Because of the many limits and challenges of the marijuana industry, pot companies are continually looking for sources of financing, and are not shy in taking on debt. The increasingly popular Jushi Holdings (OTC:JUSHF) is no exception.
In this segment from Motley Fool Live, recorded on March 12, veteran Fool contributor Eric Volkman and healthcare and cannabis bureau chief Corinne Cardina talk about whether the company has gone overboard on borrowings.
Corinne Cardina: We actually got a Slido question on Jushi, that I’m just going to throw in here. Katy asks, “Do you like Jushi’s”– I cannot say that. “Do you like Jushi’s financials? Are you worried about their current debt?”
I looked on Yahoo! Finance, looks like their net debt is $25 million, their total assets are $303 million, so seems like it’s not totally out of whack. Do you have any other thoughts on their debt?
Eric Volkman: Look, as marijuana stock investors, we have to live with this — these companies have debt.
It’s always going to be or it always has been, I should say. And it’s always going to be a challenge for them to find financing. That’s why they’re constantly issuing shares, issuing warrants, all that stuff.
In Jushi’s case, that wouldn’t worry me, necessarily. Also, I think because they are clearly on the way up and clearly standing on a growth engine, I think they’re not going to have too much of a problem getting other types of financing, whether it be additional debt, additional shares, whatever. That wouldn’t worry me as much as the debt piles of other companies would worry me.
I think they have pretty good potential ahead of them so no, it wouldn’t spook me.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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