Jushi Hldgs Inc Cl B

Good afternoon. My name is Dave, and I will be your conference operator today. At this time, I would like to welcome everyone to Jushi Holdings, Inc.' 's fourth quarter and full year 2025 earnings conference call. Today's call is being recorded. I will now turn the call over to Trent Wolovec, Co-Chief Strategy Director. Thank you.

Please go ahead. Good afternoon and thank you for joining us today on Jushi's fourth quarter and full year 2025 earnings conference call. My name is Trent Wolovec and I am the Co-Chief Strategy Director at Jushi Holdings Inc. With me on today's call are Jim Cassioppo, our Chairman and Chief Executive Officer, Michelle Mosier, our Chief Financial Officer, and John Barrett, our President and Chief Revenue Officer. This call is also being broadcast live over the internet and can be accessed from the investor relations section of the company's website at ir.jushiko.com. In addition to the company's GAAP results, management will provide supplementary results on a non-GAAP basis. Please refer to the press release issued today for a detailed reconciliation of GAAP and non-GAAP results. which can be accessed from the investor relations section of the company's website. Additionally, we would like to remind you that during this conference call, we will make forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance, and business. Although Jushi believes our estimates and assumptions to be reasonable, they are subject to a number of risks and uncertainties beyond our control and may prove to be inaccurate. We caution you that actual results may differ materially from any future performance suggested in the company's forward-looking statements. The risk factors that may affect actual results are detailed in Jushi's Form 10-K and other periodic filings and registration statements, which may be accessed via EDGAR and CEDAR, as well as the investor relations section of our website. These forward looking statements speak only as of the date of this call and Jushi expressly disclaims any obligation to update this forward looking information. I will now turn the call over to Jim.

Thank you, Trent, and thank you, everyone, for joining our call today. This afternoon, I will provide a high-level overview of our performance for the fourth quarter and full year 2025, followed by an update on our recent refinancing. I will then discuss key regulatory developments, including progress toward adult use in Virginia before turning to our operational execution across the business and broader industry dynamics. I will conclude with the review of the regulatory landscape across our key markets before turning the call over to Michelle for a detailed financial review. Beginning with our financial results, revenue for the fourth quarter was $68.3 million, representing year-over-year growth of approximately 4% compared to the fourth quarter of 2024. On a full year basis, revenue increased to $262.9 million, up just over 2% from 2024. While the top line growth remains modest, these results reflect continued stabilization across our retail footprint, contributions from new stores open throughout the year, and enhanced product availability and quality driven by approved operational execution at our grower processor facilities. Gross profit for the fourth quarter was $28.6 million, representing 41.9% of revenue compared to $25.4 million or 38.6% of revenue in the prior year quarter. For the full year, gross profit was $114 million or 43.4% of revenue compared to $118.3 million or 45.9% of revenue in 2024. While margins were down modestly on a full-year basis compared to 2024, the year-over-year improvement in the fourth quarter reflects the benefits of ongoing operational improvements at our grower processor facilities, which have driven product quality improvement, yield and potency gains, and better product mix. These benefits were partially offset by promotional retail activity amid ongoing pricing pressure in certain markets. Adjusted EBITDA for the fourth quarter was $13.9 million, representing a margin of 20.4% compared to $8 million, or 12.2%, in the prior year period. The improvement reflects the cumulative impact of the operational turnaround we began executing in late 2024, continued discipline around cost structure, and better utilization of our production footprint, as well as $3 million of employee retention credits recognized in the quarter. For the full year, adjusted EBITDA increased to $50.3 million, up from $46.2 million in 2024, with margin expanding to 19.1% from 17.9%. Full year results include approximately $10.6 million of employee retention credits recognized during 2025. Building on this strong operating foundation, we took an important step subsequent to year end to strengthen our balance sheet and position the company for the next phase of growth. On March 27th, 2026, we refinanced our existing term loan and second lien notes, which had outstanding principal balances of approximately $46 million and $86 million respectively and were scheduled to mature within the next 12 months. We completed the refinancing through the issuance of a $160 million first lien secured term loan due in 2029 with a 12.5% coupon structured as interest only payments over the 36 month term. The proceeds were used to fully repay the existing term loan and second lien notes, including accrued interest and related fees with excess proceeds to be used for general corporate purposes. The transaction was completed with the participation from a syndicate of lenders, including our two largest shareholders, myself included. As part of the refinancing, I contributed additional capital, increasing my overall position relative to my prior participation in the first and second lien debt reflecting my continued confidence in the strength of our business and our long-term strategy. Overall, the refinancing strengthens our balance sheet and improves our financial flexibility. Importantly, this financing was completed without issuing any warrants or equity linked securities, unlike prior debt transactions, resulting in no dilution to shareholders. Additionally, the new term loan provides $13 million of incremental liquidity to our balance sheet and includes a single financial covenant requiring the maintenance of a minimum cash balance, which we believe provides meaningful flexibility going forward. With a stronger balance sheet and approved liquidity in place, we believe the company is well positioned to capitalize on several growth opportunities ahead, including the anticipated transition to adult use in Virginia. In Virginia, several bills were introduced during the 2026 legislative session, including HB 642 and its Senate companion, SB 542, as well as SB 671 that established a framework and sequencing for a regulated adult use market. Earlier this month, the Virginia legislature reconciled the competing bills via conference committee and sent the final bill to the governor for her signature. Under the reconciled bill, all existing medical operators will transition to a dual-use license, with applications expected to be released on or before September 1, 2026, and license issuance on or before December 1, 2026. Converted licenses will pay $10 million dollar conversion fee subject to an agreed upon payment plan with the regulator. Retail sales are expected to commence on January 1st of 2027. We are encouraged by the regulatory process made and are very excited about the opportunity to transition Virginia to adult use sales on January 1st, 2027. In preparation, we are expanding cultivation capacity at our current facility, and exploring development of a second cultivation site to support future demand. Importantly, our manufacturing and retail infrastructure are currently prepared to support adult use sales with minimal incremental capital investment. In markets that have expanded from medical only to also allow for adult use sales, such as New Jersey, the overall market increased significantly following the transition. Based on publicly available data, when comparing annualized medical sales prior to the launch of adult use with the first four full quarters of adult use sales, total market revenue increased by approximately 3.2 times. Assuming a similar market response, we would expect Virginia to experience comparable growth as adult use sales begin. We also want to thank Speaker Scott, Madam Chair Lucas, Delegate Krizek, Senator Aird, and countless others for their leadership in advancing this legislation and positioning Virginia to become the first southern state to pass an adult use cannabis program. We are hopeful that Governor Spanberger signs the bill within the next couple of weeks. Stepping back, 2025 was the year of execution and recovery relative to 2024. We focused heavily on rebuilding operational consistency, improving product quality, and aligning capital allocation with high return opportunities. While the macro environment remains competitive and price constrained, particularly in adult use markets, we believe the business is now meaningfully stronger than it was a year ago. From a macro perspective, competitive landscape remains tight. Pricing pressure persists. across most markets, driven by supply imbalances and consumer value sensitivity. At the same time, enforcement against illicit and intoxicating hemp products remains uneven in certain regions, and we continue to engage constructively with regulators and policymakers on these issues. Against this backdrop, our strategy remains centered on execution, quality, and disciplined capital deployment, prioritizing margin, cash flow, and long-term value creation. Operational execution at our grower processor facilities was the most important driver of improvement in 2025. Investments in genetics, facility upgrades, and enhanced cultivation and production practices translated into materially better yields, higher potency, and improved product consistency. In the fourth quarter, average yield across portfolio increased approximately 28% on a per square foot basis year over year, alongside an increase in AB bud flower production across the portfolio. Potency remained strong in the mid to upper 20% THCA range. Together, these improvements supported a more favorable product mix across both our retail and wholesale channels. We continue to deploy high return capital into our grow processor footprint to meet current demand in Virginia, Pennsylvania, and Ohio. In Virginia, we brought one additional flowering room online during the fourth quarter of 2025, adding approximately 3,000 square feet of canopy within our existing footprint. Additionally, we are planning to add two more flowering rooms of similar size within the existing footprint over the course of 2026 and early 2027, increasing canopy by approximately 33%. In conjunction with this canopy expansion, we are adding hydrocarbon extraction capabilities to support a broader mix of higher value concentrate products, process more throughput, and expand product selection for patients and consumers. We are also in the design phase for a new 65,000 square foot warehouse expansion in Virginia that would roughly double our canopy there and support expanded processing capabilities. In parallel, we are evaluating a potential expansion of our mortgage and other possible traditional financing options to support this build-out. In Pennsylvania, phase one of our cultivation expansion involved converting a legacy flower room into three modernized flowering rooms, effectively creating new productive capacity. Two of those rooms completed their first harvest in January, and the third room is on track to complete its first harvest shortly. Phases two and three involve reengineering unutilized space with the potential to add approximately four additional flowering rooms and increase total canopy by roughly 40%. We have begun ramping up phase two by completing targeted pre-work and other sequencing activities while deliberately limiting capital deployment at this stage. This approach is intended to shorten the timeline required to bring capacity online once there is greater visibility into adult use sales in Pennsylvania. Importantly, these activities are being funded from our existing balance sheet and we would not pursue additional financing to fund these projects until there is clear regulatory direction. In Ohio, canopy increased approximately 2.4 times year over year, allowing us to expand production capacity while maintaining quality and consistency across the facility. We are in the design phase for warehouse expansion that would add additional canopy, though we would only proceed if market conditions and cost of capital are favorable. Turning to retail, since the end of the third quarter of 2024, we have added eight retail locations through the end of 2025, including Toledo, Oxford, Warren, Mansfield, and Parma in Ohio, Linwood in Pennsylvania, Peoria in Illinois, and Little Ferry in New Jersey. As of year end, we operated 42 retail stores across our footprint. Subsequent to year end, we opened an additional location in Springdale, Ohio in January of 2026, and we entered into an agreement to sell our Peoria, Illinois location subject to regulatory approval. We are actively evaluating four to five potential store relocations to improve profitability, and we continue to evaluate retail license and store acquisition opportunities in Ohio, Massachusetts, and New Jersey. We will not be moving forward with the previously contemplated Mount Laurel, New Jersey location following our termination of the underlying transaction. At year end, Jushi had approximately 1,288 employees compared to 1,234 employees at the end of 2024. During this time, we grew from 38 stores to 42 stores while maintaining lean staffing levels and driving productivity improvements across the network. While our store count increased by approximately 11% year-over-year, headcount only increased by approximately 4%, reflecting our ability to scale efficiently. The performance underscores the effectiveness of our corporate and retail operating model and the execution of our leadership team. Especially, we are evolving it to what we believe is a genetics-driven product strategy. We've made substantial progress building a robust genetics pipeline and rolled out new strains across all our grower processor facilities in 2025, with plans to refresh approximately 20 to 30% of our cultivator menu annually. We believe this disciplined approach to genetics supports product differentiation and strengthens our competitive position across markets. We also continue to see growth in our private label portfolio during the fourth quarter, supported by ongoing innovation across both emerging brands, such as Hijinx and Flower Foundry, and established brands such as Ciché and The Lab. During the quarter, we added approximately 280 new unique SKUs, including new offerings across these brands. These launches reflect our continued focus on refreshing assortments, expanding premium and value offerings, and meeting evolving consumer preference. As we aim to provide patients and guests with enhanced variety, and as part of our ongoing focus on retail execution, we are exploring an e-commerce AI agent to drive growth, further optimize online ordering, and recommend our expanded product offerings. On the regulatory front in Pennsylvania, the state continues to face a significant budget gap and progress toward passing an on-time and balanced budget remains an ongoing challenge. While adult use legalization efforts have not yet produced an active legislation, there has been movement on establishing a dedicated regulatory framework for cannabis oversight through SB 49. During the fourth quarter, bipartisan legislation to create a standalone cannabis control board advanced out of the Senate Law and Justice Committee and is now awaiting consideration by the full Senate. The proposed board would oversee the existing medical marijuana program and align state regulation of intoxicating hemp products with federal regulations. We continue to monitor these developments closely as regulatory clarity will be important for long-term planning. In Virginia, in addition to the adult use bill, legislation was passed strengthening enforcement around intoxicating hemp products via SB 543, which enhances the enforcement authority in HB 26 and SB 62, which updates unlawful cannabis criminal penalties. In Ohio, the state enacted SB 56, which updates the regulatory framework for cannabis and hemp products and effectively restricts the sale of intoxicating hemp products to licensed marijuana dispensaries. This legislation, which was signed into law in December of 2025 and became effective in March 2026, is intended to close existing loopholes, strengthen enforcement by state regulators and federal agencies, and direct THC-containing products into the regulated dispensary channel. We believe these changes should support a more consistent and regulated marketplace over time. In Massachusetts, lawmakers have advanced proposals to update the state's cannabis regulatory framework, including legislation passed by the House that would increase the number of retail licenses a single operator may hold, potentially allowing up to six locations over time. The Senate has proposed a smaller increase, and the chambers continue working toward a final version. If enacted, these changes could support greater consolidation and influence competitive dynamics in the market. At the federal level, there has been incremental progress toward addressing the hemp regulatory gap created by the 2018 Farm Bill. In November 2025, Congress enacted legislation that narrows the federal definition of hemp, restricts synthetic intoxicating hemp-derived cannabinoids, and establishes new limits on THC in finished products. These changes are scheduled to take effect in November 2026. We believe these measures could help direct intoxicating THC products into the state-regulated cannabis markets over time, though the timing and broader regulatory framework continue to evolve. On rescheduling, the process to move cannabis to schedule three remains underway with regulatory review continuing and no final rule issued as of today. While we view this as a constructive development, the ultimate timing and scope of impact remains subject to federal rulemaking process. We'd like to thank President Trump for his leadership by signing the EO at the end of 2025. Finally, Potential federal reforms that could improve capital markets access for U.S. cannabis operators, including proposals such as the CLIMAC, remain uncertain, and no legislation has been enacted. We will continue to monitor developments at the federal level. With that, I will turn the call over to Michelle for a detailed review of our financial results.