Quarterly report pursuant to Section 13 or 15(d)

DEBT

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DEBT
 6 Months Ended
Jun. 30, 2024
Debt Disclosure [Abstract]  
DEBT
 8. DEBT
The components of the Company’s debt are as follows:
Effective Interest Rate Maturity Date June 30, 2024 (unaudited) December 31, 2023
Principal amounts:
Second Lien Notes 15% December 2026 $ 79,649  $ 75,497 
Acquisition Facility (1)
15% December 2024 55,250  60,125 
Acquisition-related promissory notes payable
8% - 16%
August 2024 - April 2027
 25,864  35,716 
Mortgage loans
6% - 11%
January 2027 - April 2028
 29,318  29,456 
Total debt subject to scheduled repayments 190,081  200,794 
Promissory notes payable to Sammartino (2)
10%
September 2024 - September 2026
 21,500  21,500 
Jushi Europe debt
n/a March 2022 —  3,298 
Total debt 211,581  225,592 
Less: debt issuance costs and original issue discounts (9,146) (13,037)
Total debt, net $ 202,435  $ 212,555 
Debt, net - current portion $ 9,954  $ 86,514 
Debt, net - non-current portion $ 192,481  $ 126,041 
(1)In July 2024, the Company refinanced the Acquisition Facility. Refer to Note 19 - Subsequent Events for more information.
(2)This amount is related to the promissory notes issued to Sammartino in connection with the acquisition of Nature's Remedy in September 2021. The Company currently has no obligation to pay the principal and interest. See further discussion of the Sammartino Matter in Note 16 - Commitments and Contingencies for more information.
Jushi Europe
On February 16, 2022, Jushi Europe filed a notice of over-indebtedness with the Swiss courts, and on May 19, 2022, the Swiss courts declared Jushi Europe’s bankruptcy. As a result, the Company lost control of Jushi Europe’s assets and liabilities since they are subject to oversight by the Geneva, Switzerland bankruptcy office. During the three and six months ended June 30, 2024, Jushi Europe was deconsolidated and its respective assets and liabilities were derecognized from the Company’s consolidated financial statements, as the Company determined that it no longer has any obligation in relation to this subsidiary. Upon deconsolidation, the Company has no retained interest in Jushi Europe. As a result of these actions, the Company recognized a gain of $1,896 in other income (expense), net in its consolidated statements of operations and comprehensive income (loss).

Second Lien Notes
On January 24, 2024, the Company entered into two Note Exchange Agreements (the “Note Exchange Agreements”) with holders of approximately $9,850 of the Company’s unsecured debt (the “Existing Notes”). Upon closing of the transactions contemplated in the Note Exchange Agreements (the “Debt Exchange”) on February 6, 2024, the holders of the Existing Notes delivered the Existing Notes to the Company for cancellation, and the Company: (1) issued to certain direct and beneficial holders of the Existing Notes an aggregate of $4,750 principal amount of Second Lien Notes; (2) issued to certain direct and beneficial holders of the Existing Notes fully-detached warrants to purchase an aggregate of 1,800,000 of the Company’s SVS, with each warrant having an exercise price of $1.00 per SVS and an expiration of December 7, 2026; and (3) paid to the direct holders of the Existing Notes an aggregate of $2,750 in cash. Refer to Note 10 - Equity for more information.
The Debt Exchange was accounted for as a debt extinguishment, and resulted in the Company recording a non-cash gain on debt extinguishment of $399, which represents the difference between the reacquisition price of the Existing Notes and the net carrying amount of the Existing Notes prior to redemption. This amount was recorded in other income (expense), net in the consolidated statements of operation and comprehensive income (loss) during the first quarter of 2024.
Mortgage Loans
Arlington Mortgage
In December 2021, the Company entered into a $6,900 mortgage loan agreement (the “Arlington Mortgage”), which is principally secured by the Company’s retail property in Arlington, Virginia. The Arlington Mortgage bears a fixed interest rate of 5.875% per annum, payable monthly, and will mature in January 2027.
Dickson City Mortgage
In July 2022, the Company entered into a $2,800 mortgage loan agreement (the “Dickson City Mortgage”), which is principally secured by the Company’s retail property in Dickson City, Pennsylvania. The Dickson City Mortgage matures in July 2027 and bears interest at a variable rate equal to prime rate plus 2%. The interest rate as of June 30, 2024 was 10.5%.
Manassas Mortgage
In April 2023, the Company entered into a $20,000 mortgage loan agreement (the “Manassas Mortgage”), which is principally secured by the Company’s cultivation and manufacturing facility located in Manassas, Virginia. The Manassas
Mortgage is payable monthly and will mature in April 2028. The interest rate is variable and determined based on the 30-day average secured overnight financing rate plus 3.55%, with a floor rate of not less than 8.25%. The interest rate as of June 30, 2024 was 8.878%.
Financial Covenants
Acquisition Facility
The senior secured credit facility from Roxbury, LP, a portfolio company of SunStream Bancorp Inc., which is a joint venture sponsored by Sundial Growers Inc. (the “Acquisition Facility”), contains certain financial and other covenants with which the Company is required to comply, including covenants related to (i) minimum unrestricted cash and cash equivalents balance and (ii) minimum quarterly revenue. As of June 30, 2024, the Company was in compliance with all financial covenants contained in the Acquisition Facility. In July 2024, the Acquisition Facility was repaid in full with the net proceeds of secured term loans from a syndicate of lenders in the principal amount of $48,500 and the remaining amount from cash on hand. As a result, the $48,500 was reclassified to long-term debt as of June 30, 2024. Refer to Note 19 - Subsequent Events for more information.

Mortgage loans
The Company’s three mortgage loan agreements contain certain financial and other covenants with which the Company is required to comply. As of June 30, 2024, the Company was in compliance with all financial covenants contained in each of the mortgage loan agreements.
Annual Maturities
In July 2024, the Company repaid the outstanding principal balance of its Acquisition Facility in full. The maturity table below reflects the portion of the Acquisition Facility that was refinanced with secured term loans from a syndicate of lenders, and the respective maturity date. Refer to Note 19 - Subsequent Events for more information. As of June 30, 2024, aggregate future scheduled repayments of the Company’s debt were as follows:
Remainder of the year 2025 2026 2027 2028 Total
Second Lien Notes $ —  $ —  $ 79,649  $ —  $ —  $ 79,649 
Acquisition Facility
 6,750  2,425  46,075  —  —  55,250 
Acquisition-related promissory notes payable 3,750  —  —  22,114  —  25,864 
Mortgage loans 318  647  658  9,440  18,255  29,318 
Total debt subject to scheduled repayments $ 10,818  $ 3,072  $ 126,382  $ 31,554  $ 18,255  $ 190,081 
The above table excludes the contractual maturities of the Company’s promissory notes payable to Sammartino, as the repayment of these notes, if any, would arise in the context of a non-appealable final judgment by a court. Refer to Note 16 - Commitments and Contingencies for more information. Specifically, the promissory notes that were payable to Sammartino are as follows: $16,500 in 2024 and $5,000 in 2026. However, these balances were classified as long-term debt as of June 30, 2024 since the Company does not expect to repay these amounts within the next 12 months.
Interest Expense
Interest expense, net is comprised of the following:
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
Interest expense
Interest and accretion - Second Lien Notes $ 2,927  $ 2,584  $ 5,675  $ 4,928 
Interest and accretion - Finance lease liabilities 2,404  2,598  5,072  4,947 
Interest and accretion - Promissory notes
 1,282  1,542  2,656  3,078 
Interest and accretion - Acquisition Facility 2,035  2,671  4,187  4,967 
Interest and accretion - Mortgage loans and other financing activities 670  625  1,376  810 
Capitalized interest —  (222) —  (410)
Total interest expense 9,318  9,798  18,966  18,320 
Interest income (247) (8) (351) (10)
Total interest expense, net $ 9,071  $ 9,790  $ 18,615  $ 18,310