Jushi Holdings Inc. Q3 2026 Earnings Conference Call - Jushi Holdings Inc.

Good afternoon. My name is Rochelle, and I will be your conference operator today. At this time, I would like to welcome everyone to Jushi Holdings, Inc. Q3 2026 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 JUCHY's third quarter 2026 earnings conference call. My name is Trent Wolovec, and I am the Co-Chief Strategy Director at JUCHI 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 Baric, 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.juchico.com. In addition to the company gap results, management will also provide supplementary results on a non-gap basis. Please refer to the press release issued today for a detailed reconciliation of gap and non-gap 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 JUCHY's Form 10-K and other periodic filings and registration statements, which may be accessed via EDGAR and SEDAR, as well as the investor relations section of our website. These forward-looking statements speak only as of the date of this call, and JUCHI especially disclaims any obligation to update this forward- looking information. i will now turn the call over to jim thank you trent thank you everyone for joining our call today this afternoon i will begin with a high level review of our third quarter financial performance and the key drivers of our results i will then discuss our preparations for adult use sales in virginia along with our corporate initiatives and key regulatory developments before turning the call over to Michelle for detailed financial review. Beginning with our financial results, third quarter revenue increased by $4.8 million or 7.3% to $70.5 million compared to $65.7 million in the prior year quarter. This was our second consecutive quarter with revenue above $70 million, supported by continued wholesale growth and higher retail sales in Ohio and Virginia. Wholesale revenue increased 40% year-over-year to an all-time quarterly record of $9.7 million, compared with $6.9 million in the prior year quarter. This marked our second consecutive quarter of record wholesale revenue, exceeding $9 million in each quarter. This growth reflects our continued expansion into new third-party dispensaries and an increase of 44 additional dispensary purchasing our products year-over-year, strengthening relationships with wholesale partners, and improved product availability, allowing us to reach more patients and consumers across our markets. These results reflect stronger execution across sales, cultivation, and manufacturing, where the wholesale revenue increases were across all markets, with the exception of Nevada, where sales remained relatively flat. In Massachusetts, higher production volumes supported greater product availability and increased bulk sales. In Virginia, we have increased our cultivation canopy with an additional flowering room now operational, while in Pennsylvania, improvements to our existing facility over the last year have increased productive cultivation capacity by converting an underutilized flowering room into three more efficient rooms. The Pennsylvania results are particularly encouraging given the maturity of its medical market. In Ohio, we believe enforcement of Ohio's intoxicating hemp restrictions benefited both our wholesale and retail business. Together with continued improvements in harvest yields, product quality, and product diversity, these investments are supporting higher production volumes and greater product availability across our wholesale, and retail channels. Retail revenue increased 3.5% year-over-year to $60.8 million compared with $58.8 million in the prior year quarter. Retail units sold increased 8.4 percent, and transactions increased 4.5 percent, while lower average selling prices continued to weigh on revenue growth. Ohio was the largest contributor to retail growth, supported by our newer dispensaries and higher unit volumes. We also believe the state's restrictions on intoxicating hemp products and related enforcement are helping direct demand toward licensed operators. That dynamic is particularly relevant as we continue to develop both our retail and wholesale presence in the market. Virginia achieved an all-time quarterly retail sales record for the second consecutive quarter with revenue increasing 7.6% year-over-year, reflecting growth across all six of our dispensaries. Home delivery in Virginia also reached a new quarterly high. These results reinforce the strength of our existing medical business as we prepare for the transition to adult use. Our Little Ferry, New Jersey dispensary, which opened in the fourth quarter of 2025, also contributed to retail growth. These gains were partially offset by lower revenue in Massachusetts, Illinois, Pennsylvania, Nevada, and California. Gross profit increased $1.7 million to $32.3 million, or 45.9% of revenue, compared with $30.7 billion, or 46.7% in the prior year quarter. While gross profit dollars increased year over year, gross profit margin declined approximately 80 basis points. Higher sales volumes, particularly in Ohio retail, were the primary driver of gross profit growth. Continued improvements in production efficiency and product costs help offset the impact of lower average selling prices and competitive pricing pressure across certain markets. Adjusted EBITDA increased to $13.6 million, representing an adjusted EBITD margin of 19.3%, compared with $12.8 million, or 19.5%, in the prior year quarter. Importantly, this increase was achieved with lower employee retention credit income, which was approximately $108,000 this quarter compared with $790,000 in the prior year quarter. Turning to the federal tax framework, the third quarter was our first full quarter following the April 28th rescheduling of qualifying state-licensed medical cannabis to Schedule 3. That change removed the Section 280e deduction disallowance for qualifying medical cannabis activities and remains an important development for our business. The Treasury Department and the IRS have now made Section 280E Cannabis Tax Guidance an official priority for 2026 and 2027, with resources being devoted to the issue during the federal fiscal year running from October 1st, 2026 through September 30th, 2027. We continue to monitor that process closely, including the potential implications for prior taxable years. Our DEA registration process also continues to advance. Inspections of our retail and grower processing facilities are in process and our teams have had positive interactions and productive conversations with the agency. We remain focused on working constructively through the registration process turning to virginia we are preparing for the commencement of adult use sales on july 1st 2027. we believe this represents a significant long-term growth opportunity for jushi and virginia remains the top priority for investment across our grower processor footprint as an existing medical cannabis operator we expect to transition into the adult use market under the dual use provisions of Virginia's new cannabis legislation which allow licensed medical operators to serve both medical patients and adult use consumers. This transition requires a 10 million dollar conversion fee which we expect to pay in installments over a three-year period. We anticipate regulations will be in place in early 2027 and look forward to completing the application process so that we are prepared to serve adult use consumers when sales commence. We believe Virginia has the potential to become a multi-billion dollar state regulated cannabis market compared with the approximately 180 million dollars in annual medical sales today. Estimates discussed during the legislative process pointed to an approximately three billion dollar unregulated market outside of the license system. Given expected demand and the time required to add cultivation capacity, we believe supply could become constrained for the first 24 to 36 months following the adult use launch. Our expansion plans are designed to help us meet the expected demand. We are advancing three cultivation expansion products. Together we expect these projects to increase annual harvest from approximately 29 in 2025 to 115 or more in the first full year after all three expansions are completed and operating at manualized run rate. This would represent an approximately 300% increase in the annual harvest. The first project is the expansion of our existing indoor cultivation facility with the two additional flowering rooms, one of which is already complete, together with hydrocarbon extraction capabilities to broaden our product offerings. With this expansion, we expect to complete approximately 40 indoor room harvests in 2026 and increased harvested biomass by approximately 25% compared with 2025. The second project is a lease for a 10-acre secured agricultural greenhouse property with approximately 20,000 square feet of an agricultural structure. Construction is underway with production capacity expected to come online early in the first quarter of 2027. We view this as a high return on investment opportunity with the potential to provide a reliable source of biomass. Together, the first two Virginia projects are expected to increase harvest by approximately 60% in 2027 compared with 2026. The third project is a new warehouse expansion that will approximately double our indoor biomass production capability. The project is currently in permitting with the goal of beginning construction in the fourth quarter and completing the first harvest in 2028. We are exploring financing with conventional commercial banks that could provide a more favorable cost of capital than private credit providers. As I mentioned earlier, following the completion of all three projects in Virginia, we anticipate a roughly 300% increase in harvest, which we believe will position us well to meet anticipated adult use demand and capitalize on significant market expansion opportunity. Importantly, our six Virginia dispensaries were designed years ago as a larger format Superstore locations in anticipation of adult use. These have large footprints, more than 50 parking spaces at most locations, and sufficient sales floor capacity to add point of sale terminals. Because that capacity is already built into the footprint, we expect only limited incremental retail capital investment will be needed for launch. We will also maintain dedicated areas in each of our stores for medical patients. Based on publicly available market data from New Jersey's transition to adult use and subject to product availability, we believe our six Virginia dispensaries are well positioned to generate annualized retail sales growth comparable to those achieved by New Jersey dispensary during the initial transition from medical to adult use. Our focus is on aligning cultivation capacity, product availability, and the retail experience to prepare for the first mover opportunity. Beyond Virginia, Ohio and Pennsylvania remain our secondary cultivation investment priorities. In Pennsylvania, we have the ability to expand at an accelerated pace within our existing facility once there is greater clarity around the timing of adult use sales. In Ohio, we are finalizing drawings for potential expansion with any decision to proceed dependent on capital availability, the cost of capital, and market conditions. Turning to our retail footprint, we ended the quarter with 42 stores across eight states compared with 41 stores across seven states in the prior year quarter. In August, we completed the relocation of our Johnstown, Pennsylvania dispensary to Belle Vernon and saw positive results during the new location's first two months of operation. We have identified five to seven additional potential relocation candidates with two expected to be completed over the next two quarters and the remaining opportunities representing longer-term projects. These moves remain an important part of our effort to improve the productivity and profitability of our existing retail portfolio. Turning to our corporate initiatives, on July 30th, 2026, we completed the redomiciling of our parent company from British Columbia, Canada, to the state of Nevada following shareholder approval on June 24th, 2026. This move better aligns our corporate structure with our U.S. operations and supports our long-term strategy. Across our other markets, we continue to monitor regulatory developments that could influence future growth. In Pennsylvania, we are closely following the upcoming midterm elections and ongoing discussions around adult-use cannabis legalization. We are also monitoring developments surrounding the regulation of skill games, as both skill games and adult-us cannabis represent potential sources of additional tax revenue for the Commonwealth. We believe discussions around these two industries could become increasingly connected through the Commonwealth's budget negotiations and may influence the timing of future legislation. While the timing for cannabis reform remains uncertain, we will continue to monitor these developments and align our investment decision with greater regulatory clarity. At the federal level, we remain actively engaged in opposing efforts to weaken or further delay the statutory language closing the farm bill loophole, and we continue to believe the curve framework will remain in place. Under the existing legislation, restrictions on certain synthetic cannabinoids are scheduled to take effect in November of 2026, with the broader restrictions on intoxicating hemp-derived products scheduled to takes effect in December of 2027. 26. Some hemp industry participants continue to argue that semi-synthetic cannabinoids, which are chemically converted outside the plant, can continue to be manufactured and sold commercially. We believe this reinforces the need for full supply chain custody and visibility for all active ingredients so consumers know where every ingredient in their products come from and how they were naturally produced from plant biomass grown here in the USA. The performance of Ohio's regulated cannabis market following the state's intoxicating hemp ban reinforced our view that consumers turn to licensed operators when regulatory loopholes are closed. We believe effective implementation at the federal level could strengthen the competitive position of regulated operators and support industry growth over the longer term. Finally, we continue to await a final ruling on the broader rescheduling of cannabis to Schedule 3. The proceedings remain temporarily stayed as the administrative law judge considers additional procedural requests. However, the judge recently denied the request to reopen the hearing for additional testimony and discovery, which we view as a positive development that could help avoid further delays. The current briefing schedule is expected to conclude on November 5th, at which point the stay is scheduled to expire. We are encouraged by the DEA's continued support for rescheduling and its opposition to further delays, we remain optimistic about the ultimate completion of reschedulding, although the timing remains uncertain. The competitive environment remains challenging with continued pricing pressure and competition from illicit and unregulated products. Against that backdrop, our priorities remain consistent, improve product quality and availability, expand third-party distribution, optimize our retail footprint, and prepare for adult use sales in Virginia. We will continue to balance those opportunities with disciplined capital allocation. With that, I will turn the call over to Michelle for a detailed review of our financial results. Thank you, Jim, and good afternoon, everyone. I will provide more detail on our third quarter results. Revenue for the third quarter increased $4.8 million to $70.5 million, compared to $65.7 million in the prior year quarter. The increase reflected a $2 million increase in retail revenue and a $4 million increase in wholesale revenue. Revenue in our retail channel was $60.8 million compared to $58.8 million in the prior year quarter. Retail units sold increased 8.4% year-over-year, with revenue growth primarily driven by Ohio and Virginia. Ohio retail revenue increased $3.1 million, including contributions from the two dispensaries open since the end of the second quarter of 2025 and the continued maturation of other recently opened locations. Virginia retail revenue increased $900,000, driven primarily by an 11.5% increase in units sold, with revenue growth across all six dispensaries. Our Little Ferry, New Jersey dispensary, which opened in the fourth quarter of 2025, also contributed to the year-over-year increase. These increases were partially offset by lower average selling prices resulting from competitive pricing pressure and promotional activity across certain markets, as well as our Peoria, Illinois location no longer being included in our operating results beginning in January 2026. Jushi branded products represented approximately 55.7% of retail revenue across the company's vertical markets compared to 56.4% in the prior year quarter. As Jim mentioned, Virginia achieved record quarterly delivery sales with a 29% increase year over year within our health service area. Delivery sales outside our health service area increased approximately 46% year over year. Overall, delivery orders Consumers increased approximately 12% and we experienced an increase in units per order and average basket sizes. Wholesale revenue was $9.7 million compared to $6.9 million in the prior year quarter representing a 40% year-over-year increase and marking our second consecutive quarter of record wholesale revenue. The increase was primarily driven by expanded distribution into additional dispensaries, supported by improved product quality and higher production volumes, which have contributed to increased demand for Juicy branded products. Growth was achieved in Massachusetts, Pennsylvania, Virginia, and Ohio, while Nevada remained relatively flat. In Massachusetts and Pennsylvania, wholesale revenue increased $1.1 million and $676,000 respectively, primarily due to expanded distribution, including placement in new dispensaries and higher production volumes that supported greater product availability. Virginia wholesale revenue increase $748,000 due to higher demand from our wholesale partners, while increased production capacity and expanded distribution into new dispensaries in Ohio contribute $191,000 of additional wholesale revenue. Gross profit increased to $32.3 million, or 45.9% of revenue, compared to $30.7 million, or 46.7% of the revenue in the prior year quarter. Higher sales volumes, particularly in Ohio retail channel, were the primary driver of gross profit dollar growth. Continued improvements in production efficiency and product costs at our grow processor facilities helped offset the impact of lower average selling prices resulting from competitive pricing pressure and promotional activity across certain markets. The lower average-selling prices contributed to the modest decline in gross profit margin Operating expenses for the third quarter were $28.8 million compared to $283 million in last year's third quarter. The increase was primarily due to higher employee-related costs from expanded operations, including new store openings and an increase in professional fees. These increases were partially offset by a reclassification of certain depreciation expense to cost of goods sold. Other income and expense for the third quarter of 2026 resulted in a net expense of $9.3 million compared to a net expenses of $17.2 million in the prior year quarter. The year-over-year change was driven in part by a $241,000 fair value gain on derivatives in the current year compared to $6.3 million fair value loss in the priority year quarter For the current quarter, other expense also included interest expense of $10.2 million, partially offset by other net of $741,000. Income tax expense was $6.8 million for the third quarter, compared to $8.8 in the prior year quarter, reflecting the federal rescheduling of state-licensed medical cannabis from Schedule to Schedule 3, which became effective on April 28, 2026, and the resulting elimination of Section 280E for qualifying state-licensed medical cannabis activities. The net loss for the third quarter was $12.5 million, compared to $23.7 million in the prior year. Adjusted EBITDA was $13.6 million, compared to $12.8 million in the prior year period, and adjusted EBITDA margin was 19.3% compared to 19.5%. As noted earlier, the current quarter included $108,000 of employee retention credit income compared to$790,000 in the prayer quarter. Cash flows provided by operations for the first nine months of 2026 were $12.9 million, compared to $11.7 million for the first nine months 2025. The year-over-year increase was primarily attributable to an improvement in our operating results. Turning to the balance sheet, we ended the quarter with $30.9 of cash, cash equivalents, and restricted cash. During the third quarter, we paid $4.6 million including interest to fully satisfy the outstanding promissory note associated with our acquisition of the Mansfield and Oxford dispensaries in Ohio. This followed the payment of $2.4 million including interests in June 2026 to fully satisfy the promissary note associated with the acquisition of Toledo and Warren dispensary. These acquisitions have strengthened our retail presence in Ohio, and we remain encouraged by the performance of these locations and the long-term growth opportunity in the market. As of September 30, 2026, we had $215.6 million of debt subject to repayment, excluding the $21.5 million of promissory notes issued to San Martino that remain in dispute, and excluding leases and property, plant, and equipment financing obligations. During the third quarter of 2026, we paid $2.9 million for capital expenditures, bringing total capital expenditures through September 30th to $9.8 million. For the full year 2026 we currently expect total capital expenditures of approximately $12 to $15 million, primarily focused on renovations within our existing Virginia cultivation facility in preparation for adult use sales, along with early preparations for potential adult use market in Pennsylvania. Turning to our larger Virginia expansion project, as Jim discussed earlier, we have completed the design for the expansion of our indoor cultivation facility at our Manassas location that is expected to approximately double the flowering canopy of our existing facility, bringing combined flowering canopy to approximately 45,000 square feet. We expect to complete permitting in the near term with constructions targeted to begin late in the fourth quarter of 2026 and an anticipated construction period of approximately 12 months. We currently estimate construction costs of approximately $40 million plus equipment costs, a portion of which we expect to finance through leasing arrangements. We have received a term sheet and indications of interest from existing lenders for financing that could cover at least half of the construction cost. We expect to fund the remaining investment through a combination of existing cash and free cash flow generated from Virginia operations following the commencement of adult use sales in July 2027. The timing and scale of the project will remain subject to permitting, financing availability, and market conditions. With that, I'll turn the call back to Jim for closing remarks. Thank you, Michelle. Our third quarter results reflect continued progress in the areas we can control. We increased revenue and gross profit dollars, delivered another record quarter in wholesale revenue, and expanded the reach of our products. Higher retail sales, retail volumes, and growth in Ohio and Virginia helped offset continued pricing pressure across the broader portfolio. Virginia remains our most significant near-term growth opportunity. We are advancing cultivation and processing projects, exploring financing alternatives to support these investments, and preparing a retail network that was originally designed with adult use in mind. We believe these investments can position us to serve a much larger market while recognizing that execution, product availability, regulatory timing, and access to capital will determine the pace of that opportunity. Across the business, our strategy remains centered on product quality, persistent execution, and capital discipline. We will continue to expand wholesale distribution, improve the productivity of our retail footprint, and allocate capital carefully as opportunities develop. I would like to thank our employees for their continued dedication and hard work, and our patients, customers, and business partners and shareholders for their ongoing support. Thank you for joining us today. Operator, please open the call to questions. Thank you. we will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment while we poll for questions. And our first question will come from Federico Gomez with ATB Capital Markets. Please proceed with your question. Hi, good evening. Thanks for taking my questions. First question on wholesale, pretty strong growth there. And you mentioned higher production volumes. How much more runway do you think there is for wholesale penetration in some of your key markets? Should we model this sort of close to $10 million as the new baseline going forward, or is there, you know, room for additional growth here? Thank you. Hi, Frederico. Nice to talk to you. Thanks for the question. Yeah, wholesale, you know, the availability and the demand for the product has to do with, you know, increased yields. Some of it's just growing more per square foot. Some of its capital investment based. And obviously, we have a good sales force and we're doing the execution well, you know, with the product that is in demand because of the quality. uh and so i would say there's um more uh availability uh that we can add in pennsylvania um you know uh we're bringing on uh one of the three smaller rooms up to 100 capacity uh beginning of next year um so we're you know we're planning uh cautiously we could bring on a second room and a third room of those three uh that just need some minor amount of capital to get to our level of standards. So there's definitely growth in Pennsylvania that we should hopefully be able to capture, assuming there's demand. And then Massachusetts, I think that, you know, there is room to increase yields as well, but, you Know, not on an expansion capability, but just potentially, you know, growing higher per square foot, which will give us more to sell. In addition, we're selling bulk there. We might be able to convert that into packaged goods. So there's some levers there as well. Ohio is based upon capital investments, so that's not something you should model in, you now, the next few quarters because we have a plan to have substantial growth in our GP, but that's going to take to the capital investment, which planning on doing assuming we have the financing in place um and uh and then virginia obviously is a big kahuna we explained a lot about you know how um you know um uh you know how we're doing there and how we' re gonna how we re gonna grow it um and that that uh i think there is some some uh uh growth opportunities there in the near term uh but but there's also the adult use around the corner, so there's a balance there. Great. Thank you. Second question on your store relocations. You mentioned five to seven additional ones that you're looking at. Can you talk about what's the impact on when you do those relocations in terms of what's the payback period how how fast those new stores ramp i mean how how fast they actually match the performance of the the old store and how how much of a benefit you see in terms off the upside and performance there thank you that's a good question yeah on the store relocations you know we have two near-term stores we had one that we did in july the one we did in July was the home run um you know uh i don't can't i'm not going to comment on the payback period um uh but uh it's not as highly levered for example as uh a gp investment when you're adding rooms that's a highly lever where there's not a lot of variable cost uh but because you are you know adding a lease and putting capital into it so a store you know so um i would but i would say it's uh it it's very good on a vertical basis uh we did this del Vernon location in Pennsylvania, for example. I think it was in July it started up. It exceeded our expectations. So everyone's a little different, but I would say that the stores we're closing tend to have very little profitability and little sales. So I think that in terms of the effect on growth, when you look at the store that's being closed versus what's open, I think the bar is very, very low on sales growth and also profitability. Those stores that we're closing are profitable on a vertical basis, but they are not profitable as retail stores. So I think it adds to profitability and sales. We always get one wrong where we think we have a great market. We're not as accurate as we projected, but we're getting better at that. And I think we kind of understand it. And some of them grow a little slowly, but they're trying to be great stores. You know, we had a store in Mount Pocono that we opened, and that's been growing for two, two or three years straight. I forget exactly how long it's been open, but that's always a great thing. But that's a little, you know, the Bell Vernon one popped right away, and it still has growth. So they're a little different. Both were good investments, but one exceeds our near term expectations. So that's the kind of the way to think about it, Frederico. Great. Thank you very much. And as a reminder, it's star one if you would like to ask a question. Next, we'll move to Kenrick Tyke with Canaccord Genuity. Thank you, and good evening. Jim, you touched on the importance of the midterms. Specifically, though, I'd like to just have a further discussion around Pennsylvania. It looks like we're potentially setting up for a breaking of the stalemate in the state with the Democrats possibly getting both the governorship and control of the Senate and the House. Given the importance of Pennsylvania for you, the size of your footprint there and your commentary around sort of some early prep for adult use in Pennsylvania, can you speak to the change in calculus that the Democrats getting the triple in Pennsylvania would create? and also just to sort of the step change would drive for you if you were to have the twin tailwinds of Virginia and Pennsylvania through 2027. Yeah, I mean, in terms of the political side of it, I don't want to get deep into that, but I will say the following. The Republicans have controlled the Senate for, I think, over 50 years straight, right? So I think it's I think it's hard to it's hard to, you know, you know, be be so accurate about that. You know, and if the Dems have a tie, which is twenty five, twenty five, the you know they have a Tiebreaker vote in the governor. So that's that makes it you know that makes it you know, win for the Democrats. And so I don't believe that there's this huge opposition the republican party um but like i don't if they win the senate it's not it's not like it's it's going to get done i just think that um my opinion personal opinion for what it's worth is they they believe that uh can this is more of a democratic issue and that they should get something um and one of the things we focused you on to prepare remarks for skilled gaming um you know they believethat should be taxed and regulated uh and then try to tie the two together. So I don't believe it's necessarily all one way or another. And I wouldn't count the Republicans out so quick. We'll see what happens and take it from there. Pennsylvania, I will state that Pennsylvania is long overdue. And, you know, every state around it is as a recreational product. They're losing a tremendous amount of tax revenues. They have these rainy day funds they've been running down. I mean, there's several ways that, you know, you called this like two or three of these funds and one's kind of the rainy day. But they're essentially money that was saved up from COVID from federal grants for the most part. And they've gone through, I believe, you know, it's not clear exactly what the numbers are, you Know, but I do believe they've got through levels that uh you know some of the more clear-eyed politicians are comfortable with meaning that the rainy day funds in a non-recession is lower or ready than they would like so they need the tax revenues uh and uh and that's always very important and they're late to the game they're just giving free money to the other states around them which is kind of kind of crazy. So I think that something could happen. For us, obviously, the Virginia thing is huge. I think there's little doubt in my mind we'll be the fastest growing cannabis company once Virginia flips and there'll be a multi-year opportunity. If Pennsylvania flips, what we did talk about in prepared remarks is that we have a capital program that we can accelerate to take full advantage of the early part of it with our grow processor. So we have a fair number of space we could bring on pretty quickly. We've done long tail work, like getting more electricity to the facility. That's in process and almost done. We moved out all the staff of a certain office area that was in the warehouse that we're going to demolish and just put up grow rooms and some employee welfare areas. So we're in really good position if that state goes. We're the most exposed to it as a percent of revenues, as a percentage of profitability. We have a small cap relatively. Everybody else who has that kind of position, Pennsylvania is buried in a much larger company. So if that happens along with Virginia, it would be crazy good if the program it's a good program thank you john and then just a good segue with respect to your prepared remarks and your comments around virginia you made the comment with in terms of your six stores there being you know more of a superstore purpose built for adult use and then also to the effect of you know generate annual revenues similar to those of new jersey in the early days was that in reference to you know sort of what was defined as a super store doing you know 20 million a year in revenues plus or those outlier stores where there were initially stores doing some uh you know 50 million in revenues i just want to make sure we don't get ahead of ourselves from a modeling point of view on you know what you were infer instead of what you're inferring in terms of what those six six stores could do should you have the capacity or as you have the capacity to support them yeah the uh and and of course as as we build up that capacity you would think other retail stores would open up uh but i do think um uh i do think that's a great wholesale opportunity for us so let's not let you know so so we have multiple ways to play that uh as well um and uh we're very supportive of additional retail stores opening up uh but but going back to the initial opportunity uh you know we had my closest experience to this this was in Illinois. We had two stores that went to four that were doing, you know, about seven and a half million in revenue to two stores. And then we had four at the peak doing 82 million of revenues. And we had one store that was doing like 35 million, you knows. And those were very insignificant. Those had big lines and big, you now, it just was hard to get that kind of traffic through those stores. So that was, you know, they're not nearly as well set up as our Virginia stores are. So I think that it's hard to say, you know, what's going to happen in terms of on a per store basis of what the limit is. And I do think that for the first 12 months, you know, the supply will be the limiting factor. But I think we gave the commentary for you guys to figure it out and look at it. And, you If there's six stores, I would think there's probably two or three that are at the top end and one or two in the middle and one or two not as good as the first group and the second group. There will still be great stores in our system. So I don't think it's going to be equal. And so we'll see how this shakes out. It's going be a great market. I think we'll be able to sell all the products that we're able to grow. And we spoke very clearly about the expansion opportunity. And if I was analyzing Jushi, I would assume the quarters, you know, are going to be kind of boring between now and adult use in Virginia. I mean, I'm not making a projection, but I just don't, relative to the value of the company, the Virginia going to adult use is really the big thing. And we laid out, you knows, the production goals that we have. And obviously, if we're doing that capital investment, we believe we can sell the product and at good prices and get a good payback period. So that's the way I would think about it too. Or add that to your analysis on a per store basis. Let's put it that way. Thank you, Jim. Maybe just a quick final one for me. Just with respect to the term sheet, is that something we can and should or rather do expect to finalize in short order here and that that will be resolved in the year? Or how are you thinking about finalization of that term sheet just so that we have that convictional visibility around. Yeah, this is the term sheet with the banks you're speaking about, right? In Virginia? Yes, that's correct. The one Michelle mentioned. Yeah, John, do you want to comment on that, please? Yeah, I mean, we're not going to give specific details around confidential term sheets except to say generally we're targeting completing it during Q4. Appreciate that. That's all I need. Thanks. I'll get back in here. Thank you. Thank you, and this time there is no further questions. I would like to turn the floor back to Jim Cassiopoe for closing remarks. In fact, we appreciate everybody who's listening in or reading the transcript, and we'll look to provide more information as time goes on, and thanks very much to all of the employees again. All right. Thank you! Bye-bye. Thank you. This does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.