rescheduling of medical cannabis produced by state-licensed operators like Jushi from Schedule I to Schedule III under the Controlled Substances Act. This bold and historic action represents a clear example of promises made and promises kept. The administration’s move reflects a common sense commitment to listening to science, advancing medical research and delivering meaningful reform. This continues to put an America First approach to work by supporting American patients, businesses and communities. We look forward to the new administrative hearing scheduled for June 29 regarding the proposed rescheduling of all forms of cannabis from Schedule I to Schedule III and to see the lengthy process finally come to a positive conclusion.

This afternoon, I will provide a high-level overview of our financial results for the first quarter of 2026, followed by a discussion of the recent federal rescheduling action as well as an update on our corporate initiatives, including redomiciling to the United States and our recent refinancing. I will then discuss our retail and wholesale performance, along with key regulatory developments across our markets before turning the call over to Michelle to review our financial results in more detail. From a performance standpoint, the quarter was characterized by modest top line growth alongside continued margin expansion. Revenue for the first quarter of 2026 was $66.4 million, representing an increase of 4% compared to the prior year quarter.

In our retail channel, revenue increased modestly by $1 million compared to the prior year quarter. This growth was primarily driven by Ohio and Virginia. In Ohio, increased revenue reflected the addition of 4 new dispensaries since Q1 of last year. In Virginia, revenue growth was driven by strong performance across all 6 of our Virginia stores. More broadly, pricing pressure remained a factor across our markets and impacted average selling prices. In our wholesale channel, revenue increased 22.2% year-over-year, driven by strong growth in Massachusetts and Ohio. We also saw continued momentum in third-party packaged goods, achieving an all-time quarterly sales record. In Massachusetts, sales increased $1.2 million compared to the prior year quarter.

reflecting increased bulk sales, expanded wholesale distribution, including placement in new dispensaries and higher production volumes that supported greater product availability. In Ohio, revenue increased by approximately $400,000 year-over-year, driven by increased production capacity. This performance was also supported by continued improvements in product quality, which are driving a greater share of wholesale revenue toward higher-priced SKUs, including Flower Foundry and Hijinks. Year-over-year, both Flower Foundry and Hijinks achieved mid- to high single-digit growth in revenue and units, reflecting continued momentum in our premium product portfolio. We were especially pleased with the expansion of our wholesale distribution during the quarter, which was the key driver of growth as we added 32 new dispensary customers across our markets, including 20 in Massachusetts and 8 in Ohio.

In addition, we continue to broaden our product assortment with the introduction of 567 new SKUs during the quarter, representing a 45% increase year-over-year, supporting continued growth and differentiation across our portfolio. Gross profit was $29.9 million or 45% of revenue compared to $25.8 million or 40.4% of revenue in the prior year quarter. Operational execution remains a central focus for the organization. Across our grower processor footprint, we continue to see improvements in operational performance, including product quality and higher production volumes. These improvements are supporting both retail and wholesale channels and contributing to margin expansion. These benefits were partially offset by continued pricing pressure and increased promotional activity across our retail footprint.

Adjusted EBITDA was $11.4 million, representing an adjusted EBITDA margin of 17.2% compared to $9.8 million or 15.4% in the prior year quarter. The year-over-year increase in adjusted EBITDA primarily reflects stronger underlying operating performance. Furthermore, adjusted EBITDA in the prior year period included $2.8 million of employee retention credits that did not reoccur this year. Cash flows from operations totaled $8.6 million for the quarter compared to $7.5 million in last year’s first quarter, also highlighting the strength of our operating performance. As I mentioned at the opening of the call, a significant development for the industry occurred when a final order became effective on April 28, rescheduling state-licensed medical marijuana to Schedule III.

This represents a historic milestone for the cannabis industry and one of the most significant federal cannabis policy developments in decades. Importantly, the final order notes that state medical marijuana licensees will no longer be subject to the deduction disallowance under Section 280E of the Internal Revenue Code, which we expect will positively impact our tax expense on an ongoing basis. Medical sales represented approximately 60% of our total revenue in 2025, positioning us to significantly benefit from this change. The order also encourages Department of Treasury to consider retroactive relief for taxable years in which a state licensee operated under a medical marijuana license. We will continue to monitor forthcoming treasury guidance closely.

Separately, the Department of Justice has announced a new administrative rule-making process following the withdrawal of the prior proceeding initiated in 2024 to consider the broader rescheduling of cannabis under the Controlled Substances Act. We plan to initiate the DEA registration process in the near term as the application portal opened on April 29, and we expect to progress through the federal registration process thereafter. DEA registration represents a major milestone for the state-regulated medical cannabis operators across the country. While additional clarity is still needed around implementation, we are excited about what this development means for Jushi and for the broader industry. Over time, we believe rescheduling has the potential to enhance profitability, lower cost to customers and patients and create a more normalized operating and financial environment for state-licensed cannabis operators.

Beyond our financial performance, we recently announced our intention to pursue a proposed redomiciling of our parent entity from British Columbia, Canada to the state of Nevada in the United States as part of our ongoing efforts to optimize our corporate structure. We believe this better aligns our corporate structure with our existing operations. Over time, this initiative is intended to enhance our long-term strategic flexibility and support potential capital markets opportunities. As we previously announced during the first quarter, we completed our refinancing through the issuance of $160 million first lien senior secured term loan issued at a 4% original issue discount with a 12.5% coupon structured as interest-only payments over a 36-month term.

The proceeds were used to fully repay our previous first and second lien debt, including accrued interest and related fees with excess cash proceeds used to strengthen our balance sheet. The transaction was completed with the participation from a syndicate of lenders, including our 2 largest shareholders, myself included. As part of the refinancing, I contributed additional capital, increasing my overall position relative to my prior participation in the first and second lien debt, reflecting my continued confidence in the strength of our business and our long-term strategy. It is important to note that the refinancing was completed without issuing any warrants or equity-linked securities, resulting in no dilution to shareholders. The new facility provided $13.7 million of incremental liquidity, and we ended the quarter with approximately $42 million of total cash.

Additionally, the new facility includes only a single financial covenant requiring the maintenance of a minimum liquidity, which we believe provides meaningful flexibility going forward. Overall, we believe this transaction strengthens our balance sheet, enhances financial flexibility and positions the company to support future growth initiatives. From an operational standpoint, we are continuing to deploy targeted high-return investments across our facilities in Virginia, Pennsylvania and Ohio to meet current demand and position the business for future growth, consistent with what we outlined last quarter. These investments are being sequenced carefully and remain tied to regulatory clarity and cost of capital considerations. Turning to retail.

We ended the quarter with 42 stores across our footprint, following the opening of a new location in Springdale, Ohio during the quarter. Also during the quarter, we entered into an agreement to sell our Peoria, Illinois location, subject to regulatory approval. This store is no longer in our operating results as it is being operated under an MSA with the prospective purchaser while the parties await regulatory approval for the ownership transfer. As we outlined on our last earnings call, we are actively evaluating 4 to 5 potential store relocations to improve our profitability, and we continue to assess retail license and store acquisition opportunities in Ohio, Massachusetts, New Jersey and other states to further optimize our footprint and drive productivity.

We were also encouraged by our performance around the 4/20 holiday, where the retail portfolio delivered year-over-year growth across net sales, units and orders, both on a total and same-store basis. The performance was driven by strong results in the Ohio and Virginia markets, partially offset by more competitive dynamics in Illinois, Massachusetts and Pennsylvania. On the regulatory front, there were several notable developments during the quarter and post quarter end. In Virginia, the General Assembly passed adult use legislation during the session, which was subsequently amended by the governor and sent back to the legislature. The proposed changes including adjustments to the timing of retail sales as well as modifications to certain regulatory enforcement provisions.

The General Assembly has rejected the governor’s amendments and the bill has now been returned to the governor. Under Virginia law, the governor has until May 23 to sign the bill, veto the bill or let the bill become law. The governor cannot further amend the bill. Additionally, while not typical, there remains a possibility that adult-use legislation could be addressed as part of the state budgetary process. Separately in Virginia, legislation has been enacted into law to strengthen enforcement across hemp and cannabis products, including SB 543, which enhances the state’s ability to regulate noncompliant hemp-derived products. Additional measures have also been passed to update penalties related to unlawful cannabis activities. We believe these steps are intended to support a more consistent and regulated marketplace over time.

In Massachusetts, legislation was passed during the quarter to modernize the state’s cannabis regulatory framework, which has been signed by the governor and has become law. Among other changes, the legislation increases the retail license cap, allowing operators to own up to 6 retail locations, up from the prior limit of 3. We believe this change could support greater scale and operating efficiency over time while also creating additional opportunities for consolidation across the market. In Pennsylvania, SB 49 continues to move through the legislative process. The bill would establish a new cannabis control board to oversee both cannabis and hemp, creating a more unified regulatory framework. In addition, recent amendments align Pennsylvania’s hemp regulations with updated federal standards, tightening definitions and strengthening enforcement across hemp-derived products.

In Ohio, new legislation restricting the sale of intoxicating hemp-derived products became effective in March, effectively limiting these products to licensed dispensaries. The law is intended to close existing regulatory gaps and direct THC-containing products into the regulated cannabis market. Enforcement is expected to be carried out by both state and federal agencies over time, which we believe could support a more balanced competitive environment. At the federal level, legislation has been enacted to address the Farm Bill loophole with changes scheduled to take effect in November 2026. Discussions also continue around broader legislative initiatives such as the CLIMB Act, though timing and outcomes remain uncertain. With that, I will turn the call over to Michelle for a detailed review of our financial results.

Michelle Mosier: Thank you, Jim, and good afternoon, everyone. Revenue for the first quarter of 2026 increased $2.6 million to $66.4 million compared to $63.8 million in the prior year quarter. Revenue in our retail channel was $57.9 million compared to $56.8 million in the first quarter of 2025. The increase was primarily due to growth in Ohio and Virginia. In Ohio, retail revenue increased $4.4 million due to the addition of 4 new dispensaries since the first quarter of 2025. Retail revenue in Virginia grew by approximately $700,000, driven by strong same-store sales performance across our 6-store network. These increases were partially offset by the ongoing impact of competitive pricing pressure across various markets. Our continued focus on retail execution and customer engagement supported strong performance in Jushi branded product sales, which represented approximately 58% of retail revenue across the company’s 5 vertical markets in the quarter, our highest level to date compared to 56% in the prior year.

Our delivery business in Virginia continues to perform well, both within our health services area and outside our HSA. For the quarter, delivery sales increased approximately 11% year-over-year within our HSA area, driven by higher basket sizes and increased units per transaction. Outside our HSA, delivery sales increased approximately 46% year-over-year, driven by a 31% increase in delivery orders, along with higher basket sizes and units. Wholesale revenue was $8.6 million compared to $7 million in the comparable quarter of the prior year. The year-over-year increase was primarily attributable to higher wholesale revenue in Massachusetts, driven by increased bulk sales, expanded wholesale distribution, including placement in new dispensaries and higher production volumes that supported greater product availability.

Growth in Massachusetts also reflected limited product availability in the prior year period when the company prioritized supplying its retail stores. Additionally, increased production capacity in Ohio contributed to higher revenue. These increases were partially offset by lower revenue in Virginia due to reduced demand from wholesale partners. Gross profit was $29.9 million or 45% of revenue compared to $25.8 million or 40.4% of revenue in the prior year quarter. The year-over-year increase in gross profit and gross profit margin was driven by higher production volumes, improved product quality and stronger performance at our grower-processor facilities, particularly in Ohio, Massachusetts and Pennsylvania. Higher gross profit also reflected the benefit of new dispensary openings since Q1 2025 in Ohio.

These benefits were partially offset by continued pricing pressure and increased promotional activity across our retail footprint. Operating expenses for the first quarter were $28.3 million compared to $27.6 million in the last year’s first quarter. The modest year-over-year increase was primarily due to higher employee costs resulting from expanded operations, including the new store openings. Also contributing to the increase were higher professional and legal fees and higher share-based compensation expense as the prior year quarter included higher forfeitures. These increases were partially offset by a reclassification of certain depreciation expenses to cost of goods sold. Other income and expense for the first quarter of 2026 included interest expense of $10.4 million and a $5 million loss on debt related to the refinancing of the 2024 term loan and the second lien notes, partially offset by a $2.3 million fair value gain on derivatives.

The net loss for the first quarter was $19.8 million compared to $17 million in the prior year. Adjusted EBITDA was $11.4 million compared to $9.8 million in the prior year period, and adjusted EBITDA margin was 17.2% compared to 15.4%. As Jim noted, the year-over-year improvement reflects strong underlying operating performance. Additionally, the prior year period included $2.8 million of employee retention credits. Cash flows from operations for the quarter were $8.6 million compared to $7.5 million in the prior year quarter. The increase was primarily driven by improved operating results and was partially offset by lower cash flows provided by working capital changes. Turning to the balance sheet. We ended the quarter with approximately $42.3 million of cash, cash equivalents and restricted cash, reflecting the impact of our refinancing.

As of March 31, we had $222.1 million of debt subject to repayment, excluding the $21.5 million of promissory notes issued to Sammartino that remain in dispute and excluding leases and property, plant and equipment financing obligations. During the first quarter of 2026, we paid $3 million for capital expenditures. For the full year, we expect maintenance CapEx to be approximately $4 million to $5 million. Excluding capital associated with potential regulatory changes, we currently expect 2026 [ growth ] CapEx to be in the range of $5 million to $8 million, resulted in total projected capital expenditures of $9 million to $13 million. As we have discussed, regulatory developments, particularly in Virginia, will influence the timing and scale of future capital investments.

In Virginia, we are developing plans for grower-processor expansion contingent on adult use. We believe a significant portion of any such expansion could be financed through an expanded mortgage facility, and we would expect the majority of construction-related capital spending to occur in 2027 rather than 2026. And with that, I will turn the call back to Jim for closing remarks.

James Cacioppo: Thank you, Michelle. As we reflect on the first quarter, our results demonstrate continued progress in executing our strategy. We delivered year-over-year revenue growth and meaningful margin expansion, driven by improvements in operational performance, product quality and disciplined execution across the business. We remain focused on strengthening our core operations, optimizing our retail footprint and continuing to build out our branded product portfolio. At the same time, we are maintaining a disciplined approach to capital allocation and positioning the business to capitalize on future regulatory opportunities. The recent federal rescheduling development represents a significant milestone for the industry, and we are encouraged by the potential implications for Jushi in the future.

While we look forward to additional clarity around implementation, we believe this progress supports a more favorable long-term operating environment for state-licensed operators. Looking ahead, our priorities remain consistent. We will continue to focus on execution, operational excellence and prudent financial management while preparing the organization for potential growth opportunities across our key markets. I would like to thank our employees for their continued dedication and hard work as well as our shareholders for their ongoing support. Operator, please open the call to questions.

Operator: [Operator Instructions] Our first question comes from Frederico Gomes with ATB Capital Markets.

Q&A Session

Frederico Yokota Gomes: First question on Virginia. If the bill there becomes law, can you refresh us, what does that entail in terms of the start of adult use sales, retail expansion as well as, I guess, the advantage that current medical operators like Jushi have relative to potential new entrants?

James Cacioppo: Goes into effect on January 1, 2027. So there’ll be — they’re adding licenses for new stores, [ a couple few hundred ]. But by that time, you would think there would be none because they’d have to go through the licensure process. And so it would be the medical operators who would get to flip into adult use. So we have our 6 stores. As a reminder, you followed the company for a long time, but they’re all designed. For adult use, they have a lot of POS stations and very large parking lots and large footprint. We thought this would happen a couple of years ago when we signed these leases, we sort of got what we would call superstore locations in the anticipation of only having 6. So for us, the expansion of sales comes from generating more sales from existing stores.

And to that end, we’re expanding our cultivation facility in the warehouse. We brought a new room on last year. We had 5 rooms at the beginning of 2025. We added a room towards the end of 2025, and we were adding another room this month. We’re planting it this month. So that brings that 7 from 5, and then we’re bringing on the eighth room towards the end of the year. And if we could get it sooner, we would, and we might be able to, but sort of think of it in the fourth quarter or it could be in January. And so we’ll have added a substantial amount of capacity internally at Jushi. We believe one of the other large MSOs is adding a lot of capacity where they have existing rooms that they haven’t used and they’re turning them on. So there could be ability for us to buy product from that large MSO.

And then they are also offering us second licenses, which we will look to do sort of a greenhouse, and we may be able to get that on if we get news quickly to at least try get a grow in — a one grow in this year. So we have the ability to expand our cultivation in multiple ways. And then we’re also undergoing a large construction project. Our bank is being helpful, and we think we’ll get them to step up for a part of the cost of that. And we have excess cash, as you know, on our balance sheet and cash flow from operations. And so we’re funding a large build-out of a new warehouse that I’m looking at Jon, roughly doubles our production. Yes, roughly doubles our full 8 rooms that we have. It roughly doubles that. And that’s — it’s all cultivation space.

I mean just about all cultivation space. The processing is done in the current facility. So we’re leveraging existing capital that we already put in the ground. So it should be margin accretive as we drive production numbers up — cultivation numbers up.

Frederico Yokota Gomes: Great. And I guess second question, just you mentioned that pricing pressures remain a factor across markets. Obviously a trend that we see in the industry. Do you think that rescheduling changes any of that? Or just curious how rescheduling could impact the competitive dynamics in terms of M&A, price competition, et cetera?

James Cacioppo: Yes. I mean — so our margins, we’re like a heavily medical company. And so we haven’t had a highly vertical large state like an Illinois or Florida, which is medical, but it’s highly vertical and has higher margins because you can only sell vertical. So we don’t have that. So our margins — there are some companies that are virtually all adult use in markets that they can have pretty high margins in like New Jersey and Maryland as examples and other ones. So we’re largely medical. But if you look at the people who are more diversified into adult use, which we will be if Virginia goes and then Pennsylvania, the margins have been sort of in the 20s to 30s, mid-20s to mid-30s if you just take out the outliers on different quarters.

And to me — on an EBITDA basis, to me, those are pretty good margins. And I think if you look at across different industries, I think people look at sort of the margins at the beginning of a market when price — the supply can be very limited, and they assume that, that could go on forever. So I think you saw that a great example, the best example is probably Illinois, where they were very constrained. It was one of the first markets to go, a very large market. And so you have this natural sort of rationalization of margins into what you would more expect for a business like that. So overall, as an investor, I look at the business as a pretty good margin business. And for Jushi, we’re going to be growing our margins as we go to adult use and expand facilities and get more production and more out of our existing assets, both in Pennsylvania and in Virginia in particular.

We’re also going to verticalize in Ohio. So that’s the way I look at it. To answer your question specifically about rescheduling, yes, I would — I don’t think rescheduling really changes the dynamics. I think it’s the hemp — the closure of the loophole in the hemp bill, which you’re starting to see flow through our numbers. We can’t sort of definitely identify it as, hey — but in Ohio, it went into effect in March because they passed legislation for it to go in effect and it finally went into effect in March, what is happening countrywide in November. And we saw tremendous growth year-over-year. So March year-over-year was about 10% growth in Ohio. Remember, we’re adding stores and we’re adding production. And April for us year-over-year in Ohio was 26% growth.

So we think some of that, if not a lot of that, had to do with the hemp closure in Ohio. I mean, I think, one of the CEOs of the large MSO said it’s the largest competitor is — we know the large competitor is illegal market, but the largest segment of the illegal market has been this hemp business coming through the smoke shops, unregulated, untested. They don’t have the 280E tax problem, all the things that hamper us. So it wasn’t intended and they’ve taken it away. And I think the people in the hemp business have held on that, “Hey, we’re going to get this change, we’re going to get this change.” And I think finally, people are realizing that hemp goes away in November, if not sooner, depending upon states stepping up and accelerating it.

Operator: Our next question comes from Kenric Tyghe with Canaccord Genuity.

Kenric Tyghe: Jim, just a follow-up on the rescheduling piece of this. So some of your competitors have looked to the optionality and flexibility that rescheduling would provide as an opportunity to go deeper domestically. Others are seeing it as the beginning of an opportunity or the start of a potential export market and to push into Europe. Can you sort of frame up your thinking around the opportunity and whether you believe it will be a better use of your capital at this point to build out domestically than to join into the sort of the rush to export?

James Cacioppo: Yes. So I’m not — I was surprised to have seen that, the export. I was very surprised to have seen that. I am an investor in the industry away from Jushi because I cannot buy Jushi anymore. And as an investor with One East, and I think that One East might be one of the larger investors in cannabis securities, I don’t know, top 10, 20 or something like that. I would give that 0 relevance into my investment philosophy. So that’s just aside from me being CEO of Jushi. In terms of Jushi, how we think of it, we are unique company right now in the ecosystem of public cannabis companies that are alive and well and kicking. We have 2 states. Our 2 most important states, we think that will go adult use in the next 12 or 24 months.

It could be sooner, right, with Virginia being in January. So — and it’s — and we have investment opportunities in those states. So don’t take this number to be a projection or anything other, but we have tens of millions of dollars, over $50 million unlevered, right? We can get some debt on to this, but it could be $60 million, $65 million, $70 million in our own business to grow our business based upon regulatory change in Virginia and Pennsylvania. And on top of that, we have Ohio, where we own our grower facility, and it has the ability to expand. We have drawings for the expansion getting finalized, which will help our margins and sales by growing the grower processor in Ohio. The — so we’re investing capital and the multiples that we’re obtaining like if it were M&A, you would say, well, what multiple are you buying that business for, right?

3x, 5x, 6x EBITDA. We think we’re investing at 1 to 2x EBITDA in terms of the capital we’re putting to work and the returns we’re getting. And obviously, in a rescheduled environment where we’re not paying 280E taxes or we don’t have a liability for 280E taxes on our balance sheet, that’s very, very attractive. So for Jushi, we have nowhere else to go to our cash within our own states and we have plenty of it, more than we can do right now based upon our balance sheet and our free cash flow. The virtuous cycle starts when Virginia — if Virginia goes rec as we hope it does in January, then we start generating some very significant free cash flow, operating cash flow, which we’ll put to work to accelerate this investment program in states like Pennsylvania and Ohio.

So we’re planning as if that happens, and we’re going to hit the market very hard. And we’re looking to have all these investments substantially complete by the beginning of ’28, so we get a full year in 2028 of all this capital. That would be a fantastic scenario, but that’s how we’re doing our capital allocation at Jushi. And on top of that, we have investment opportunities in our footprint in every other state. So for example, in Massachusetts, they’ve changed the law where you could now own 6 dispensaries. We have excess production coming out of our grower-processor. So it would be a very nice verticalization opportunity for us to expand from 2 to 6 stores. That is not something we can do with our capital resources right now. So it’s low on the list because the return on investment will be lower than investing in these capital projects in our grower-processors in the states that are going to adult use.

So I hate to take such a long answer to answer your question, but that’s where we have so much investment opportunity that’s going to grow our revenues and EBITDA, I think, the fastest clip by far in the industry if things fall our way from a regulatory standpoint.

Kenric Tyghe: Segue to Pennsylvania and that being the other key state expected to turn adult use. How are you thinking about one of your competitors recently was able to add to their stores in terms of flexibility around the cap under an MSA? How are you thinking about if you have to decide on allocating dollars — additional dollars across Pennsylvania, Virginia? You’ve already spoke to Ohio and Massachusetts. But how do you think about the capital allocation between Pennsylvania and Virginia? And where would you concentrate that in Pennsylvania? Do you think that you would look to sort of accelerate the build-out there? How would you think of approaching and what do you think you need in Pennsylvania in an adult-use world that you would — the need to have the nice to have in Pennsylvania to compete?

James Cacioppo: Yes. I mean — so we have 3 major investment in 3 different states, right? We have investment programs. Number one is Virginia. Why is Virginia #1? Because we’re at the beginning of the program, and we’re going to get the higher margins based on the higher prices for the longest. So it’s very simple math. And the market will grow the biggest amount. So Virginia is #1 for our investment dollars. Number two and number — 2a and 2b, I’m not going to tell you what, is Pennsylvania and Ohio. So they’re both equal in my view. Now Ohio, we’re going to — we will be the first one to happen if Pennsylvania doesn’t go rec. If Pennsylvania does go rec, we believe it will be a very quick start because that’s what the regulators want.

They want the tax dollars. The current bills that have been bandied about in the legislature has started the program within 90 days. So we’ve already moved our facilities forward to the point where in Pennsylvania, where we can hit that capital really hard and hopefully get it started very, very quick. So for example, we’ve moved people out of the grow facility into a neighboring building who are the administrators. So everything in the current warehouse that’s regulated has — we’ll be able to go rec, which adds about 35% to our grow. And given the increase in sales in our current retail system, we don’t need to add to our retail stores. We’ll just be able to sell a lot more in our retail stores of what we’re producing, which will drive our margins and sales in Pennsylvania.

So that we hope to have ready to go as soon as it goes rec. And we hope it goes rec this summer, maybe not to start, but to approve. And then in terms of Ohio, Ohio, we’re verticalizing. And we — right now, our total sell-through for the Jushi product in our whole vertical market is in the 50%. It’s like 57% or something. But for most states, it’s like in the mid-60s to high 60s or even the 70% Jushi products selling through our own dispensaries. Ohio is only 30%. So when we verticalize in Ohio, we have existing sales that are growing because we added a lot of retail in the last year, which we haven’t even comped 1 year in those stores. So they’re all growing. And so we have a lot of sales of our own sales to get up to 60%, 70% of sales of Jushi products.

It’s a great investment project. And so that will either go before Pennsylvania or after Pennsylvania or likely right at the same time of Pennsylvania, if Virginia happens first on January 1. I hope that helps. I mean we’re in a very unique position.

Operator: Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Jim Cacioppo, Founder, CEO and Chairman of the Board, for closing comments.

James Cacioppo: Great. Well, thank you for joining us. And hopefully, next time we talk, Virginia will be signed into law. Thank you. Bye-bye.

Operator: Ladies and gentlemen, the conference call of Jushi Holdings Inc. has now concluded. Thank you for your participation. You may now disconnect your lines.