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Cannabis Summary for Sept. 13, 2021

2021-09-13 20:12 ET - Market Summary

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by Stockwatch Business Reporter

The S&P/TSX Cannabis Index lost 1.06 to 146.70, while the CSE Composite Index added a fraction to 644.87. South of the border, U.S. MSO (multistate operator) Jushi Holdings Inc. (JUSH) edged down three cents to $5.03 on 341,800 shares, despite trumpeting its grand entrance into its seventh state, Massachusetts. It has closed the cash-and-share takeover of Nature's Remedy. The target owns two dispensaries (each within an hour's drive of Boston) and a 50,000-square-foot cultivation facility.

Jim Cacioppo, Jushi's founder, chairman and chief executive officer, cheered the "milestone acquisition" in a video accompanying the announcement. "We are excited to officially enter the Massachusetts market," he declared. Praising the target's "strong, defensible retail position" and "scalable cultivation footprint," he estimated that Nature's Remedy will contribute $34-million (U.S.) to $38-million (U.S.) in EBITDA in 2022.

For context, the total purchase price for Nature's Remedy is $101.2-million (U.S.) -- a decrease from the original price tag of $110-million (U.S.) when the deal was first announced in April, boasted Mr. Cacioppo. He patted Jushi on the back for renegotiating a better price. (Investors did not seem quite as impressed. A look at the numbers shows that while Jushi was able to reduce the equity component of the deal, a major factor in reducing the price tag was the drop in the value of Jushi's stock, which was over $7 in April and is now barely $5. In addition, Jushi is assuming a larger amount of debt.)

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