Jushi Holdings Inc. (JUSHF) Earnings Call Transcript & Summary

Good morning. My name is Sherry, and I will be your conference operator today. At this time, I would like to welcome everybody to Jushi Holdings Second Quarter 2020 Earnings Conference Call. Today's call is being recorded. I will now turn the call over to Michael Perlman, Executive Vice President of Investor Relations and Treasury.

Good morning. Thank you for joining us today for Jushi Holdings Second Quarter 2020 Earnings Conference Call. Joining me on today's call are Jim Cacioppo, Founder, Chairman and Chief Executive Officer; and Kimberly Bambach, Executive Vice President and Chief Financial Officer. This morning, we issued a press release announcing our financial results for the second quarter ended June 30, 2020. The press release along with unaudited financial statements are available on our website under the Investor Relations section and filed on SEDAR. Before we begin, I'd like to remind you that the comments on today's call will include forward-looking statements, which, by their nature, involve estimates, projections, goals, forecasts and assumptions that may be based on anticipated operations, acquisitions and/or market conditions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements on certain material factors or assumptions that were applied in drawing a conclusion or making a forecast in such statements. These forward-looking statements speak only as of the date of this conference call and should not be relied upon as predictions of future events. Additional information about the material factors and assumptions forming the basis of the forward-looking statements and risk factors can be found in the company's management discussion and analysis filed on SEDAR. With that, I'd like to turn the call over to Jim Cacioppo, Founder, Chairman and CEO.

Thank you, Michael, and thank you, everyone, for joining our call today. I hope everyone is doing well and staying healthy during this time. This morning, I would like to take a few minutes to review the progress we have made since our last call as well as provide a broader update on our operational footprint. I'll then turn it over to Kim to review our financials, and then we'll open it up to questions. I'm very pleased to report revenue of $14.9 million in the second quarter of 2020, a 73% sequential quarterly increase driven by strong revenue at our BEYOND/HELLO stores in Pennsylvania and Illinois and successful procurement of products in these 2 supply-constrained markets. Moreover, we have seen strong revenue growth as we exited the second quarter. Specifically, our annualized revenue run rate for July adjusted for the impact of the 2 closed stores in Philadelphia was $89 million, an 80% increase over our March annualized revenue run rate, and our August month-to-date revenue remains robust. As announced on our last earnings call, we began implementing several cost-reduction initiatives across our network of retail stores with a focus on strengthening our financial rigor and driving long-term profitability. These initiatives included the implementation of the strategic purchasing practices, optimizing our labor model, improving our in-store product mix, creating additional targeted promotion, and further leveraging our BEYOND-HELLO.com online platform. We are beginning to see the impact of these changes in our quarterly results and expect the full impact to become more evident in the second half of the year. In April, we very successfully relaunched our online platform, BEYOND-HELLO.com, which now features a vastly improved customer experience, real-time access to store inventory and importantly, online reservation. We believe cannabis has the potential to be one of the most tech-driven industries, and we expect that the rise of technology in the cannabis space, both online and in-store, will accelerate over the next few years. Since relaunching BEYOND-HELLO.com, we have seen a tremendous volume of online ordering and customers taking advantage of our express and curbside pickup. Since the relaunch, we have generated in excess of 100,000 online preorders, serviced over 40,000 customers, averaged nearly 900 customers per day of which approximately 450 per day or 50% of the customers served are new, and have seen our customers' average cart size increase by approximately 10%. We have also been able to generate a 6% e-commerce conversion rate, which is 2x the retail sector average according to Smart Insights. We have already begun to learn more about our customers' shopping behaviors. For example, nearly 75% of our customers shop or select their products online prior to walking into one of our dispensaries. And over 80% of our customers access BEYOND-HELLO.com through their mobile devices. These insights and many others are starting to shape our product offerings and the way we service our customers. Now let's take a look closer at our operations. In Pennsylvania, we recently announced 2 acquisitions. In June, we acquired 80% of the economic and voting interest of Agape Total Health Care, Inc., a Pennsylvania dispensary permittee, which takes the company's subsidiary-held dispensary count from 12 to 15. Earlier this month, we acquired 100% of the equity interest in a Pennsylvania grower-processor permit holder that operates a 90,000 square foot cannabis cultivation and processing facility strategically located within minutes of Interstate 81, Interstate 84 and the Pennsylvania Turnpike, enabling efficient wholesale distribution to the 89 dispensaries currently open across the Commonwealth, including the company's 8 operational BEYOND/HELLO dispensaries in Pennsylvania. Since closing on the Pennsylvania grower-processor acquisition, our focus has shifted to optimize the facility to ensure long-term growth and market share expansion in the Pennsylvania market. Jushi will be targeting a series of operations and facility improvements, combined with the recently completed expansion of the facility are expected to significantly increase production of both prepackaged flower and extracted products. It is expected that the operational improvements will be implemented over the next 12 to 15 months. Since assuming control of the facility, we have already begun to execute on a number of these initiatives, including: First, an expanded footprint. The expansion of cultivation area from 20,000 square feet to 45,000 square feet was recently completed. It is expected that the first harvest from the expansion area will occur in September and October. As previously disclosed, the property has the optionality to increase the indoor cultivation area by an additional 25,000 square feet, bringing the total to 70,000 square feet. Second, the introduction of new extraction technology. The facility currently employs supercritical CO2 extraction technology to offer an assortment of extracted products, which include vape products, tinctures, soft gels and balms. The construction and renovation of a class 1, division 1 extraction room will enable the company to incorporate hydrocarbon extraction technology into the facility, allowing for an increased assortment of concentrate products, leveraging Jushi's in-house operational expertise and brand portfolio. Third, increased facility automation, investments in automation equipment including filling, labeling, sorting, batching and trimming equipment. These investments will help drive efficiencies in the facility, leading to enhanced product margins and improved facility throughput. Fourth, we plan on implementing a series of operational upgrades centered on improving the yield of the cultivation area, thereby increasing biomass output. This will include improved propagation and plant care, additional lighting and contributions from the benching systems and automation equipment. Fifth, improving utilization of current space, including introducing rolling bench systems and streamlined room design. Sixth, improving the product mix. To capitalize on the strong patient demand for a prepackaged flower in the Pennsylvania market, we will optimize the facility's mix of flower and extracted trim production. We will also introduce additional lighting and new automation equipment to help improve recoveries of flower, increase the quality of flower and prevent loss of potency. And finally, improving annual returns and minimizing downtime. We intend to increase productivity of the facility by improving the coordination between cultivation and sanitation teams by implementing a more balanced strain mix and a staggered harvest cycle. Jushi also opened 2 new dispensaries in Ardmore and Reading, Pennsylvania, bringing its total store count in the Commonwealth to 8 medical dispensaries operating under the BEYOND/HELLO brand. The company has the right to operate up to 15 dispensaries and expects to open the remaining 7 locations within the next 12 months. The company also has an assignable purchase option to acquire 100% of the equity of Pennsylvania Dispensary Solutions, or PADS, a Pennsylvania marijuana dispensary permittee in the Commonwealth's Northeast region. PADS currently operates 2 medical marijuana dispensaries with the right to operate 1 additional dispensary in that region. The option expires in February 2022 and is subject to certain closing conditions, including approvals from all appropriate regulatory authorities. As of August 1, 2020, the company's BEYOND/HELLO Center City and Northern Liberties stores were reopened after being compromised earlier this summer amid demonstrations in the city. To date, the company has recovered approximately $400,000 in damages from insurance proceeds. Second quarter 2020 organic same-store sale revenue in Pennsylvania increased approximately 50% as compared to the first quarter of 2020, excluding the 2 previously closed Philadelphia stores. This improved performance is due to the improved management and product procurement and the introduction of BEYOND-HELLO.com. In the second quarter, the company also hired a head of retail operations in Pennsylvania with significant retail experience in the local market. It is worth noting that earlier this week, the governor of Pennsylvania, Tom Wolf, called on the Pennsylvania legislature to legalize recreational marijuana in an effort to help businesses and individuals hit hard by the coronavirus pandemic. If this legislation were to pass, this would significantly benefit both of our recently acquired grower-processor and our retail operations in the Commonwealth. Turning to our operations in Illinois. In February 2020, Jushi became the 100% owner of 2 medical cannabis dispensaries located in Sauget, which is adjacent to East St. Louis; and Normal, which is in the Bloomington-Normal metro area. Since acquiring the 2 dispensaries, both locations have been rebranded to BEYOND/HELLO and have begun adult-use sales. The Sauget dispensary began adult-use sales in March of 2020, and the Normal dispensary began adult-use sales in May 2020. Each dispensary is eligible to seek approval from the IDFPR to open a second retail location. We are exercising both options and have secured locations for both stores with design and construction in process. We expect to have all 4 adult-use stores operating by the end of 2020 or early first quarter of 2021 and believe the 2 new locations can rank among our best-performing stores due to their superior locations. Second quarter of 2020 organic same-store revenue in Illinois increased approximately 330% from the first quarter of 2020, driven by the introduction of adult-use sales, the relaunch of BEYOND-HELLO.com, improved procurement, additional store hours and improved in-store customer experience. We also have several initiatives to vertically integrate our Illinois operations. Moving on to Virginia. Earlier this month, Jushi's majority-owned Dalitso LLC, a Virginia-based pharmaceutical processor for medical cannabis extracts, received approval from the Virginia Board of Pharmacy to commence vertically integrated operations for the cultivation, manufacturing and the sale of medical cannabis. Dalitso is 1 of only 5 applicants that received additional approval for a pharmaceutical process or permit issued by the Virginia Board of Pharmacy and now 1 of only 4 to have received final approval and permit issuance. The company is in the final stages of completing the build-out of its cultivation, manufacturing, retail facility in Prince William near the city of Manassas and expect the facility to be operational in late summer, early fall of 2020. The company anticipates adding 5 BEYOND/HELLO-branded medical dispensaries in Virginia. These 5 BEYOND/HELLO-branded medical dispensaries will be in addition to Dalitso's pharmaceutical processor facility near the city of Manassas, which will allow Dalitso to cultivate, process, dispense and deliver medical cannabis to registered patients in Virginia. Although it is very early, we are cautiously optimistic that adult-use legislation will be seriously considered next year in Virginia. Switching to California. In July 2020, Jushi acquired a licensed Santa Barbara dispensary expected to open in late September, early October of 2020. The city of Santa Barbara is a limited-license market and currently only allows for 3 dispensaries to operate in the jurisdiction. The company also signed a $3.2 million sale-leaseback agreement related to the real estate previously purchased in connection with this license. The company also intends to move forward in the merit-based application process as 1 of only 3 selected applicants for a storefront retail and ancillary delivery permit in Culver City, California. We will continue to pursue additional retail opportunities in specific limited license markets in California, particularly in jurisdictions with high barriers to entry, limited market participants and a firm handle on the local unregulated market. Before we further discuss our outlook, I will now ask Kim to review our second quarter performance. Kim?

Thanks, Jim, and good morning, everyone. Before starting, as a reminder, the results that we'll be going over today can be found in our financial statements and MD&A, and all are in U.S. dollars. Revenue for the second quarter of 2020 was $14.9 million, a 73% increase compared to $8.6 million in the first quarter of 2020. As mentioned earlier, the 73% increase in revenue is primarily driven by Jushi's acquisition of 2 dispensaries in Illinois, both of which began serving adult-use customers, the first in March and the second in May, as well as strong organic growth at the company's BEYOND/HELLO stores in Pennsylvania. Gross profit for the quarter was $7.5 million, resulting in a gross margin of 50%, a $3.3 million or 80% increase in gross profit when compared to the first quarter of 2020. The increase in gross profit over the prior quarter was primarily due to the increase in revenue as well as incremental margin improvement. Adjusted EBITDA loss for the second quarter of 2020 was $1.2 million compared to $6 million in the first quarter of 2020. The $4.8 million reduction in adjusted EBITDA loss in the second quarter was driven by increases in both revenue and gross profit, resulting in a significant reduction in operating expenses as a percentage of total revenue, which is expected to continue as we gain scale. As last quarter, we define adjusted EBITDA, a non-IFRS measure, as EBITDA before fair value adjustments on biological assets and fair value adjustments on sale of inventory, share-based compensation expense, fair value changes in derivative warrants, net gain on business combination, and gain and losses on investments in financial assets. Net loss for the quarter was $9.3 million or $0.10 per diluted share compared to a net loss of $15.9 million or $0.17 per diluted share in the first quarter. The $6.6 million reduction in net loss in the second quarter was driven primarily by both higher revenue and gross profit, as discussed. In addition, as expected, we recorded a gain on investments as a result of improved market conditions as well as an offsetting $3.7 million fair value loss on derivative warrants issued in connection with the debt offering that was announced in December 2019 and June of 2020. Turning to the balance sheet. As of the end of the second quarter, the company had cash of $38.5 million and $12.3 million in short-term investments, total current assets of $62.4 million and current liabilities of $34.4 million, which resulted in net working capital of $28 million at the end of June. As of July 31, the company had $46.7 million in cash, $8.7 million in short-term investments and is fully funded for the build-out of the current portfolio. Additionally, in August, we received the remaining $4 million on our latest oversubscribed debt financing round for a total of $33.31 million. I would like to turn the call back over to Jim to discuss our outlook.

Thank you, Kim. Moving on to our outlook. Our strategy remains focused on building out our high-quality footprint and pursuing attractive acquisition opportunities in our existing markets. Our corporate overhead is substantially built out, and any further acquisitions and organic growth will not add significant overhead, thereby creating a platform that we can bolt-on new revenues and profit. This will make future deals very cash flow accretive to shareholders. While there continues to be great uncertainty in the overall market, we believe our strong balance sheet and disciplined approach to capital deployment positions Jushi to continue to both organically grow in current markets and pursue acquisition opportunities across the supply chain in existing states that we currently operate in. In fact, since our last earnings call, we have raised approximately $38 million in cash. Approximately $33 million of which was from the senior secured note debt financing and approximately $5 million was from 2 recent sale-leasebacks, which provided cash for further growth opportunities. With respect to our outlook, on a pro forma basis, including the impact of the recently closed acquisitions of a Pennsylvania grower-processor and our expectation for strong operating results in the second half of the year, we are providing third quarter revenue guidance of $22 million to $25 million and expect third quarter adjusted EBITDA to be close to breakeven. We are reaffirming our fourth quarter 2020 revenue guidance of approximately $25 million to $30 million, and we expect adjusted EBITDA to be positive. We are also reaffirming our 2021 revenue guidance of $200 million to $250 million and providing 2021 adjusted EBITDA guidance of approximately $40 million to $50 million. Our 2021 revenue guidance contemplates the expansion of our operations in Pennsylvania, including the addition of 7 new stores and the recent grower-processor acquisition; the addition of 2 stores in Illinois for a total of 4 in the state; our vertically integrated license in Virginia becoming operational; our new stores in Santa Barbara and Culver City, California; growth in Nevada; and our Ohio business coming online. Thank you again for your time. Operator, please open the call for questions.

[Operator Instructions] Our first question is from Graeme Kreindler with Eight Capital.

I wanted to ask a follow-up question with respect to the 2020 outlook on the EBITDA side of things, implying a 20% EBITDA margin when you look at the range there. So I was just wondering with respect to the assumptions that are built into that EBITDA margin as you're getting some more vertical integration in Pennsylvania and could potentially add some more vertical integration in some other spaces. I'm wondering if you see any potential for upside on the EBITDA margin or even just on the core operations as they stand right now as they get more efficient.

Thank you, Graeme. Yes. So this was the first time we put out EBITDA guidance. And I do believe vertical integration, as you suspect, will increase our margins and -- as will core operations. So in particular, the grower-processor we just bought in Pennsylvania is doing its first harvest, and we laid out a series of 6 or 7 steps that we are pursuing to optimize and to grow that facility. And of course, that is not in the full year numbers because each quarter will be better than the previous quarter as we laid out for approximately 12 to 18 months. So if you looked at the exit run rate of 2021 margin, I think it would be higher than the overall year just based upon that. So yes, I think your intuition's correct on that. And I think the margin in 2021 represents the fact that we still have this corporate G&A that's fully built out and our operators are growing very fast. On a full year basis, that margin will be improving all 4 quarters, but that represents a full year margin which is lower in the first quarter than it is in the fourth quarter. So yes, vertical integration will help the operations growing, as we've laid out, will also help and the exits will be much better than the full year.

Okay. Understood. And then just looking at the Q3 guidance here, the revenue range of $22 million to $25 million, and then looking at the reaffirmed range for Q4, the $25 million to $30 million. So right now, that would imply the growth rates slowing down a bit into Q4 here. So I was wondering, in terms of looking about those assumptions there, obviously have a better handle on the outlook for Q3 given that it's closer in time, but I was just wondering, are there any particular trends you're anticipating in Q4, why we might see a bit of the slowdown in growth? Does it have to do perhaps with something with stimulus? Is it more just you're going to wait and see how things develop into the back half of the year there. I just want to get some more color.

Yes. So we do our best job to project out the numbers. And I think with the fourth quarter represents more than anything else is probably the slowdown that COVID has had on opening stores. So the regulators and government officials that you're going to -- that you went to in sort of April and May, even in March, we had to work from home. They had to get a home office set up. They got behind on their work. Some contractors couldn't show up because some people on their crews got COVID. So all those things have caused the openings of stores to get delayed. Although it's been very -- we've done a great job on operations in terms of revenue growth, the store buildout definitely was slowed down by COVID. And so I would also say that we've had -- the first quarter and second quarter of 2021, because so many stores will be opening up and the new grower-processor acquisition will be improving, the growth curve, that will happen -- will kick in, in the first, second quarter of 2021. I think that's when the growth rate sort of kicks back up. So that's the best of my knowledge of what's going on. And in addition, it doesn't take much to push a store into the next year. It's a 1-month delay or it is coming out at the end of the year, 2-month delay. And so we do have some very -- probably what could be our 2 best stores opening up in the late fourth quarter. You're not going to see -- or early January if they get pushed. You're not going to see the effect of that in the fourth quarter. And those stores are the second store in Sauget, across the bridge from St. Louis, and the second store in Bloomington-Normal, both that we think will be fabulous stores in a great market. And we won't see much impact to that -- of those stores in the fourth quarter. I hope that helps you out.

Yes. No. It's very helpful. Appreciate that, Jim. And then the last question I have before I jump back in the queue here. Just to follow up back to the comments on the call about bolt-on acquisitions, potential for getting further vertically integrated here. I was just curious with respect to -- the first half of the year was really characterized on the M&A side about distressed opportunities. Now that we're in an environment where many of the cannabis equities, particularly on the U.S. side, things are coming off their lows, what's the environment look like right now? Is it still very attractive? Is it's still a buyer's market? If you could provide some more color on what sort of opportunities you're seeing and perhaps where the prices are trending, that would be appreciated.

Yes. So listen, we were the -- one of the only companies to get a deal done during COVID times. I think the only one. So the deal volume was exceedingly low in the first and second quarter. We closed 2 deals, but 1 had been -- the deal we had announced almost 12 months prior but -- so I think you saw -- any closures you saw of deals really related to stuff that was put in place prior to the COVID times. Our deal in Pennsylvania, on the other hand, was one that we announced and financed and closed during the COVID times. And I don't think there's been any others that -- where you've seen a closure. So I think that deal volume is just really starting to pick up. I think people are coming. The inquiries are coming out of hibernation. So I would expect a little bit more activity and a little bit more potential competition on that side although not a great deal. In terms of the sellers, I think there's a list of sellers that you would know, very large MSOs that need to raise cash, and their best opportunity to do so is to sell assets. I think there's also large MSO or 2 that are restructuring their balance sheet. And we'll need cash after the restructuring, and you would think that the best opportunity for them to do it might be selling assets. So I think there's plenty of assets for sale out of large public MSOs. In the private market, you have a lot of operators who've been there for a while seeking capital, seeking to sell their licenses or operations without any success. So I would think that we would have some good opportunities for the foreseeable time. And I suspect that you'll see some more good deals out of Jushi, but you'll never know until you know.

Our next question is from Shaan Mir with Canaccord Genuity.

Congrats on the quarter here. It's just one quick question for me. It's on your -- on that revenue guidance for Q3 and Q4. I was just trying to get an idea of what the acceleration would be like in the Pennsylvania market from the current quarter into the next. So maybe if you could provide some details or some color just around the sales mix that you guys saw from Pennsylvania in Q2 and kind of how you expect to see that trend into Q3 and Q4. So what portion of that $20 million to $25 million -- or the $25 million to $30 million do you expect to see coming from Pennsylvania?

Great. Thank you. I think a large amount of it comes from Pennsylvania. I don't have the numbers in front of me to be more specific than that, but I'll give you some examples. We had 2 stores open up in the second quarter that are just getting up and growing. In addition, we had our 2 Philly stores that were compromised in the demonstrations back in late May. And so just having those 4 stores mature and come back online, I think it's a real nice growth opportunity. We're also seeing some really nice -- continued, nice same-store sales growth. So that supports it. And then the acquisition of PAMS, the cultivation processor license in Pennsylvania, will put that on the books. It has some existing revenue, but we're ramping that up. As mentioned, there was 45,000 square feet of cultivation space, half of -- almost half of which was just completed, and the grow rooms are virtually empty. So we can fill those up and start that ramp. And then we'll do the improvement of that operation going into the fourth quarter, which provides more growth and then the continued same-store sales growth. What we don't have, and as Graeme pointed out, it appears that growth rate slows down a bit in the fourth quarter, and that's primarily due to the Pennsylvania -- there's about 5 of the 7 stores that will open up next year, will all open up, I think, pretty similar time. And that time got pushed back because of the COVID-related delays. And so that really is the first and second quarter of next year. So yes, I think the growth is largely due to Pennsylvania and the slowdown in the fourth quarter that hit through Pennsylvania because of the COVID, for sure. And then Illinois, we have 2 stores that we're opening up, and we're hoping 1 gets up and going in November. And the other looks like it may -- if it gets opened this year will be at the end of December. So the Illinois growth is really just the same-store growth that we're projecting. And the new stores really got pushed into 2021 for the most part.

Our next question is from [ Brian Kesley ].

Jim, congratulations on a great quarter. My question is on guidance as well. I guess when you originally introduced the guidance, it seemed pretty aggressive. And now when you look at your fourth quarter at $30 million annualizing at $120 million, it seems quite conservative. Can you break down the guidance for 2021 in terms of what you're going to do in Pennsylvania and Virginia and then also what effect full adult-use will have on those numbers in 2021 if we get full adult-use?

Yes. So [ Brian ], I don't have the projections in front of me to do the breakout. So in terms of more details, I would suggest you or anybody else call Michael Perlman, our Head of Investor Relations, to get more specific if my team is willing to disclose details. I'm not sure how the legal team feels about that. But in 2021, Pennsylvania becomes -- I mean it's clearly the biggest asset of the company. Although Illinois punches, I mean, given that we only have 2 stores, these are monster stores, to be honest with you, and they're just doing fabulous. And so Illinois shouldn't be discounted and those 2 stores opening up are -- could be our 2 best stores in the system. They are adult-use now, which accounts for part of that. They're also very well-located stores, not only the markets but also in those -- the locations itself are fantastic stores, both of them, the new ones. So Illinois will do very well in 2021. But Pennsylvania is clearly our keystone asset, not the pun they call The Keystone State but 15 stores in total and 7 more opening up and then the maturation of those stores. In addition -- I can't emphasize enough this grower-processor we bought has so much potential that's unmined. The company we bought it from was kind of short on capital and it just needs some tender, loving care. It's a capital investment. And our operations team, which is a great operation out of Colorado, used to go in there and get the yields up, the potency up and those types of things. So we're very, very positive on that. And that's going to improve every quarter for a good 12 to 15 months at least. So yes -- and improvements are not just improvement, but it's growth because we also have a capital expansion project of about 25,000 square feet. We believe we can fund that off of the sale-leaseback. We don't have to go to market to fund that. And so we're -- we'll use our balance sheet really. You have the cash on our balance sheet. You don't have to use that. So we're very excited about the growth of Pennsylvania. Now in terms of the adult-use in Pennsylvania, as we said, the governor came out earlier this week for the first time and was quite specific about tying it to adult-use to some of the economic issues and joblessness issues that the state has due to the COVID pandemic. So that was very welcomed by us. And in terms of the impact that could have on your business, I would point you to Illinois, our new stores in Illinois and probably others as well. But if you look at -- we acquired the business in the first quarter, and it was a medical business and a pretty well-run medical business. And then we converted those in March and May to adult-use. And as we reported in that quarter, the sales growth has been 330%. Now that's not all just adult-use. Jushi did a very good job of the BEYOND-HELLO.com of running the stores. We've changed the way you go in and out of the stores. We -- and we did a great job with inventory procurement in that market. So the 330% is what people talk about, a tripling of the market. So it would be a fabulous thing for Jushi if Pennsylvania went to adult-use. And I believe we're -- the company that's most concentrated to Pennsylvania given our smaller size to some of our larger market cap competitors in the state. So you get a big bang for your buck with Jushi for what could happen to the positive in Pennsylvania. Thank you, [ Brian ].

Yes. So that puts you in the 15 stores doing $4 million a month. That's about $65 million in Pennsylvania. And if we see similar effects as we saw in Illinois, where you get 3x that, and that alone is $200 million. And the rest, Illinois, Virginia and all your other assets are 3. I mean that seems that your number is quite conservative should we get adult-use in Philadelphia.

Yes. And so -- and I didn't answer that second part of your question, [ Brian ], sorry. I just went on with the first, lost focus. So yes, I mean -- but if it goes adult-use, we expect it to go adult-use in the first quarter. There is a legislative session in the fourth quarter. We hope it happens. But I think it's more likely in the first quarter and -- of next year. And then there's an implementation process that takes place, wherein Illinois, they went to adult-use and then it took a number of months before the program actually started. So -- and I forget that was a 6-month period, what it was. So I really think the adult-use, if it happens, kicks in, at the earliest, late of -- the late 2021, but that provides a tremendous uptick in 2022. And then in Virginia, I think Virginia is a state where the growth in 2021 is maybe the harder to predict because it's a new market. Of all the markets we're in, it's the harder one to predict because it's brand new. There actually is no legal cannabis sales currently in the state of Virginia. And so given that and given that we think it's a good program and there's favorable clinical winds from that state for the program, we expect 2021 and 2022 to be tremendous growth years in Virginia. So we have 2 of our 3 top states where we have -- with the adult-use of Pennsylvania and Virginia, just a maturation of that program. We have sort of tremendous growth potential in 2022. Now we're -- obviously don't have those numbers or not. If we did, we wouldn't share them. But we have numbers but we haven't drilled down on them, and we wouldn't share them this far out. But -- so there's tremendous growth potential in this asset base for 2 to 3 years. And that doesn't include the fact that we have this platform. And I think that we have done some of the best value-driven, opportunity-driven deals of, I think, any company. And the platform is fully built out. So I think there's upside in the revenue guidance for us, putting more revenue and EBITDA onto the platform at good prices in 2021 and us just executing a little bit better than planned. But the adult-use, I think, pushes us into 2022 really before you see the big impact in Pennsylvania.

We have reached the end of our Q&A session. I would like to turn the conference back over to Jim for closing remarks.

Great. Thank you for participating on today's conference call, everybody. We look forward to keeping you updated on the advancement of our business. In fact, we plan on announcing the timing of Jushi's first Investor Day shortly. So please stay tuned, stay safe and be well.

Thank you. This does conclude today's conference. You may disconnect your lines at this time, and have a pleasant day.