Following the close of the market on Tuesday, Ascend Wellness Holdings, Inc. (CSE: AAWH.U) (OTCQX: AAWH) reported its financial results for the second-quarter ending in June 2021. Ascend delivered total revenue of $97.5 million which increased 28.5% quarter-over-quarter and 236.2% year-over-year. Net revenue, which excludes intercompany sale of wholesale products, increased 26.1% quarter-over-quarter to $83.4 million. In addition to the solid revenue gains, Ascend said it was increasing its full-year guidance for 2021 from a range of $320 million to $340 million to a range of $330 million to $350 million. This revised range represents growth of approximately 130% to 145% year-over-year.
The company also reported a net loss of $44.9 million during the second quarter and attributed it to a $32.0 million non-cash interest expense related to the company’s initial public offering (“IPO”) completed in May 2021. This non-cash interest expense was largely driven by a $27.4 million charge related to the beneficial conversion feature of the historical Real Estate Preferred Units that converted in the IPO. The loss of $0.30 per basic and diluted common share was compared to a net loss of $48.2 million, or $0.45 per basic and diluted historical common unit, for the prior quarter.
“Our business continues to produce impressive quarter-over-quarter revenue and adjusted EBITDA growth as we scale our wholesale and retail operations across the high-quality markets where we operate,” said Abner Kurtin, Founder and CEO of AWH. “We remain focused on executing, disciplined in our approach to allocating capital, and excited about the trajectory of the Company,” Kurtin added. “As a result, we are pleased to announce that we are increasing our full year net revenue guidance range to $330 million – $350 million.”
Ascend said that its revenue growth was driven by increased cultivation and production activity, new store openings, and increased traffic at open stores. The company said in its earnings statement that it plans to keep investing in the build-out and expansion of its cultivation and manufacturing facilities in Illinois, New Jersey, Massachusetts, and Michigan. Additionally, it is actively building out additional dispensaries in Massachusetts, New Jersey, and Michigan.
While the total retail transactions increased 39.4% quarter-over-quarter to approximately 573,000, the average value per transaction declined by 8.6% compared to the prior quarter to approximately $101. Ascend said this was primarily due to geographic and medical versus adult-use patient mix. On the wholesale side of the business, gross wholesale revenue increased to $39.5 million, representing an increase of 30.1% quarter-over-quarter. Net wholesale revenue, after intercompany sales, increased to $25.3 million, representing an increase of 22.9% quarter-over-quarter, which continues to be driven by increased output and pricing at the company’s cultivation facility located in Barry, Illinois. Pound equivalents sold increased 28.2% quarter-over-quarter and 285.3% year-over-year to approximately 11,040 pounds.