Quarterly report pursuant to Section 13 or 15(d)

DEBT

v3.23.1
DEBT
 3 Months Ended
Mar. 31, 2023
Debt Disclosure [Abstract]  
DEBT
 7. DEBT
The components of the Company’s debt are as follows:
Effective Interest Rate Maturity Date March 31, 2023 December 31, 2022
Principal amounts:
Second Lien Notes 15% December 2026 $ 73,933  $ 73,182 
Acquisition Facility 15% December 2024 65,000  65,000 
Acquisition-related promissory notes payable
8% - 18%
August 2024 - April 2027
 57,216  57,216 
Other Debt (1)
7% - 9%
March 2022 - July 2027
 12,860  10,960 
Total debt - principal amounts $ 209,009  $ 206,358 
Less: debt issuance costs and original issue discounts (15,668) (17,096)
Total debt - carrying amounts $ 193,341  $ 189,262 
Debt - current portion $ 11,734  $ 8,704 
Debt - non-current portion $ 181,607  $ 180,558 
(1) Includes Jushi Europe debt. Refer to Note 15 - Related Party Transactions for more information.
Second Lien Notes
In March 2023, the Company and one of its wholly subsidiary, JGMT, LLC, and the Company’s Chief Executive Officer and Chairman of the Board of Directors (“CEO”) entered into an amendment to the existing employment agreement (the "Amendment") pursuant to which the CEO agreed to receive the $750 annual cash bonus that would otherwise have been paid to him in the following alternative form: (i) a lump sum cash payment in the amount of $250, which was paid on March 15, 2023, (ii) $750 aggregate principal amount of 12% second lien notes (“Second Lien Notes”) due December 7, 2026, which was issued on March 15, 2023, and (iii) fully-detached warrants to purchase up to approximately $375 worth of the Company’s SVS (“Warrants”), with such Warrants to be priced and issued as soon as practicable in accordance with US and Canadian securities laws. The Warrants, when issued, will have an exercise price per subordinate voting share equal to the greater of: (a) a twenty-five percent (25%) premium to the volume-weighted average price per share of the Company’s subordinate voting shares on the Canadian Securities Exchange (converted into U.S. Dollars at an exchange rate determined by the Company in good faith) over the trailing ten (10) trading day period prior to the date the Warrants are issued, and (b) the fair market value of the Company’s subordinate voting shares on the Canadian Securities Exchange (converted into U.S. Dollars at an exchange rate determined by the Company in good faith) on the date the Warrants are issued.
Other Debt
Arlington Facility
In November 2021, the Company closed on the purchase of a property in Arlington, Virginia, for $7,000. On December 28, 2021, the Company entered into a $6,900 credit facility (the “Arlington Facility”) with a bank to refinance the purchase. As of December 31, 2022, the Company had drawn down $5,000, and the remaining $1,900 was drawn down in January 2023. The Arlington Facility bears a fixed interest rate of 5.875% per annum payable monthly and will mature on January 1, 2027.
Financial covenants
Acquisition Facility
The Senior Secured Credit Facility (the “Acquisition Facility”) contains certain financial and other covenants with which the Company is required to comply. As of March 31, 2023, the Company was in compliance with its financial covenants related to minimum (i) unrestricted cash and cash equivalents balance requirement and (ii) minimum quarterly revenue requirement.
Other Debt
The Arlington Facility and the $2,800 credit facility the Company entered into in July 2022 with a bank to fund the construction of a dispensary in Dickson City, Pennsylvania (the “Dickson Facility”) contain certain financial and other covenants with which the Company is required to comply. As of March 31, 2023, the Company was in compliance with all financial covenants contained in these two facilities.
Annual Maturities
As of March 31, 2023, aggregate future contractual maturities of the Company’s debt are as follows:
Remainder of the year 2024 2025 2026 2027 Total
Second Lien Notes $ —  $ —  $ —  $ 73,933  $ —  $ 73,933 
Acquisition Facility 4,875  60,125  —  —  —  65,000 
Acquisition-related promissory notes payable 3,448  22,385  1,970  6,971  22,442  57,216 
Other debt (1)
3,407  165  178  189  8,921  12,860 
Total $ 11,730  $ 82,675  $ 2,148  $ 81,093  $ 31,363  $ 209,009 
(1)The other debt amounts due for the remainder of the year include the Jushi Europe debt, which became due in 2022 and is not expected to be settled and/or repaid until the completion of the liquidation of Jushi Europe. Refer to Note 15 - Related Party Transactions for additional information.

Interest Expense
Interest expense, net is comprised of the following:
Three Months Ended March 31,
2023 2022
Interest expense
Interest and accretion - 10% Senior Notes
 $ —  $ 5,398 
Interest and accretion - Second Lien Notes 2,344  — 
Interest and accretion - Finance lease liabilities 2,349  2,901 
Interest and accretion - Promissory notes 1,536  737 
Interest and accretion - Acquisition Facility 2,296  1,360 
Interest and accretion - Other debt 185  479 
Capitalized interest (188) (744)
Total interest expense $ 8,522  $ 10,131 
Interest income (2) (15)
Total interest expense, net $ 8,520  $ 10,116