Battered by falling prices for medical marijuana and competition from the illicit market, Florida-based Jushi Holdings Inc. on Friday reported a loss of $140 million for the three months ending Dec. 31, despite a 17% boost in revenue to $76.8 million for the period.
The Boca Raton company, which operates retail outlets in Allegheny, Cambria and Westmoreland counties, also reported a net loss of $202.3 million for 2022, despite a 36% increase in revenue for the year to $284.3 million, according to unaudited results.
During a call with investors, Jushi CEO and founder Jim Cacioppo blamed the losses on “significant price compression,” operational issues and the overall economy in Pennsylvania and four other states where the company does business.
“Given the challenging macroeconomic backdrop our industry is operating under,” Mr. Cacioppo said in prepared remarks, “I am pleased to report solid annual and quarter top line growth.”
In Pennsylvania, wholesale pot prices fell 30% to $6.65 per gram in March from $9.38 per gram in July 2021, according to the state Health Department. Consumers didn’t pocket much of a savings, with retail prices dipping to $13.40 per gram from $14.53 per gram during the same period — just an 8% reduction.
But consumers in other states were more fortunate. The average per ounce retail price of pot in Massachusetts, for example, fell 40% to $219.43 in December when compared to $359.35 in January 2022, according to the state Cannabis Control Commission.
Vertically integrated companies like Jushi are also facing increased competition from the illicit pot market, Mr. Cacioppo said. Medical cannabis products, produced by California growers, are showing up in illegal marijuana stores in New York City, he said.
Jushi, which has 37 dispensaries in the U.S., including about 10% of Pennsylvania’s retail cannabis market, operates Beyond Hello dispensaries in South Side, Irwin and Johnstown. Buying legal pot in Pennsylvania requires medical clearance from a physician.
As of May, 712,421 patients and 37,221 caregivers were permitted to buy and use medical marijuana since legal sales began in the state in 2018, according to the Department of Health. Adult recreational pot sales have not been approved by the legislature in Pennsylvania.
Faced with the losses, Jushi cut its workforce 17% to 1,310 from 1,570 over the past year, Mr. Cacioppo said. The company was also in the process of shrinking the number of employee hours worked per store by half.
“That’s a huge number,” Mr. Cacioppo said.
Kris B. Mamula: kmamula@post-gazette.com
First Published: March 31, 2023, 6:58 p.m.
Updated: April 1, 2023, 12:57 p.m.
