“We are extremely pleased to complete this acquisition and solidify our presence in Nevada, particularly the greater Las Vegas region…We look forward to continuing to serve the Nevada wholesale market with high-quality flower and a full suite of cannabis brands including infused products. While Nevada, and specifically Las Vegas, has been impacted by the COVID-19 pandemic, we see great opportunities with the expansion of our facility and exploring attractive M&A prospects as we look to expand our footprint in this strategic limited license market,” said Jim Cacioppo, Chief Executive Officer, Chairman and Founder of Jushi.
The acquisition of FBS Nevada was originally announced on July 25, 2019. During this time, Production Excellence had entered into the Nevada market under a management service agreement with FBS Nevada. FBS Nevada brings plenty to the table, making this a substantial acquisition for the Company. FBS Nevada operates one of the two, 7,500 square foot adjacent facilities. Moreover, this facility has been upgraded to produce approximately 2,500 pounds of high-quality dry flower per year.
Currently, the legal cannabis market is threatened by the underground market largely due to a disparity between quality. Bonnie Lysyk, the Auditor General of Ontario, discovered in her annual report that the underground market represented roughly 80 per cent of cannabis sales in Ontario during 2019 and 2020. With this in mind, consumers found illegal market cannabis to be of superior quality compared to products from the Ontario Cannabis Store (OCS) or licensed retailers. As the cannabis market continues to become oversaturated with low quality cannabis flower, distributing products that can complete with the underground market becomes increasingly important.
FBS Nevada claims to be capable of producing ‘high-quality’ flower, but can it really? Well, FBS Nevada has partnered with third-party extractors to produce a diverse portfolio of vape products and concentrates for Jushi under the award-winning brands The Lab and The Bank. Additionally, Equity Guru recently covered the release of new products, namely Jushi’s Tasteology edibles and Seche fine flower prerolls. With a suite of high-quality products behind it, FBS Nevada has undoubtedly assisted Jushi in creating brands that can compete with the shady underground market.
With plans to connect two adjacent facilities to create a single production space totaling approximately 16,600 square feet, FBS Nevada is certainly committed to producing an abundance of high-quality flower. This is expected to double cultivation capacity and incorporate a CO2 and hydrocarbon extraction facility. This is a huge acquisition for Jushi that comes on the heels of the Company’s recently announced expansion project. According to an announcement made by Jushi on April 1, 2021, the Company’s wholly-owned subsidiary Pennsylvania Medical Solutions (PAMS) plans to expand its cultivation facility by a total of 190,000 square feet. With PAMS’ expansion plans and Production Excellence’s latest acquisition of FBS Nevada, Jushi is in an excellent position.
Jushi’s stock price opened at $8.30 today, up from a previous close of $8.19. The Company’s stock price quickly climbed, reaching a high of $8.74 following the news. The stock’s price currently sits at $8.71 indicating notable growth since open.