Jushi Cuts $53M Debt With New $48M Loan, Now Holds Less Than $1M In Short-Term Debt

Vertically integrated cannabis company Jushi Holdings Inc. USH JUSHF refinanced its existing $53 million loan due December 31, 2024, by issuing a new $48.5 million senior secured term loan and using around $7.4 million in cash. The new loan carries an interest rate of 12.25% per year, payable quarterly.

"The refinancing strengthens Jushi's balance sheet by continuing the company's commitment towards deleveraging and secures an attractive cost of capital amidst the current credit environment," stated James Cacioppo, Jushi CEO, chairman and founder. "We were able to attract new institutional lenders to our term loan which is a testament to our operational strength and suite of assets in key high-growth states which we believe will soon realize their full potential."

The term loan amortizes quarterly at the rate of 2.5%, starting one year after issuance and matures within 30 months, or 91 days prior to the maturity of the company's existing second lien notes due Dec. 2026. Investors in the new loan received five-year warrants at 40%, allowing them to buy shares at $1 each. The warrants were offered and sold in a private placement only to accredited investors and qualified institutional buyers.

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Term Loan Highlights

"Following this refinancing and including the early extinguishment of one of our acquisition-related promissory notes in early July, our short-term debt subject to scheduled repayments is less than $1 million as of July 31, 2024," Cacioppo continued. "We remain focused to deliver value to our shareholders and are excited with the regulatory changes that we anticipate on both the state and federal levels. We would also like to thank SunStream Bancorp Inc. for their support in Jushi since its financing of the Existing 1st Lien Credit Facility in October 2021."

As of July 31, following the refinancing, Jushi has about $19 million in cash and has made significant debt payments, leaving less than $1 million in short-term debt.

An entity affiliated with Cacioppo took part in the loan with a principal amount of $9 million and received 3.6 million warrants. Denis Arsenault, founder and significant equity holder of the company, also participated in the refinancing with $7 million and received 2.8 million warrants.

Adjustments were made to Jushi's previous debt agreements to align with the new loan terms, with consents from note holders.

Jushi obtained consent from noteholders of the company's previous debt agreements in order to make necessary aliments with the new loan terms.

Second Quarter 2024 Financial Results

The Florida-based company also announced that it will report its financial results for the second quarter ended June 30, 2024, after the market closes on Wednesday, August 7, 2024.

Management will host a conference call and audio webcast on Wednesday, August 7, 2024, at 4:30 p.m. ET to discuss the company's financial results.

Price Action

Jushi shares traded 1.79% higher at 57 cents per share at the time of writing Thursday morning.

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