Ascend Wellness Holdings, Inc. (CSE: AAWH.U) (OTCQX: AAWH) reported its financial results for the second quarter ending June 30, 2022, with revenue increasing 16.2% quarter-over-quarter and increasing 20.7% year-over-year, to $117.7 million. This easily beat the Yahoo Finance average analyst estimate for sales of $92 million. Ascend said its net loss dropped to $21.2 million during the quarter versus last year’s net loss of $27.8 million for the same time period. The net loss made the earnings ($0.11) per share, which missed the earnings estimate for a loss of ($0.06) per share.
Retail revenue grew 19.4% quarter-over-quarter to $75.6 million. Gross wholesale revenue grew 11.0% quarter-over-quarter to $42.1 million and wholesale, net of intercompany sales, grew 0.7% to $21.9 million.
“We are pleased with our financial performance for the quarter, with upwards of 15% revenue growth and operating leverage which drove a 220 basis point increase in Adjusted EBITDA margins,” said Abner Kurtin CEO and Co-Founder. “The key driver of these results was the commencement of adult-use sales at our Rochelle Park, New Jersey dispensary, one of the top performing stores in the state. Ascend is extremely well positioned to benefit from adult-use sales in New Jersey, because of our attractive collection of assets combined with high operating leverage given our focused portfolio. Outside of New Jersey, the rest of the business across the portfolio also exceeded expectations. Furthermore, we were pleased to announce important acquisitions in Ohio and Illinois, which bring us to the retail cap in both states, positioning us to be a leader in the Midwest. This growth is supported by one of the top balance sheets in the industry with $141 million of cash and no near term maturities.”
Ascend said it closed on $65 million of the remaining funding available under the accordion feature of its existing Senior Secured Term Loan, bringing the total debt financing from the loan to $275 million. This capital will support the Company’s growth and expansion initiatives in Pennsylvania, Ohio, and other states.
Like other companies that were able to start sales in New Jersey, the garden state has proven to be a winner. Ascend began its adult-use sales at the Rochelle Park, New Jersey dispensary on April 21st, with store sales reaching as high as $1.25 million in a single week. Subsequent to quarter end, the company opened its Fort Lee, New Jersey dispensary for medical sales. The company said it expects to begin selling adult-use cannabis at its Montclair, New Jersey store on August 19th, pending approval by the township, followed by adult-use sales in Fort Lee this fall. The company said it added 4,000 square feet of canopy in New Jersey for a total of 20,000 square feet of a canopy in the state and 217,000 square feet overall.
Also in the news, today, Ascend announced that it entered into a definitive agreement the option to buy Ohio Patient Access, which owns and operates three Ohio dispensaries that are in the process of being built in Cincinnati, Piqua, and Sandusky. The addition of OPA’s three dispensaries would increase AWH’s Ohio footprint to five dispensaries, the maximum permitted by the State. The company also signed two agreements to acquire two dispensary licenses in Illinois from separate sellers. Once closed, the company would have ten dispensaries in Illinois, which would maximize scale and bring it to the state-imposed cap of ten.