SCHEDULE 13D/A: Jushi Holdings CEO James Cacioppo and Affiliates Boost Stake to 19.9% Through Options and Warrants

James A. Cacioppo, CEO of Jushi Holdings Inc., and affiliated entities have significantly increased their beneficial ownership in the company to 19.9% through the exercise of stock options and warrants.

Summary

• James A. Cacioppo, the Chief Executive Officer and a Board Director of Jushi Holdings Inc., along with several affiliated entities, collectively beneficially own 46,008,936 Subordinate Voting Shares, representing 19.9% of the class.
• This aggregate ownership includes 9,755,232 shares from stock options and 6,270,221 shares from warrants that Mr. Cacioppo has the right to acquire within 60 days from March 10, 2025.
• The calculation of the percentage of class is based on 196,696,597 Subordinate Voting Shares outstanding as of February 28, 2025, as reported in the Issuer's Annual Report on Form 10-K filed on March 6, 2025, plus additional shares from exercisable options and warrants.
• Other reporting persons, including OEP Opportunities, L.P., One East Capital Advisors, LP, One East Partners L.P., ST 2 LLC, Serpentine Capital Management II, LLC, and Serpentine Capital Management III LLC, also hold significant beneficial interests, primarily through warrants.
• Serpentine Capital Management III LLC acquired warrants for 5,810,938 Subordinate Voting Shares and purchased US$3,719,000 principal amount of the Issuer's 12% Second Lien Notes due 2026 on February 25, 2025.
• The warrants issued to Serpentine Capital Management III LLC were at 75% coverage with an exercise price per share equal to a 50% premium to the volume weighted average price, with a floor of US$0.45 and a ceiling of US$0.50.

Sentiment

Score: 8

Explanation: The sentiment is positive due to the significant increase in beneficial ownership by the CEO and affiliated entities, indicating strong insider confidence and a long-term investment perspective. The purchase of additional notes also shows continued financial support.

Positives

• Increased beneficial ownership by CEO James Cacioppo and affiliated entities to 19.9% signals strong confidence in the company's future.
• The acquisition of additional warrants and options by key insiders and related investment funds indicates a long-term commitment and belief in potential upside.
• The purchase of US$3,719,000 in 12% Second Lien Notes by Serpentine Capital Management III LLC demonstrates continued financial support for the Issuer.

Risks

• The Reporting Persons' investment strategy is subject to market price changes, changes in the Issuer's operations, business strategy, or prospects, and broader market conditions.
• The value of the options and warrants is dependent on the future share price of Jushi Holdings Inc., and there is no guarantee of profitability upon exercise or sale.
• The exercise price of the warrants issued to Serpentine Capital Management III LLC is tied to the volume weighted average price, which introduces variability, although with defined floor and ceiling prices.

Future Outlook

The Reporting Persons acquired the shares, options, and warrants for investment purposes and may further purchase, hold, vote, trade, dispose, or otherwise deal in these securities. They routinely monitor the Issuer's operations, prospects, business development, management, competitive and strategic matters, capital structure, and prevailing market conditions. They reserve the right to formulate other plans, propose changes in the Issuer's operations, governance, or capitalization, or acquire/dispose of additional securities.

Management Comments

• James Cacioppo, as Chief Executive Officer and a member of the Board of Directors of Jushi Holdings Inc., is subject to limitations regarding his ability to trade or propose changes to the Issuer.

Industry Context

This Schedule 13D filing reflects a significant insider stake increase in Jushi Holdings Inc., a company operating in the cannabis industry. Such an increase by the CEO and affiliated investment entities can be interpreted as a strong vote of confidence in the company's strategy and future prospects within a dynamic and evolving regulatory and market landscape. It suggests that key stakeholders believe the company is well-positioned to capitalize on industry trends or overcome challenges.

Comparison to Industry Standards

• This document primarily details changes in beneficial ownership by an insider group, rather than company performance metrics, making direct comparisons to industry financial standards or specific competitor results not applicable within the scope of this filing.
• However, a 19.9% beneficial ownership by a CEO and related entities is a substantial stake, often seen as a positive indicator of alignment between management and shareholder interests, which is generally viewed favorably across industries, including the cannabis sector.
• The structure of warrant and option grants, particularly those tied to employment agreements and credit facilities, is a common practice in various industries to incentivize management and secure financing, though the specific terms (e.g., 12% Second Lien Notes, 75% warrant coverage) would require a deeper dive into Jushi's capital structure relative to its peers like Curaleaf Holdings, Green Thumb Industries, or Trulieve Cannabis Corp. to assess competitiveness.

Related Party Transactions

• James Cacioppo, as CEO and Board Member, received grants of options and warrants from the Issuer on multiple dates (December 8, 2022; September 1, 2023; December 17, 2023; September 13, 2024) as part of his compensation and employment agreement amendments.
• Serpentine Capital Management II, LLC and Serpentine Capital Management III LLC, entities managed by James Cacioppo, received warrants from the Issuer (December 8, 2022; July 31, 2024; February 25, 2025) and Serpentine Capital Management III LLC purchased Second Lien Notes from the Issuer.

Stakeholder Impact

• Shareholders: The increased insider ownership may be viewed positively, signaling management's confidence and alignment with shareholder interests, potentially boosting investor confidence.
• Employees: No direct impact mentioned, but a stable and confident leadership team can positively influence employee morale and strategic direction.
• Creditors: The purchase of Second Lien Notes by an affiliated entity provides additional capital to the company, potentially strengthening its financial position and ability to meet obligations.

Next Steps

• The Reporting Persons may further purchase, hold, vote, trade, dispose, or otherwise deal in the Subordinate Voting Shares, Options, and Warrants.
• The Reporting Persons will continue to routinely monitor the Issuer's operations, prospects, business development, management, competitive and strategic matters, capital structure, and prevailing market conditions.
• The Reporting Persons may discuss matters with other officers or directors of the Issuer, other shareholders, industry analysts, existing or potential strategic partners or competitors, investment and financing professionals, sources of credit, and other investors.
• The Reporting Persons reserve the right to formulate other plans and/or make other proposals and take actions with respect to their investment, including proposing changes in the Issuer's operations, governance, or capitalization.

Key Dates

Recommendation

Keywords

Jushi Holdings Inc., Schedule 13D, Beneficial Ownership, James Cacioppo, Subordinate Voting Shares, Stock Options, Warrants, SEC Filing, Investment, Corporate Governance, Cannabis Industry