Canaccord Genuity has initiated coverage on Jushi Holdings Inc. (JUSHF) with a speculative Buy rating and a $7.50 price target. The stock closed Tuesday at $5.74.
Analyst Bobby Burleson cited Jushi’s planned store growth for 2021 and its exposure to the Illinois and Pennsylvania markets for the rating. The analyst also noted the potential for the Virginia market, although it is early to know whether this market will be as promising as others.
While other brick-and-mortar stores are closing right and left, cannabis dispensaries are proving that physical retail isn’t dead. Jushi is expected to operate 23 stores by the end of the year. It currently has 13 stores, mostly located in Pennsylvania and Illinois, with a slight presence in California and a small location in Virginia. Virginia is too early to call but could be like Arizona and Pennsylvania based on approved conditions. It is also a limited license state, which bodes well for companies that receive approval early. Burleson wrote that Jushi “is the only operator licensed for the densely populated, affluent metro area of Northern Virginia just outside of Washington, D.C.”
Expansion is planned for California, Nevada and Ohio. The company has a modest market share in the Golden State but looks to increase that footprint. Jushi’s current business in Nevada is as a cultivator and producer, but Burleson said there could be a retail opportunity there in the future. Ohio is a cultivation business at this time and will be operational in 2021.
Jushi has eight dispensaries in Pennsylvania, which is a medical-use-only state. The company has plans for another seven and Burleson estimates Pennsylvania will account for 45% of Jushi’s 2021 revenue. The state has more than 100 active dispensaries with 500,000 registered patients and caregivers. Retail sales have hit roughly $1.1 billion since the