10-Q: Jushi Holdings Q3 2025: Revenue Up, Net Loss Widens

Jushi Holdings Inc. reported increased Q3 2025 revenue driven by retail growth in Ohio and Virginia, but faced a wider net loss and significant debt maturities.

Summary

• Net revenue for the three months ended September 30, 2025, increased by 7% to $65.679 million from $61.611 million in the prior year.
• Net revenue for the nine months ended September 30, 2025, increased by 2% to $194.571 million from $191.665 million in the prior year.
• Net loss for the three months ended September 30, 2025, widened to $(23.689) million from $(16.016) million in the prior year.
• Net loss for the nine months ended September 30, 2025, widened to $(53.035) million from $(36.309) million in the prior year.
• Gross profit margin for the three months ended September 30, 2025, increased to 47% from 45%, driven by higher production volumes and improved product quality.
• Gross profit margin for the nine months ended September 30, 2025, decreased to 44% from 48% due to competitive pricing pressure and higher discounting.
• Adjusted EBITDA for the three months ended September 30, 2025, increased by 24% to $12.793 million from $10.345 million in the prior year.
• Adjusted EBITDA for the nine months ended September 30, 2025, decreased by 5% to $36.335 million from $38.172 million in the prior year.
• Cash, cash equivalents, and restricted cash totaled $26.159 million as of September 30, 2025.
• Total debt, net, was $204.577 million as of September 30, 2025, with $48.886 million classified as current.
• Term Loans with a principal balance of $47.288 million are scheduled to mature within the next twelve months, raising substantial doubt about the company's ability to continue as a going concern without refinancing.
• The company acquired four dispensary licenses in Ohio during the nine months ended September 30, 2025.
• Sold certain Employee Retention Credit (ERC) claims for $5.081 million in net cash proceeds in February 2025.
• Received $7.621 million related to employee retention credit claims, including interest, from the IRS during the nine months ended September 30, 2025.
• Sold assets relating to one Nevada dispensary in May 2025 for a net gain of $2.243 million.
• Modified the Manassas Mortgage in September 2025, increasing the principal by $4.000 million and extending its maturity to September 2030.

Sentiment

Score: 3

Explanation: While Q3 revenue and Adjusted EBITDA showed some growth, the significant widening of net losses, declining nine-month Adjusted EBITDA, substantial increase in current debt, and the explicit mention of 'substantial doubt about the company's ability to continue as a going concern' due to upcoming debt maturities indicate a precarious financial position. The reliance on future refinancing and potential capital raises highlights ongoing financial strain despite some operational improvements.

Positives

• Net revenue for the three months ended September 30, 2025, increased by 7% to $65.679 million.
• Retail revenue increased by $3.882 million in Ohio and $1.519 million in Virginia for the three months ended September 30, 2025.
• Gross profit margin for the three months ended September 30, 2025, increased to 47% from 45%, driven by higher production volumes, improved product quality, and stronger performance at grower-processor facilities.
• Adjusted EBITDA for the three months ended September 30, 2025, increased by 24% to $12.793 million.
• Successfully acquired four dispensary licenses in Ohio during the nine months ended September 30, 2025.
• Enhanced liquidity by factoring certain Employee Retention Credit (ERC) claims, generating $5.081 million in net cash proceeds.
• Received $7.621 million related to ERC claims, including interest, from the IRS during the nine months ended September 30, 2025.
• Realized a net gain of $2.243 million from the sale of a non-core asset (Nevada dispensary) in May 2025.
• Extended the maturity date of the Manassas Mortgage to September 2030 and lowered its interest rate floor to 7.50%.

Negatives

• Net loss for the three months ended September 30, 2025, widened to $(23.689) million from $(16.016) million in the prior year.
• Net loss for the nine months ended September 30, 2025, widened to $(53.035) million from $(36.309) million in the prior year.
• Gross profit margin for the nine months ended September 30, 2025, decreased to 44% from 48% due to competitive pricing pressure and higher discounting.
• Adjusted EBITDA for the nine months ended September 30, 2025, decreased by 5% to $36.335 million.
• The current portion of debt increased significantly to $48.886 million as of September 30, 2025, from $2.758 million as of December 31, 2024.
• Interest expense, net, increased by 9% for both the three and nine months ended September 30, 2025.
• Recorded a fair value loss on derivatives of $6.325 million in Q3 2025 and $5.875 million for the nine months, primarily due to stock price movement.
• Experienced declines in sales in Illinois ($851 thousand in Q3, $4.434 million in 9M), Nevada ($531 thousand in Q3, $2.050 million in 9M), and Massachusetts ($982 thousand in Q3, $3.042 million in 9M) due to competition and price compression.
• Wholesale revenue decreased by $2.350 million for the nine months ended September 30, 2025, primarily in Virginia and Massachusetts.
• Net cash flows provided by operating activities decreased to $11.674 million from $14.415 million for the nine months ended September 30, 2025.
• The upcoming maturity of Term Loans with a principal balance of $47.288 million raises substantial doubt about the company's ability to continue as a going concern without refinancing.
• High effective income tax rates of 59.4% for Q3 2025 and 109.6% for the nine months ended September 30, 2025, due in part to Internal Revenue Code Section 280E and uncertain tax positions.

Risks

• The company's ability to continue as a going concern is in substantial doubt without refinancing its Term Loans maturing in September 2026.
• Limited operating history of both the cannabis industry and the company itself.
• Risks associated with managing growth, including potential future impairment of goodwill or intangibles acquired and post-closing disputes from acquisitions or dispositions.
• Risks related to the continued performance, expansion, and optimization of existing operations in California, Illinois, Massachusetts, Nevada, Ohio, Pennsylvania, and Virginia.
• Anticipated openings or relocations of additional dispensaries are subject to licensing approval.
• The company has a history of operating losses and negative operating cash flows.
• Increasing competition and pricing pressures in the cannabis industry, which can be market-specific and caused by oversupply.
• Risks inherent in an agricultural business, such as the effects of natural disasters.
• Reliance on the expertise and judgment of senior management.
• Risks associated with cannabis products manufactured for human consumption, including potential product recalls.
• Limited research and data relating to cannabis.
• Constraints on marketing cannabis products.
• Risk of litigation, including the MJs Market, Sammartino, and Pacific Collective matters.
• Insurance-related risks specific to the cannabis industry.
• Public opinion and perception of the cannabis industry can adversely affect business.
• General economic risks, including inflation, rising cost of capital, and stock market instability.
• Potential for fraudulent activity by employees, contractors, and consultants.
• Risks relating to the company's current amount of indebtedness.
• Reliance on key inputs, suppliers, skilled labor, and third-party service provider contracts.
• Risks of supply shortages or supply chain disruptions.
• Risks relating to pandemics and forces of nature.
• Risks related to the enforceability of contracts in the cannabis industry.
• Risks relating to the U.S. regulatory landscape and enforcement related to cannabis, including political risks and potential changes in federal policy.
• Risks relating to anti-money laundering laws and regulation.
• Cannabis-related tax risks and challenges from governmental authorities with respect to Internal Revenue Code Section 280E and Employee Retention Tax Credits (ERC).
• Other governmental and environmental regulations affecting operations.
• Risks related to proprietary intellectual property and potential infringement by third parties.
• Sales of a significant amount of shares by existing shareholders could impact stock price.
• The limited market for the company's securities.
• Risks relating to the need to raise additional capital either through debt or equity financing, with no assurance of favorable terms.
• Costs associated with 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.
• Risks related to the company's critical accounting policies and estimates.

Future Outlook

The company believes its existing cash and cash equivalents, cash from operations, and proceeds from refinancing will be sufficient to meet working capital and capital expenditure needs for at least the next twelve months. It may pursue additional opportunistic capital raising or refinancing transactions. In the longer term, beyond twelve months, additional equity financing or other debt refinancing transactions may be needed, though there can be no assurances that such financing will be obtained on favorable terms, if at all.

Management Comments

• Management believes the company is in material compliance with applicable local and state regulations as of September 30, 2025.
• Management believes the company has substantial defenses and is vigorously defending against the MJs Market complaint.
• Management believes the company lawfully rescinded the lease in the Pacific Collective matter and that no damages are owed.
• Management believes that the company's plan to refinance before maturity and its consistent history of successful refinancing have alleviated substantial doubt about its ability to continue as a going concern.

Industry Context

The cannabis industry is characterized by significant competition and pricing pressures, often market-specific and influenced by oversupply. The company operates in limited license medical markets transitioning to adult-use (Pennsylvania, Virginia) and fast-growing adult-use markets (Illinois, Nevada, Massachusetts, Ohio, California). The federal illegality of cannabis continues to pose risks, including potential asset forfeiture and challenges related to tax regulations like Section 280E.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or global benchmarks to assess the results in the context of industry standards.

Corporate Governance

Legal Proceedings

• **MJs Market Matter**: A complaint filed on March 31, 2023, alleging violations of antitrust and consumer protection acts, as well as interference with contractual relations and abuse of process. The court denied the defendants' motion to dismiss on February 5, 2025, and parties are currently in discovery.
• **Sammartino Matter**: On February 28, 2023, the company informed Sammartino of breaches of the Merger and Membership Interest Purchase Agreement (MIPA) and fraudulent inducement, electing to offset damages against promissory notes and shares. Sammartino responded with allegations of procedural deficiencies and default by the company on March 13 and March 21, 2023, which the company disputed on March 23, 2023.
• **Pacific Collective Matter**: A complaint filed on October 24, 2022, alleging breach of a commercial property lease and lease guaranty, seeking over $20 million in damages. A referee ruled in favor of the company's subsidiaries, but Pacific Collective filed an appeal on July 3, 2024.

Related Party Transactions

• Interest expense and principal amounts related to 12% Second Lien Notes include amounts from the company's Chief Executive Officer and a significant investor. In February 2025, an entity affiliated with the CEO purchased US$3.719 million principal, and a significant investor purchased C$2.000 million principal, both receiving warrants.
• Interest expense and principal amounts related to Term Loans include amounts from the company's Chief Executive Officer ($9.000 million principal) and a significant investor ($7.000 million principal) who participated as lenders in July 2024 and received warrants.

Stakeholder Impact

• **Shareholders**: Potential for dilution from future equity financing; impact of widening net losses and stock price volatility on derivative warrants; significant share price influence due to financial performance and going concern doubt.
• **Creditors**: High current debt portion and upcoming Term Loan maturity raise concerns about repayment capacity, necessitating refinancing efforts.
• **Employees**: Share-based compensation is a component of overall compensation; potential impact of operational changes or financial distress on employment.
• **Customers**: Impact of competitive pricing pressures and promotions on product availability and pricing in various markets.
• **Suppliers**: Potential impact from supply chain disruptions or changes in operational scale and financial stability.

Next Steps

• Refinance Term Loans maturing in September 2026 to address going concern doubt.
• Fulfill certain conditions associated with ongoing construction at the Manassas, Virginia facility using restricted funds.
• Continue to evaluate the effect of new FASB pronouncements (ASU 2024-03, ASU 2025-01, ASU 2025-03, ASU 2025-05) on consolidated financial statements and disclosures.
• Vigorously defend against the MJs Market, Sammartino, and Pacific Collective legal proceedings.
• Potentially engage in additional opportunistic capital raising or refinancing transactions.

Key Dates

Recommendation

The company faces significant financial challenges, including widening net losses, a substantial increase in current debt, and an explicit 'going concern' warning related to upcoming debt maturities. While Q3 revenue and Adjusted EBITDA showed some growth, the overall nine-month performance and the precarious liquidity position, coupled with ongoing legal proceedings and competitive pressures, indicate high risk. The reliance on future capital raises and refinancing, with no assurance of favorable terms, suggests a challenging outlook for investors.

Keywords

Cannabis, Multi-state operator, MSO, Retail cannabis, Cultivation, Processing, Dispensary, Medical marijuana, Adult-use cannabis, SEC filing, 10-Q, Financial results, Jushi Holdings, JUSH, JUSHF, Ohio, Virginia, Pennsylvania, Illinois, Massachusetts, Nevada, California, Debt, Liquidity, Adjusted EBITDA, Revenue, Net loss, Section 280E, Employee Retention Credit