Filed Pursuant to Rule 424(b)(3)
Registration No. 333-266287

PROSPECTUS SUPPLEMENT NO. 2
(to Prospectus dated August 12, 2022)

Jushi Holdings Inc.
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This prospectus supplement is being filed to update, amend and supplement the information contained in the prospectus dated August 12, 2022 (as supplemented or amended from time to time, the “Prospectus”), which forms a part of our Registration Statement on Form S-1 (Registration No. 333-266287). This prospectus supplement is being filed to update and supplement the information included in the Prospectus with the information contained in our Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (the “SEC”) on September 26, 2022 (the “Form 10-Q”). Accordingly, we have attached the Form 10-Q to this prospectus supplement.

This prospectus supplement updates and supplements the information in the Prospectus and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any amendments or supplements thereto. This prospectus supplement should be read in conjunction with the Prospectus and if there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement.

Our Subordinate Voting Shares are listed on the Canadian Securities Exchange (the “CSE”) under the symbol “JUSH” and quoted on the OTCQX Best Market under the symbol “JUSHF.” The last reported sale price of our Subordinate Voting Shares on the CSE on September 28, 2022 was C$1.87 per share and on the OTCQX Best Market on September 28, 2022 was $1.34 per share.

Investing in our securities involves risks. See the section entitled “Risk Factors” beginning on page 9 of the Prospectus.

Neither the SEC nor any state securities commission has approved or disapproved of the securities to be issued or sold under the Prospectus or determined if the Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.


The date of this prospectus supplement is September 29, 2022






UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________
FORM 10-Q
________________________________
(Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2022
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to
Commission file Number 000-56468

JUSHI HOLDINGS INC.
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(Exact name of registrant as specified in its charter)
________________________________________________________________________________________________         
    
British Columbia98-1547061
(State or other jurisdiction of incorporation or organization)(IRS Employer
Identification No.)
301 Yamato Road, Suite 3250
Boca Raton, FL
(Address of principal executive offices)
(561) 617-9100
Registrant’s telephone number, including area code
33431
(Zip Code)

   (Former name, former address and former fiscal year, if changed since last report.)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
N/A
N/A
N/A
         
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes □ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes □ No




Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer         ☐                         Accelerated filer         ☐
Non-accelerated filer                                  Smaller reporting company     ☐     
Emerging growth company     

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of September 21, 2022, the registrant had 195,769,605 subordinate voting shares, no par value per share, no multiple voting shares, no par value per share, no super voting shares, no par value per share, and no preferred shares, no par value per share, outstanding.




JUSHI HOLDINGS INC.
Table of Contents
For the quarterly period ended June 30, 2022
Page


Table of Contents
PART I - FINANCIAL INFORMATION
1Item 1. Financial Statements
JUSHI HOLDINGS INC.
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars, except share amounts)
June 30, 2022 (unaudited)December 31, 2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$43,186 $94,962 
Accounts receivable, net2,806 3,200 
Inventories, net44,742 43,319 
Prepaid expenses and other current assets6,538 12,875 
Total current assets$97,272 $154,356 
NON-CURRENT ASSETS:
Property, plant and equipment, net$174,592 $137,280 
Right-of use assets - finance leases109,492 94,008 
Other intangible assets, net206,742 182,466 
Goodwill88,654 52,920 
Other non-current assets30,481 27,586 
Non-current restricted cash625 525 
Total non-current assets$610,586 $494,785 
Total assets$707,858 $649,141 
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable$14,053 $10,539 
Accrued expenses and other current liabilities49,174 47,972 
Income tax liabilities - current9,910 6,614 
Debt, net - current portion (including related party principal amounts of $3,476 as of June 30, 2022 and $0 as of December 31, 2021)
70,322 6,181 
Finance lease obligations - current13,117 12,620 
Total current liabilities$156,576 $83,926 
NON-CURRENT LIABILITIES:
Non-current debt, net (including related party principal amounts of $0 as of June 30, 2022 and $4,578 as of December 31, 2021)
$115,675 $122,971 
Finance lease obligations - non-current93,045 88,297 
Operating lease liabilities - non-current16,941 15,163 
Derivative liabilities26,289 92,435 
Income tax liabilities - non-current68,193 57,143 
Contingent consideration liabilities - non-current7,043 8,223 
Total non-current liabilities$327,186 $384,232 
Total liabilities$483,762 $468,158 
COMMITMENTS AND CONTINGENCIES (Note 20)
EQUITY:
Common stock, no par value; authorized shares - unlimited; issued and outstanding shares - 194,653,132 and 182,707,359 Subordinate Voting Shares as of June 30, 2022 and December 31, 2021, respectively
$— $— 
Paid-in capital475,592 424,788 
Accumulated deficit(250,109)(242,418)
Total Jushi shareholders' equity$225,483 $182,370 
Non-controlling interests(1,387)(1,387)
Total equity$224,096 $180,983 
Total liabilities and equity$707,858 $649,141 
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
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JUSHI HOLDINGS INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands of U.S. dollars, except share and per share amounts)
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
REVENUE, NET$72,757 $47,744 $134,645 $89,419 
COST OF GOODS SOLD(46,089)(26,126)(88,865)(49,060)
GROSS PROFIT$26,668 $21,618 $45,780 $40,359 
OPERATING EXPENSES$38,745 $26,357 $76,458 $48,268 
LOSS FROM OPERATIONS$(12,077)$(4,739)$(30,678)$(7,909)
OTHER INCOME (EXPENSE):
Interest expense, net $(10,947)$(6,868)$(21,063)$(13,703)
Fair value gains on derivatives42,572 21,098 56,881 11,741 
Other, net228 (487)(70)(3,864)
Total other income (expense), net$31,853 $13,743 $35,748 $(5,826)
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES$19,776 $9,004 $5,070 $(13,735)
Provision for income taxes(7,710)(6,368)(12,761)(14,679)
NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)$12,066 $2,636 $(7,691)$(28,414)
Net loss attributable to non-controlling interests— (190)— (365)
NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO JUSHI SHAREHOLDERS$12,066 $2,826 $(7,691)$(28,049)
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO JUSHI SHAREHOLDERS - BASIC$0.06 $0.02 $(0.04)$(0.17)
Weighted average shares outstanding - basic190,870,572 163,512,333 187,147,856 160,426,413 
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO JUSHI SHAREHOLDERS - DILUTED$(0.15)$(0.09)$(0.31)$(0.20)
Weighted average shares outstanding - diluted205,697,153 196,541,225 208,038,283 194,097,783 
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
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JUSHI HOLDINGS INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in thousands of U.S. dollars, except share amounts)
Number of SharesPaid-In CapitalAccumulated DeficitTotal Jushi Shareholders' EquityNon-Controlling InterestsTotal Equity
Super Voting SharesMultiple Voting SharesSubordinate Voting Shares
Balances - January 1, 2022— — 182,707,359 $424,788 $(242,418)$182,370 $(1,387)$180,983 
Private placement offerings— — 3,717,392 13,680 — 13,680 — 13,680 
Shares issued for Apothecarium acquisition— — 527,704 1,594 — 1,594 — 1,594 
Shares issued for restricted stock grants— — 5,952 — — — — — 
Shares issued upon exercise of warrants— — 2,676,303 9,693 — 9,693 — 9,693 
Shares issued upon exercise of stock options— — 93,915 — — — — — 
Share-based compensation— — — 6,964 — 6,964 — 6,964 
Net loss— — — — (19,757)(19,757)— (19,757)
Balances - March 31, 2022— — 189,728,625 $456,719 $(262,175)$194,544 $(1,387)$193,157 
Shares issued for NuLeaf acquisition— — 4,662,384 13,573 — 13,573 — 13,573 
Shares issued for service received— — 101,082 294 — 294 — 294 
Shares issued upon exercise of warrants— — 167,560 322 — 322 — 322 
Shares issued upon exercise of stock options— — 1,294 — — — — — 
Shares canceled upon forfeiture of non-vested restricted stock— — (7,813)— — — — — 
Share-based compensation— — — 4,684 — 4,684 — 4,684 
Net income— — — — 12,066 12,066 — 12,066 
Balances - June 30, 2022— — 194,653,132 $475,592 $(250,109)$225,483 $(1,387)$224,096 
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
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JUSHI HOLDINGS INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in thousands of U.S. dollars, except share amounts)
Number of SharesPaid-In CapitalAccumulated DeficitTotal Jushi Shareholders' EquityNon-Controlling InterestsTotal Equity
Super Voting SharesMultiple Voting SharesSubordinate Voting Shares
Balances - January 1, 2021149,000 4,000,000 132,396,064 $262,145 $(262,669)$(524)$2,947 $2,423 
Public offerings— — 13,685,000 85,660 — 85,660 — 85,660 
Purchase of non-controlling interests— — 500,000 1,562 — 1,562 (1,562)— 
Shares issued for Grover Beach acquisition— — 49,348 368 — 368 — 368 
Shares issued upon exercise of warrants— — 3,898,180 13,135 — 13,135 — 13,135 
Shares issued upon exercise of stock options— — 15,000 30 — 30 — 30 
Share-based compensation— — — 4,013 — 4,013 — 4,013 
Net loss— — — — (30,876)(30,876)(175)(31,051)
Balances - March 31, 2021149,000 4,000,000 150,543,592 $366,913 $(293,545)$73,368 $1,210 $74,578 
Shares issued for restricted stock grants— — 34,815 — — — — — 
Shares issued upon exercise of warrants— — 1,476,869 3,144 — 3,144 — 3,144 
Shares issued upon exercise of stock options— — 14,173 20 — 20 — 20 
Share-based compensation— — — 2,733 — 2,733 — 2,733 
Net income (loss)— — — — 2,826 2,826 (190)2,636 
Balances - June 30, 2021149,000 4,000,000 152,069,449 $372,810 $(290,719)$82,091 $1,020 $83,111 
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
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JUSHI HOLDINGS INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
Six Months Ended
June 30,
20222021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(7,691)$(28,414)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization, including amounts in cost of goods sold7,603 3,057 
Share-based compensation11,648 6,747 
Fair value changes in derivatives(56,881)(11,741)
Non-cash interest expense, including amortization of deferred financing costs10,402 7,672 
Deferred income taxes(2,133)(652)
Loss on debt modification/extinguishment/redemption— 3,815 
Gain on investments and financial assets— (1,191)
Other non-cash items, net(60)(929)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable442 (119)
Prepaid expenses and other current assets(491)(1,264)
Inventory7,533 (9,029)
Accounts payable, accrued expenses and other current liabilities3,593 18,664 
Other assets324 247 
Net cash flows used in operating activities$(25,711)$(13,137)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for acquisitions, net of cash acquired$(20,824)$(5,160)
Payments for property, plant and equipment(40,917)(41,483)
Proceeds from investments and financial asset— 3,252 
Net cash flows used in investing activities$(61,741)$(43,391)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of shares for cash, net$13,680 $85,660 
Proceeds from exercise of warrants and options751 12,981 
Proceeds from acquisition facility, net of financing costs of $793
24,207 — 
  Redemptions of senior notes (including related party redemptions of $8 and $3,072 for
  six months ended June 30, 2022 and 2021, respectively)
(258)(8,134)
Payments on promissory notes— (1,500)
(Payments) receipts on finance leases, net of tenant allowance of $10,065 and $4,738 for the six months ended June 30, 2022 and 2021, respectively
(6,555)364 
Proceeds from other debt4,353 2,313 
Repayments of other debt(164)— 
Net cash flows provided by financing activities$36,014 $91,684 
Effect of currency translation on cash and cash equivalents(238)(132)
NET CHANGE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH$(51,676)$35,024 
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD95,487 85,857 
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD$43,811 $120,881 
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JUSHI HOLDINGS INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
Six Months Ended
June 30,
20222021
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest (excluding capitalized interest)$10,699 $6,215 
Cash paid for income taxes$8,542 $5,699 
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Capital expenditures$7,453 $2,846 
Right of use assets from finance lease liabilities (excluding from acquisitions), net of tenant allowance receivable of $0 and $8,007 for the six months ended June 30, 2022 and 2021, respectively (2021, as restated, see Note 2)
$4,701 $42,697 
Fair value of note obligations from acquisitions and acquisitions of non-controlling interests$19,782 $2,429 
Fair value of shares issued for acquisitions and acquisitions of non-controlling interests$15,167 $368 
Debt and equity issued for services received$634 $— 
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
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JUSHI HOLDINGS INC.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in Thousands of United States Dollars, Unless Otherwise Stated)
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 1. NATURE OF OPERATIONS
Jushi Holdings Inc. (the “Company” or “Jushi”) is incorporated under the British Columbia’s Business Corporations Act. The Company is a vertically integrated, multi-state cannabis operator engaged in retail, distribution, cultivation, and processing operations in both medical and adult-use markets. As of June 30, 2022, Jushi, through its subsidiaries, owns or manages cannabis operations and/or holds licenses in the adult-use and/or medicinal cannabis marketplace in Illinois, Pennsylvania, Virginia, Massachusetts, Nevada, California and Ohio. The Company’s head office is located at 301 Yamato Road, Suite 3250, Boca Raton, Florida 33431, U.S.A., and its registered address is Suite 1700, Park Place, 666 Burrard Street, Vancouver, British Columbia V6C 2X8, Canada.
The Company is listed on the Canadian Securities Exchange (“CSE”) and trades its subordinate voting shares (“SVS”) under the ticker symbol “JUSH", and trades on the U.S. Over the Counter Stock Market (“OTCQX”) under the symbol JUSHF. The Company’s Registration Statement on Form S-1, initially filed with the U.S. Securities and Exchange Commission (“SEC”) on July 22, 2022, as amended, was declared effective by the SEC on August 12, 2022 (“S-1”).
 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Consolidation
The accompanying unaudited interim condensed consolidated financial statements present the consolidated financial position and operations of Jushi Holdings Inc. and its subsidiaries and entities over which the Company has control, in accordance with generally accepted accounting principles in the U.S. (“GAAP”) for interim financial information and in accordance with the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes. Actual results could differ materially from those estimates.
In the opinion of management, the unaudited interim condensed consolidated financial statements include all adjustments, of a normal recurring nature, that are necessary to present fairly the financial position, results of operations and cash flows of the Company for the periods, and at the dates, presented. The results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year.
These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2021, which is included in the Company’s S-1. Consolidated balance sheet information as of December 31, 2021 presented herein are derived from the Company’s audited consolidated financial statements for the year ended December 31, 2021.
These unaudited interim condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. GAAP requires an entity to look forward 12 months from the date the financial statements are issued, (the “look-forward” period) when assessing whether the going concern assumption can be used. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company’s ability to continue as a going concern exists.
As reflected in these unaudited interim condensed consolidated financial statements, the Company has incurred losses from operations for the six months ended June 30, 2022, and has an accumulated deficit of $250,109 as of June 30, 2022. As discussed in Note 9 - Debt, the Company’s 10% senior notes (the “Senior Notes”), which as of June 30, 2022 had an aggregate principal amount outstanding of $74,935, mature on January 15, 2023, and the Acquisition Facility, which as of June 30, 2022 had an outstanding balance of $65,000 (refer to Note 9 - Debt), required the Company to maintain certain covenants which the Company may not have been in compliance with if the court accepted Jushi Europe’s petition for bankruptcy. Prior to the amendment with the lender of the Acquisition Facility, the Company was also projected to violate
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JUSHI HOLDINGS INC.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in Thousands of United States Dollars, Unless Otherwise Stated)
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certain financial covenants. In April 2022, the Company entered into an amendment with the lender of the Acquisition Facility, which included a waiver related to Jushi Europe’s bankruptcy and a change to the terms of the Total Leverage Ratio, as defined in the Acquisition Facility agreement, and deferred the commencement date of leverage testing under the Acquisition Facility to the quarter ending March 31, 2023. Additionally, the overall slowdown in the cannabis industry during 2022 has resulted in lower forecasted earnings for the Company during the look-forward period. The look-forward period also contemplates favorable regulatory changes in certain states in which the Company operates. If the Company’s operating results during the look-forward period is not in line with forecasted earnings, the Company may be at risk of not meeting its financial covenants under the Acquisition Facility, as amended. These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern during the look-forward period.
The Company is pursuing strategies to obtain the required additional funding primarily to fund the Senior Notes and future operations. These strategies may include, but are not limited to: (i) ongoing efforts with various lenders to refinance the Senior Notes, including the renegotiation of the financial covenants under the Acquisition Facility, as amended; (ii) deferral of certain expenditures, including capital projects, and reallocate funds for debt repayment, if the need arose; (iii) alternative sources of debt and equity financing, including secured borrowings and through a base shelf prospectus, which allows the Company to offer up to C$500,000 in securities in Canada through the end of 2023. However, there can be no assurance that the Company will be able to refinance the Senior Notes, renegotiate the financial covenants under the Acquisition Facility, as amended, generate positive results from operations, or obtain additional liquidity when needed or under acceptable terms, if at all.
Correction of Errors in Previously Issued Financial Statements
Restatement
Subsequent to the filing of the Company’s unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2022, which were not previously reviewed by the Company’s auditors, with the applicable Canadian securities regulatory authorities on August 29, 2022 in accordance with applicable Canadian securities laws and may be accessed at www.sedar.com, the Company identified that there was a data input error in the amount of right of use assets from finance lease liabilities (excluding from acquisitions) disclosed in non-cash investing and financing activities of the statements of cash flows. The Company corrected the error as follows:
Six months ended June 30, 2021
As Previously ReportedAs Restated
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Right of use assets from finance lease liabilities (excluding from acquisitions), net of tenant allowance receivable$2,050 $42,697 
Revisions
The Company revised the unaudited interim condensed consolidated statement of cash flows for the six months ended June 30, 2022 as follows:
Six months ended June 30, 2022
As Previously ReportedAs Revised
CASH FLOWS FROM OPERATING ACTIVITIES:
Changes in operating assets and liabilities, net of acquisitions:
Accounts payable, accrued expenses and other current liabilities$1,566 $3,593 
Net cash flows used in operating activities$(27,738)$(25,711)
CASH FLOWS FROM FINANCING ACTIVITIES:
(Payments) receipts on finance leases, net of tenant allowance
$(4,528)$(6,555)
Net cash flows provided by financing activities$38,041 $36,014 
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JUSHI HOLDINGS INC.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in Thousands of United States Dollars, Unless Otherwise Stated)
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For the unaudited interim condensed consolidated statement of cash flows for the six months ended June 30, 2022, the Company removed the information regarding assets acquired and liabilities assumed in acquisitions within the non-cash investing and financing activities since such information were inconsistent and redundant to the information already disclosed in Note 7 - Acquisitions.
The Company revised the unaudited interim condensed consolidated financial statements for the impact of an understatement of cost of goods sold of $1,144 ($801 post-tax) during the three and six months ended June 30, 2021 as follows:
A. Unaudited Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
Three Months Ended June 30, 2021Six Months Ended June 30, 2021
As Previously ReportedAs RevisedAs Previously ReportedAs Revised
COST OF GOODS SOLD$(24,982)$(26,126)$(47,916)$(49,060)
GROSS PROFIT$22,762 $21,618 $41,503 $40,359 
LOSS FROM OPERATIONS$(3,595)$(4,739)$(6,765)$(7,909)
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES$10,148 $9,004 $(12,591)$(13,735)
Provision for income taxes$(6,711)$(6,368)$(15,022)$(14,679)
NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)$3,437 $2,636 $(27,613)$(28,414)
NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO JUSHI SHAREHOLDERS$3,627 $2,826 $(27,248)$(28,049)
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO JUSHI SHAREHOLDERS - DILUTEDno changeno change$(0.19)$(0.20)
B. Unaudited Interim Condensed Consolidated Statements of Changes in Equity
Accumulated DeficitTotal Jushi Shareholders' EquityTotal Equity
As Previously ReportedAs RevisedAs Previously ReportedAs RevisedAs Previously ReportedAs Revised
Net income (loss) for the three months ended June 30, 2021$3,627 $2,826 $3,627 $2,826 $3,437 $2,636 
Balances - June 30, 2021$(289,918)$(290,719)$82,892 $82,091 $83,911 $83,111 
C. Unaudited Interim Condensed Consolidated Statement of Cash Flows
Six months ended June 30, 2021
As Previously ReportedAs Revised
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(27,613)$(28,414)
Changes in operating assets and liabilities, net of acquisitions:
Inventory$(10,173)$(9,029)
Accounts payable, accrued expenses and other current liabilities$19,007 $18,664 
D. Note 7 - Business Combinations Acquisition Results and Unaudited Supplemental Pro Forma Financial Information
Three Months Ended June 30, 2021Six Months Ended June 30, 2021
As Previously ReportedAs RevisedAs Previously ReportedAs Revised
Net income (loss)$661 $(140)$(32,311)$(33,112)
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JUSHI HOLDINGS INC.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in Thousands of United States Dollars, Unless Otherwise Stated)
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E. Note 14 - Income Taxes
Three Months Ended June 30, 2021Six Months Ended June 30, 2021
As Previously ReportedAs RevisedAs Previously ReportedAs Revised
Income (Loss) Before Income Taxes$10,148 $9,004 $(12,591)$(13,735)
Income Tax Expense$(6,711)$(6,368)$(15,022)$(14,679)
Effective Tax Rate66 %71 %(119)%(107)%
F. Note 16 - Earning (Loss) Per Share
Three Months Ended June 30, 2021Six Months Ended June 30, 2021
As Previously ReportedAs RevisedAs Previously ReportedAs Revised
Numerator:
Net income (loss) and comprehensive income (loss) attributable to Jushi shareholders$3,627 $2,826 $(27,248)$(28,049)
Less undistributed net income (loss) for participating securities$(135)$(105)$274 $282 
Net income(loss) and comprehensive income (loss) - basic$3,492 $2,721 $(26,974)$(27,767)
Add-back undistributed net income (loss) for participating securities$135 $105 $(274)$(282)
Less undistributed net income (loss) for participating securities$(113)$(88)$933 $961 
Net loss and comprehensive loss attributable to Jushi shareholders - diluted$(17,547)$(18,324)$(37,419)$(38,192)
Net income (loss) per common share attributable to Jushi:
Dilutedno changeno change$(0.19)$(0.20)
The Company revised the unaudited interim condensed consolidated statement of cash flows for the six months ended June 30, 2021 for the amount of capital expenditures disclosed in non-cash investing and financing activities of the statements of cash flows as follows:
Six months ended June 30, 2021
As Previously ReportedAs Revised
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Capital expenditures$2,057 $2,846 
Reclassifications
Within the supplemental non-cash investing and financing activities section of the statements of cash flows, the Company reclassified $4,701 from capital expenditures to right of use assets from finance lease liabilities (excluding from acquisitions) for the six months ended June 30, 2022. This reclassification did not have an effect on total assets, total liabilities, equity, net income (loss), net income (loss) per share or cash flows for the periods presented.

Summary of Significant Accounting Policies
The Company’s significant accounting policies are described in Note 2 in the audited consolidated financial statements and notes thereto for the year ended December 31, 2021, which is included in the Company’s S-1. There have been no material changes to the Company’s significant accounting policies

Segment
The Company operates a vertically integrated cannabis business in one reportable segment for the cultivation,
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Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in Thousands of United States Dollars, Unless Otherwise Stated)
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manufacturing, distribution and sale of cannabis in the U.S. All revenues for the three and six months ended June 30, 2022 and 2021 were generated within the U.S., and substantially all long-lived assets are located within the U.S.
COVID-19
During the three and six months ended June 30, 2022, the Company’s financial condition and results of operations were not materially impacted by COVID-19. The extent to which the COVID-19 pandemic impacts the Company’s future results will depend on future developments, which are highly uncertain and cannot be predicted with certainty, including possible future outbreaks of new strains of the virus and governmental and consumer responses to such future developments.
Emerging Growth Company
As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act until such time the Company is no longer considered to be an EGC. The adoption dates discussed below reflect this election.
Recent Accounting Pronouncements
In June 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06 Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. This ASU also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and simplifies the diluted earnings per share calculation in certain areas. The amendments in this ASU are effective for annual and interim periods beginning after December 15, 2023, although early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on its consolidated financial statements.
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. The FASB issued guidance to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments in this ASU are effective for annual and interim periods beginning after December 15, 2021. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements.
In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The FASB issued guidance requires that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. To achieve this, an acquirer may assess how the acquiree applied Topic 606 to determine what to record for the acquired revenue contracts. Generally, this should result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements (if the acquiree prepared financial statements in accordance with generally accepted accounting principles). The amendments in this ASU are effective for annual and interim periods beginning after December 15, 2023, although early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on its consolidated financial statements.
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JUSHI HOLDINGS INC.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in Thousands of United States Dollars, Unless Otherwise Stated)
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In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The FASB issued guidance clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The amendments in this ASU are effective for annual and interim periods beginning after December 15, 2023, although early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on its consolidated financial statements.
 3. REVENUE
The Company has three revenue streams: (i) cannabis retail (ii) cannabis wholesale; and (iii) other. The Company’s retail revenues are comprised of cannabis operations for medical and adult-use dispensaries. The Company’s wholesale revenues are comprised of cannabis cultivation, processing, production and distribution of cannabis for medical and adult-use. The Company’s other operations primarily include the Company’s hemp/cannabidiol (“CBD”) retail operations. Any intercompany revenue and any costs between entities are eliminated to arrive at consolidated totals.
The following table summarizes revenue disaggregated by revenue stream:
Three Months Ended June 30,
20222021
Gross RevenueIntercompany RevenueRevenue, net to External CustomersGross RevenueIntercompany RevenueRevenue, net to External Customers
Retail cannabis$67,276 $— $67,276 $45,198 $— $45,198 
Wholesale cannabis15,862 (10,395)5,467 4,740 (2,300)2,440 
Other14 — 14 106 — 106 
Eliminations(10,395)10,395 — (2,300)2,300 — 
  Consolidated revenue$72,757 $— $72,757 $47,744 $— $47,744 
Six Months Ended June 30,
20222021
Gross RevenueIntercompany RevenueRevenue, net to External CustomersGross RevenueIntercompany RevenueRevenue, net to External Customers
Retail cannabis$125,230 $— $125,230 $84,474 $— $84,474 
Wholesale cannabis25,305 (15,989)9,316 8,932 (4,183)4,749 
Other99 — 99 196 — 196 
Eliminations(15,989)15,989 — (4,183)4,183 — 
  Consolidated revenue$134,645 $— $134,645 $89,419 $— $89,419 

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JUSHI HOLDINGS INC.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in Thousands of United States Dollars, Unless Otherwise Stated)
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 4. INVENTORIES
The components of inventories, net, are as follows:
June 30, 2022 (unaudited)December 31, 2021
Cannabis plants$3,613 $6,347 
Harvested cannabis and packaging13,704 5,180 
Total raw materials$17,317 $11,527 
Work in process6,639 8,756 
Finished goods20,786 23,036 
Total inventories, net$44,742 $43,319 
 5. PREPAID EXPENSES AND OTHER CURRENT ASSETS
The components of prepaid expenses and other current assets are as follows:
June 30, 2022 (unaudited)December 31, 2021
Prepaid expenses and deposits$4,548 $3,837 
Landlord receivables for reimbursement of certain expenditures— 7,357 
Other current assets1,990 1,681 
Total prepaid expenses and other current assets$6,538 $12,875 
 6. PROPERTY, PLANT AND EQUIPMENT
The components of property, plant and equipment (PP&E) are as follows:
June 30, 2022 (unaudited)December 31, 2021
Buildings and building components$75,857 $49,697 
Land14,167 12,380 
Leasehold improvements32,747 24,042 
Machinery and equipment15,832 12,656 
Computer equipment2,898 2,221 
Furniture and fixtures12,377 8,000 
Construction-in-process34,298 35,625 
Total property, plant and equipment - gross$188,176 $144,621 
Less: Accumulated depreciation(13,584)(7,341)
Total property, plant and equipment - net$174,592 $137,280 
Construction-in-process represents assets under construction for manufacturing and retail build-outs not yet ready for use.
Total depreciation for the three months ended June 30, 2022 and 2021, was $5,014 and $1,734, respectively, of which $2,778 and $870, respectively, was absorbed into inventory production. Total depreciation for the six months ended June 30, 2022 and 2021 was $8,704 and $2,904, respectively, of which $4,946 and $1,474, respectively, was absorbed into inventory production. Total depreciation includes depreciation from assets held under finance leases (which are reflected separately in the consolidated balance sheets).
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Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in Thousands of United States Dollars, Unless Otherwise Stated)
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Interest expense capitalized to PP&E totaled $1,303 and $155 for the three months ended June 30, 2022 and 2021, respectively, and $2,047 and $240 for the six months ended June 30, 2022 and 2021, respectively.
 7. ACQUISITIONS
2022 Business Combinations
The Company had the following acquisitions during the six months ended June 30, 2022: (i) Apothecarium; and (ii) NuLeaf (all defined below). The following table summarizes the preliminary purchase price allocations as of their respective acquisition dates:
NuLeafApothecariumTotal
Assets Acquired:
Cash and cash equivalents$618 $25 $643 
Prepaids and other assets273 32 305 
Accounts receivable, net39 — 39 
Inventory5,791 699 6,490 
Indemnification assets (1)
4,145 — 4,145 
Property, plant and equipment5,513 498 6,011 
Right-of-use assets - finance lease4,598 2,553 7,151 
Right-of-use assets - operating lease1,067 — 1,067 
Intangible assets (2)
17,440 8,200 25,640 
Deposits110 301 411 
Total assets acquired$39,594 $12,308 $51,902 
Liabilities Assumed:
Accounts payable and accrued liabilities$604 $502 $1,106 
Finance lease obligations4,598 2,544 7,142 
Operating lease obligations1,067 — 1,067 
Deferred tax liabilities10,247 2,601 12,848 
Total liabilities assumed$16,516 $5,647 $22,163 
Net assets acquired$23,078 $6,661 $29,739 
Goodwill (3)
27,262 8,472 35,734 
Total$50,340 $15,133 $65,473 
Consideration:
Consideration paid in cash, as adjusted for working capital adjustments$14,850 $6,617 $21,467 
Consideration payable in cash (customary hold back)1,000 — 1,000 
Consideration paid in promissory notes (fair value) (4)
12,860 6,922 19,782 
Consideration paid in shares13,573 1,594 15,167 
Contingent consideration8,057 — 8,057 
Fair value of consideration$50,340 $15,133 $65,473 
(1)As part of the NuLeaf acquisition agreement, the sellers contractually agreed to indemnify the Company for certain amounts that may become payable, including for taxes that relate to periods prior to the date of acquisition. Accordingly, the Company recorded indemnification assets and corresponding estimated accrued tax liabilities, at fair value, for a total of $4,145 as of the date of the acquisition. Subsequent changes in the amounts recognized for the indemnification assets may occur in relation to the
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JUSHI HOLDINGS INC.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in Thousands of United States Dollars, Unless Otherwise Stated)
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provision for the corresponding tax liabilities, according to changes in the range of outcomes or the assumptions used to develop the estimates of the liabilities at the time of the acquisition
(2)Included licenses acquired of $14,700 and $8,200 for NuLeaf and Apothecarium, respectively, which have indefinite useful lives. The estimated fair values of the licenses were determined using the multi-period excess earnings method under the income approach based on projections extended to 2036 assuming revenue growth rates of 7.5%, in 2023, 1% in 2024, 2% in 2025 and 3% thereafter for NuLeaf and 5.3% in 2023 and 3% thereafter for Apothecarium.
(3)The goodwill recognized from the acquisitions is attributable to synergies expected from integrating the acquired businesses into the Company’s existing business. The goodwill acquired is not deductible for tax purposes. The change in Goodwill for the six months ended June 30, 2022 is entirely attributable to the acquisitions.
(4)Refer to “Acquisition-Related Promissory Notes” in Note 9 - Debt for details on the seller notes.
NuLeaf
In April 2022, the Company closed on the acquisition of 100% of NuLeaf Inc., NuLeaf CLV Inc. and their subsidiaries (collectively, “NuLeaf”). The Company paid upfront consideration comprised of $14,850 in cash, subject to working capital adjustments, 4,662,384 SVS (with an acquisition date fair value of $2.91 per SVS), and an unsecured five-year note with a face value of $15,750. Additionally, cash consideration of $1,000 was subjected to customary holdbacks at closing. The Company was required to pay an additional $10,000 ($3,000 in cash, $3,000 as an addition to the five-year note and the balance in shares) contingent on the opening of a third retail dispensary. In June 2022, the Company opened the third retail dispensary, and in July 2022, the Company paid $3,000 in cash, amended the five-year note for an additional face value of $3,000 and issued 888,880 SVS to settle the contingent liability.
As of June 30, 2022, the Company remeasured the contingent consideration and recognized a gain of $1,326, primarily related to the change in the Company’s stock price. The remeasurement reduced the total contingent consideration liability from $8,057 on the acquisition date to $6,731 on June 30, 2022 and is included within accrued expenses and other current liabilities.
Apothecarium
In March 2022, the Company closed on the acquisition of 100% of the equity interest of an entity operating an adult-use and medical retail dispensary under the name, “The Apothecarium” in Las Vegas, Nevada (“Apothecarium”), for upfront consideration comprised of $6,617 in cash, net of working capital adjustments, 527,704 SVS (with a grant date fair value of $3.02 each), and an unsecured five-year note with a face value of $9,853. Refer to Note 9 - Debt for details on the seller notes. The Apothecarium acquisition, together with the prior acquisition of Franklin Bioscience NV, LLC, a holder of medical and adult-use cannabis cultivation, processing, and distribution licenses, enables the Company to become vertically integrated in Nevada, as well as provide significant branding exposure for Jushi’s high-quality product lines.
In addition, the Company may pay up to $2,000 in potential earn-out consideration based on the achievement of certain financial metrics. As of the date of acquisition and June 30, 2022, the Company has not recognized a contingent consideration liability for this acquisition as the probability is unlikely. The estimated range of such potential additional consideration is between $0 and $2,000.
Preliminary Purchase Price Allocations for 2022 Business Combinations
The consideration has been allocated to the estimated fair values of the assets acquired and liabilities assumed at the dates of the acquisitions and remain preliminary as of June 30, 2022. These estimated fair values involve significant judgement and estimates. The primary area of judgement involves the valuation of the business licenses acquired, which requires management to estimate value based on future cash flows from these assets. The primary areas of the preliminary purchase price allocations that are not yet finalized relate to: licenses acquired, inventories, property, plant and equipment, leases, contingent consideration, promissory notes, deferred tax liabilities, and residual goodwill. The Company expects to continue to obtain information to assist in determining the fair value of the net assets acquired at the acquisition date
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Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in Thousands of United States Dollars, Unless Otherwise Stated)
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during the measurement period.
Business Combinations - Acquisition and Deal Costs
For the three and six months ended June 30, 2022, acquisition and deal costs relating to Apothecarium and NuLeaf totaled $1,109 and $1,260, respectively, and are included within operating expenses in the consolidated statements of operations and comprehensive income (loss). The remaining acquisition and deal costs included in operating expenses were incurred either for acquisitions not completed or not expected to be completed.
2021 Business Combinations and Asset Acquisitions
The Company had the following acquisitions during the year ended December 31, 2021: (i) Nature’s Remedy; (ii) OSD; (iii) OhiGrow; and (iv) Grover Beach (all defined below). The following table summarizes the purchase price allocations as of their respective acquisition dates:
Business CombinationsAsset Acquisitions
Nature’s RemedyOSDOhiGrowGrover BeachTotal
Assets Acquired:
Cash and cash equivalents$3,195 $259 $— $— $3,454 
Prepaids325 53 — — 378 
Accounts receivable, net263 — — — 263 
Inventory15,882 184 — — 16,066 
Indemnification assets (1)
1,322 1,411 — — 2,733 
Property, plant and equipment19,470 — 3,165 269 22,904 
Right-of-use assets - finance leases27,305 — — 2,050 29,355 
Right-of-use assets - operating leases1,337 1,859 — — 3,196 
Intangible assets - license (2)
46,000 2,160 1,817 3,654 53,631 
Intangible assets - tradenames (2)
4,400 — — — 4,400 
Intangible assets - customer database (2)
2,100 — — — 2,100 
Deposits20 — 19 45 
  Total assets acquired $121,619 $5,932 $4,982 $5,992 $138,525 
Liabilities Assumed:
Accounts payable and accrued liabilities$7,004 $1,601 $— $— $8,605 
Finance lease obligations27,052 — — 2,032 29,084 
Operating lease obligations1,267 1,859 — — 3,126 
Deferred tax liabilities19,876 648 — — 20,524 
Total liabilities assumed$55,199 $4,108 $— $2,032 $61,339 
Net assets acquired$66,420 $1,824 $4,982 $3,960 $77,186 
Goodwill33,178 2,432 — — 35,610 
Total$99,598 $4,256 $4,982 $3,960 $112,796 
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JUSHI HOLDINGS INC.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in Thousands of United States Dollars, Unless Otherwise Stated)
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Business CombinationsAsset Acquisitions
Nature’s RemedyOSDOhiGrowGrover BeachTotal
Consideration:
Consideration paid in cash, as adjusted for working capital adjustments$40,360 $1,827 $4,949 $3,592 $50,728 
Consideration paid in promissory notes (fair value) 15,345 2,429 — — 17,774 
Consideration paid in shares35,670 — — 368 36,038 
Contingent consideration8,223 — — — 8,223 
Capitalized costs— — 33 — 33 
  Fair value of consideration$99,598 $4,256 $4,982 $3,960 $112,796 
(1)     As part of the OSD and Nature’s Remedy acquisition agreements, the sellers contractually agreed to indemnify the Company for certain amounts that may become payable, including for taxes that relate to periods prior to the date of acquisition. Accordingly, the Company recorded indemnification assets and corresponding estimated accrued tax liabilities, at fair value, for a total of $2,733 as of the dates of the acquisitions. The range of total estimated potential indemnification assets is from $0 to $6,322; however, there is no limit on the Nature’s Remedy indemnification asset. Additional subsequent changes in the amounts recognized for the indemnification assets may occur in relation to the provision for the corresponding tax liabilities, according to changes in the range of outcomes or the assumptions used to develop the estimates of the liabilities at the time of the acquisition.
(2)     The licenses acquired have indefinite useful lives. The customer relationships have a useful life of 15 years and the tradenames have a useful life of 5 years.
2021 Business Combinations
Nature’s Remedy
On September 10, 2021, the Company acquired 100% of the equity of Nature’s Remedy of Massachusetts, Inc. and certain of its affiliates (collectively, “Nature’s Remedy”), for upfront consideration comprised of cash, net of working capital adjustments, 8,700,000 SVS (with a grant date fair value of $4.10 each), an $11,500 unsecured three-year note and a $5,000 unsecured five-year note.
Nature’s Remedy is a vertically integrated single state operator in Massachusetts and currently operates two retail dispensaries, in Millbury, MA and Tyngsborough, MA, and a 50,000 sq. ft. cultivation and production facility in Lakeville, MA. The goodwill is not tax deductible.
The Company also agreed to issue a $5,000 increase to the principal balance of the three-year note and up to an additional $5,000 in Company SVS upon the occurrence or non-occurrence of certain events after the closing date. The payment of the contingent consideration depends on whether or not a competitor opens a competing dispensary within a certain radius of the Company’s dispensary in the Town of Tyngsborough, MA during the first 12 months following the acquisition (The “First Milestone Period”) or during the 18 months following the end of the First Milestone Period. As of the date of acquisition, the Company recognized a contingent consideration liability of $8,223, a Level 3 measurement amount, which was based on the weighted-average probability of the potential outcomes. The estimated range of such additional consideration is between $0 and $10,800 (which also includes the interest on the additional principal for the three-year note). Contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred for the business combination. Contingent consideration that is classified as a liability is remeasured at subsequent reporting dates with the corresponding gain or loss being recognized in Other, net in the consolidated statements of operations and comprehensive income (loss).
As of June 30, 2022, the Company remeasured the contingent consideration and increased the total liability, primarily related to accretion from $8,223 on December 31, 2021, to $8,871 on June 30, 2022. The Company utilized the cash flows associated with the weighted-average probability of the potential outcomes to determine the potential cash outflows that
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Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in Thousands of United States Dollars, Unless Otherwise Stated)
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are short-term vs. long-term. As a result, the Company classified $1,828 as a short-term contingent liability and $7,043 as a long-term contingent liability as of June 30, 2022.
OSD
On April 30, 2021, the Company acquired 100% of the equity of Organic Solutions of the Desert, LLC (“OSD”), an operating dispensary located in Palm Springs, California, for consideration comprised of cash, as adjusted for working capital adjustments, and $3,100 principal amount of promissory notes. Refer to “Promissory Notes Payable” in Note 9 - Debt for details on the seller notes. The goodwill is not tax deductible.
Preliminary Purchase Price Allocations for 2021 Business Combinations
The consideration for Nature’s Remedy has been allocated to the estimated fair values of the assets acquired and liabilities assumed at the dates of the acquisitions and remain preliminary as of June 30, 2022. These estimated fair values involve significant judgement and estimates. The primary areas of judgement involved are the valuation of the intangible assets acquired, which requires management to estimate value based on future cash flows from these assets. The primary areas of the preliminary purchase price allocations that are not yet finalized relate to: intangible assets acquired, property, plant and equipment, indemnification assets, contingent consideration, deferred tax liabilities, and residual goodwill. The Company expects to continue to obtain information to assist in determining the fair value of the net assets acquired as of the respective acquisition dates during the measurement period.
2021 Asset Acquisitions
The Company determined that the OhiGrow and Grover Beach acquisitions described below did not qualify as business combinations because, for OhiGrow, the assets acquired did not constitute a business, and for Grover Beach, under the concentration test, substantially all of the fair value of the acquisition is concentrated in a single identifiable asset – the license.
OhiGrow
In July 2021, the Company acquired OhiGrow, LLC, a licensed cultivator in Ohio, and Ohio Green Grow LLC (collectively, “OhiGrow”), inclusive of an approximately 10,000 sq. ft. facility and 1.35 acres of land for $4,949 in cash.
Grover Beach
On March 4, 2021, the Company closed on the acquisition of approximately 78% of the equity of a retail license holder located in Grover Beach, California (“Grover Beach”) for $3,592 in cash, as adjusted for working capital adjustments, and 49,348 SVS at a fair value of $7.46 per share, with the rights to acquire the remaining equity for one dollar in the future. On September 9, 2022, the Company exercised its rights to acquire the remaining 22%.
Business Combinations Acquisition Results and Unaudited Supplemental Pro Forma Financial Information
The following table summarizes consolidated proforma revenue and consolidated proforma net income (loss) as if the business combinations had occurred at the beginning of the year prior to their actual acquisition for the periods presented:
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Revenue$73,149 $69,472 $144,309 $132,259 
Net income (loss)$12,712 $(140)$(4,636)$(33,112)
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JUSHI HOLDINGS INC.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in Thousands of United States Dollars, Unless Otherwise Stated)
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These unaudited pro forma financial results do not purport to be indicative of the actual results that would have been achieved by the combined companies for the years indicated, or of the results that may be achieved by the combined companies in the future. These amounts have been calculated using actual results and adding pre-acquisition results, after adjusting for: acquisition costs, additional depreciation and amortization from acquired property, plant and equipment and intangible assets, as well as adjustments for incremental interest expense relating to consideration paid, and changes to conform to the Company’s accounting policies.
The results of Apothecarium and NuLeaf are included in the Company’s results since their respective acquisition date. For the three and six months ended June 30, 2022, in the aggregate, Apothecarium and NuLeaf, contributed revenues of $9,008 and $9,564, respectively, and net loss of ($740) and ($811), respectively, to the Company’s consolidated results.
 8. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
The components of accrued expenses and other current liabilities are as follows:
June 30, 2022 (unaudited)December 31, 2021
Accrued capital expenditures$12,154 $17,599 
Goods received not invoiced6,846 8,007 
Accrued employee related expenses and liabilities6,074 6,062 
Accrued professional and management fees1,856 5,139 
Accrued sales and excise taxes1,566 2,535 
Accrued interest 2,173 1,181 
Deferred revenue (loyalty program)1,910 1,427 
Operating lease obligations - current portion2,829 2,745 
Contingent consideration liabilities - current portion(1)
8,560 — 
Other accrued expenses and current liabilities5,206 3,277 
Total$49,174 $47,972 
(1)Refer to Note 7 - Acquisitions.
 9. DEBT
The components of the Company’s debt are as follows:
Effective Interest RateMaturity DateJune 30, 2022December 31, 2021
Principal amounts:
Senior Notes37%January 2023$74,935 $75,193 
Acquisition Facility14%October 202665,000 40,000 
Acquisition-related promissory notes payable
7% - 24%
November 2022 - April 2027
51,583 25,767 
Other debt (1)
6% - 12%
March 2022 - July 2050
15,876 11,728 
Total debt - principal amounts$207,394 $152,688 
Less: debt issuance costs and original issue discounts(21,397)(23,536)
Total debt - carrying amounts$185,997 $129,152 
Debt - current portion$70,322 $6,181 
Debt - non-current portion$115,675 $122,971 
(1) Includes Jushi Europe debt. Refer to Note 15 - Non-Controlling Interests.
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JUSHI HOLDINGS INC.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in Thousands of United States Dollars, Unless Otherwise Stated)
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As of June 30, 2022, aggregate future contractual maturities of the Company’s debt are as follows:
Remainder of the year2023202420252026ThereafterTotal
Senior Notes$— $74,935 $— $— $— $— $74,935 
Acquisition Facility— — 4,875 6,500 53,625 — 65,000 
Acquisition-related promissory notes payable (1)
2,412 3,448 17,385 1,971 6,970 19,397 51,583 
Other debt4,095 589 100 107 4,616 6,369 15,876 
Total$6,507 $78,972 $22,360 $8,578 $65,211 $25,766 $207,394 
(1) The Promissory Note that matures in 2022 is a mandatorily convertible note that will be settled in 910,000 SVS.
Interest expense, net is comprised of the following:
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Interest and accretion - Senior Notes$5,838 $4,371 $11,236 $9,574 
Interest - Finance lease liabilities3,013 2,297 5,914 3,687 
Interest and accretion - Promissory notes1,347 302 2,084 614 
Interest and accretion - Acquisition Facility1,854 — 3,294 — 
Interest and accretion - Other debt221 140 620 252 
Capitalized interest(1,303)(155)(2,047)(240)
Total interest expense$10,970 $6,955 $21,101 $13,887 
Interest income(23)(87)(38)(184)
Total interest expense, net$10,947 $6,868 $21,063 $13,703 
Other Debt - PAMS Sale-leaseback Transactions
During 2021, the Company acquired land and buildings that are adjacent to the Company’s Pennsylvania Medical Solutions, LLC (“PAMS”) cultivation facility in order to expand the facility. In February 2022, the Company then closed on the sale of such land and buildings for $3,265 to the landlord of the Company’s cultivation facility. Also, in February 2022, the Company entered into a leaseback agreement with the landlord. The Company concluded that control, including the significant risks and rewards of ownership, did not transfer to the buyer-lessor at the inception of the sale-leaseback transaction. Accordingly, the transaction did not meet the accounting criteria for a successful sale-leaseback transaction and therefore represents a financing obligation with a lease term ending in April 2048. As a result, the Company recognized a liability of $3,265, which will be amortized as a reduction of rental expense over the term of the failed lease using an incremental borrowing rate of 11.6%.
Unsecured Promissory Notes

Apothecarium
In March 2022, in connection with the Apothecarium acquisition, the Company issued to the seller two unsecured promissory notes with a total principal amount of $9,853, with no stated interest and both maturing in March 2027. The promissory notes provide for a principal payment of $3,448 on the 21st month anniversary, followed by 39 equal monthly payments for the remaining balance.
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JUSHI HOLDINGS INC.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in Thousands of United States Dollars, Unless Otherwise Stated)
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NuLeaf
In April 2022, in connection with the NuLeaf acquisition, the Company issued to the seller unsecured promissory notes with an aggregate total principal amount of $15,750 with a stated interest rate of 8% and maturity date in April 2027. The promissory notes provide for a full principal payment on the maturity date.

Amendments to the Acquisition Facility
In April 2022, the Company entered into an amendment to the Acquisition Facility pursuant to which: (i) the commencement of leverage testing was pushed back by four quarters (now beginning March 31, 2023 as reflected in the table below), (ii) certain leverage ratios were revised; and (iii) the Company may proceed with a reorganization pursuant to a petition for bankruptcy in Switzerland with respect to Jushi Europe without potentially defaulting under the Acquisition Facility. Refer to Note 15 - Non-Controlling Interests for additional information on Jushi Europe.
Total Leverage Ratio, calculated as the ratio of Total Funded Indebtedness to EBITDAR (all such terms are defined in the Acquisition Facility agreement) not to exceed the correlative ratio below:
Applicable RatioFiscal Quarter Ending
6.00 to 1.00
March 31, 2023
5.00 to 1.00
June 30, 2023
4.00 to 1.00
September 30 and December 31, 2023
3.50 to 1.00
March 31, 2024 and all fiscal quarters ending thereafter
Additionally, in April 2022, the Company drew down $25,000 from the Acquisition Facility to fund the cash portions of the NuLeaf and Apothecarium acquisitions.
 10. LEASE OBLIGATIONS
The Company leases certain business facilities for corporate, retail and cultivation operations from third parties under lease agreements that specify minimum rentals. In addition, the Company leases certain equipment for use in cultivation and extraction activities. The Company determines whether a contract is or contains a lease at the inception of the contract. The expiry dates of the leases, including reasonably certain estimated renewal periods, are between 2022 and 2052. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The following table provides the components of lease cost recognized in the consolidated statements of operations and comprehensive income (loss) for the periods presented.
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Operating lease cost$914 $499 $1,800 $956 
Finance lease cost:
   Amortization of lease assets1,261 710 2,403 1,076 
   Interest on lease liabilities3,013 2,297 5,914 3,687 
 Total finance lease cost$4,274 $3,007 $8,317 $4,763 
Variable lease cost$89 $83 $182 $158 
Total lease cost$5,277 $3,589 $10,299 $5,877 

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JUSHI HOLDINGS INC.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in Thousands of United States Dollars, Unless Otherwise Stated)
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Other information related to operating and finance leases as of the balance sheet dates presented are as follows:
June 30, 2022December 31, 2021
(unaudited)
Finance LeasesOperating LeasesFinance LeasesOperating Leases
Weighted average discount rate11.71 %11.40 %11.75 %11.50 %
Weighted average remaining lease term (in years)22.113.822.614.6
The maturities of the contractual undiscounted lease liabilities as of June 30, 2022 are as follows:
Finance LeasesOperating Leases
Remainder of the year$8,718 $1,505 
202311,470 3,377 
202411,634 3,118 
202512,199 2,899 
202611,968 2,663 
Thereafter265,639 30,183 
$321,628 $43,745 
Interest on lease liabilities(215,466)(23,975)
Total present value of minimum lease payments$106,162 $19,770 
Lease liabilities - current portion$13,117 $2,829 
Lease liabilities - non-current$93,045 $16,941 
 11. DERIVATIVE LIABILITIES
The continuities of the Company’s derivative liabilities are as follows:
Total Derivative Liabilities (1)(3)
Carrying amounts as of January 1, 2022$92,435 
Fair value changes (2)
(56,881)
Derivative Warrants exercises(9,265)
Carrying amounts as of June 30, 2022$26,289 
(1)Refer to Note 12 - Equity for the continuity of the number of these warrants outstanding.
(2)Included in other income (expense), net in the consolidated statements of operations and comprehensive income (loss).
(3)Includes mandatory prepayment option on the Senior Notes, which had a fair value of $174 as of June 30, 2022.
The Company’s derivative liabilities are primarily comprised of derivative warrants. These are warrants to purchase SVS of the Company which were issued in connection with the Senior Notes (the “Derivative Warrants”), have an expiration date of December 23, 2024 and an exercise price of US$1.25. There were 36,616,355 and 40,124,355 Derivative Warrants outstanding as of June 30, 2022 and December 31, 2021, respectively. The Derivative Warrants may be net share settled.
These warrants are considered derivative financial liabilities measured at fair value with all gains or losses recognized in profit or loss as the settlement amount for the warrants may be adjusted during certain periods for variables that are not inputs to standard pricing models for forward or option equity contracts, i.e., the “fixed for fixed” criteria under ASC 815-40. The estimated fair value of the Derivative Warrants is measured at each reporting period and an adjustment is reflected in fair value changes in derivatives in the consolidated statements of operations and comprehensive income (loss). These are Level 3 recurring fair value measurements. The estimated fair value of the Derivative Warrants was determined using the Black-Scholes model with stock price based on the CSE closing price translated into U.S. dollar as
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JUSHI HOLDINGS INC.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in Thousands of United States Dollars, Unless Otherwise Stated)
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of June 30, 2022, and Monte Carlo simulation model with stock price based on the OTCQX Best Market closing price as of December 31, 2021. The assumptions used in the fair value calculations as of the balance sheet dates presented include the following:
June 30, 2022 (unaudited)December 31, 2021
Stock price$1.45$3.25
Risk-free annual interest rate2.95%0.97%
Range of estimated possible exercise price$1.25
$0.04 - $1.25
Volatility71%73%
Remaining life (years)2.48 years3 years
Forfeiture rate0%0%
Expected annual dividend yield0%0%
Volatility was estimated by using a weighting of the Company’s historical volatility and the average historical volatility of comparable companies from a representative peer group of publicly traded cannabis companies. The risk-free interest rate for the expected life of the Warrants was based on the yield available on government benchmark bonds with an approximate equivalent remaining term. The expected life is based on the contractual term. If any of the assumptions used in the calculation were to increase or decrease, this could result in a material or significant increase or decrease in the estimated fair value of the derivative liability. For example, the following table illustrates an increase or decrease in certain significant assumptions as of the balance sheet dates:
As of June 30, 2022As of December 31, 2021
(unaudited)
InputEffect of 10% IncreaseEffect of 10% DecreaseInputEffect of 10% IncreaseEffect of 10% Decrease
Stock price$1.45$4,124 $(3,984)$3.25$12,781 $(10,834)
Volatility71 %$1,728 $(1,776)73 %$4,473 $(3,210)
 12. EQUITY
Authorized, Issued and Outstanding
The authorized share capital of the Company consists of an unlimited number of Preferred Shares, SVS, Multiple Voting Shares, and Super Voting Shares. As of June 30, 2022, the Company had 194,653,132 SVS issued and outstanding and no Preferred Shares, Multiple Voting Shares, and Super Voting Shares issued and outstanding. On August 9, 2021, all of the 149,000 previously issued and outstanding Super Voting Shares and all of the 4,000,000 previously outstanding Multiple Voting Shares were converted into SVS in accordance with their terms as described in Jushi Holdings Inc.’s Articles of Incorporation. All previously outstanding warrants to acquire Super Voting Shares and Multiple Voting Shares were also converted into warrants to acquire SVS, without any other amendment to the terms of such warrants.
Private Placements
In January 2022, the Company closed non-brokered private placement offerings for an aggregate 3,717,392 SVS at a price of $3.68 per share to an existing investor group for aggregate gross proceeds of $13,680.
Restricted Stock and Stock Options
Refer to Note 13 - Share-Based Compensation and Other Benefits for details of restricted stock awards and stock option grants.
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JUSHI HOLDINGS INC.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in Thousands of United States Dollars, Unless Otherwise Stated)
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Other Equity
Refer to Note 9 - Debt for details of a convertible promissory note classified as equity.
Warrants
Each warrant entitles the holder to purchase one SVS. The following table summarizes all warrants outstanding as of June 30, 2022:
Expiration DateExercise Price
 ($)
Number of Warrants
2022
1.25 - 1.31
662,738
2023
1.47 - 1.50
337,500
20241.2535,532,922
2025
1.25 - 3.00
2,168,508
20264.18300,000
2029
0.50 - 2.00
26,367,627
Total warrants65,369,295
As of June 30, 2022, warrants issued and outstanding have a weighted-average remaining contractual life of 4.3 years. Certain warrants may be net share settled.

The following table summarizes the status of warrants and related transactions:
Non-Derivative Warrants
Derivative Warrants (2)
Total Number of WarrantsWeighted - Average Exercise Price
Balance as of January 1, 2022
29,156,04840,124,35569,280,403$1.19 
Granted100,000 — 100,000 $3.00 
Exercised (1)
(503,108)(3,508,000)(4,011,108)$1.26 
Balance as of June 30, 2022
28,752,94036,616,35565,369,295$1.19 
Exercisable as of June 30, 2022
27,102,94036,616,35563,719,295$1.15 

(1)The weighted average share price as of the dates of exercise was $3.64. The Company issued 2,843,863 SVS and received $751 in cash proceeds during the six months ended June 30, 2022 for warrants exercised.
(2)Derivative warrants which were issued to the Senior Notes holders and which have an exercise price of $1.25. These warrants represent a derivative liability and are therefore not classified as equity in the statement of financial position. Refer to Note 11 - Derivative Liabilities.
 13. SHARE-BASED COMPENSATION AND OTHER BENEFITS
The components of share-based compensation expense are as follows:
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Stock options$3,955 $769 $9,799 $1,698 
Restricted stock446 1,705 1,279 4,243 
Warrants283 259 570806
Total share-based compensation expense$4,684 $2,733 $11,648 $6,747 
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JUSHI HOLDINGS INC.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in Thousands of United States Dollars, Unless Otherwise Stated)
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Equity Incentive Plan
Under the Company’s 2019 Equity Incentive Plan, as amended (the “Plan”), non-transferable options to purchase SVS and restricted SVS of the Company may be issued to directors, officers, employees, or consultants of the Company. The Plan authorizes the issuance of up to 15% (plus an additional 2% inducements for hiring employees and senior management) of the number of outstanding shares of common stock (of all classes) of the Company (the “Share Reserve”). Incentive stock options are limited to the Share Reserve as of June 6, 2019. As of June 30, 2022, the maximum number of incentive awards available for issuance under the 2019 Plan, including additional awards available for certain new hires, was 10.5 million.
(a)Stock Options
The stock options issued by the Company are options to purchase SVS of the Company. All stock options issued have been issued to employees of certain subsidiaries of the Company under the Company’s Plan. Such options generally expire in ten years from the date of grant and generally vest ratably over three years from the grant date. The options generally may be net share settled.
The following table summarizes the status of stock options and related transactions: