Ascend Revenues Drop Slightly From Fourth Quarter, Rise 33% Over Last Year

Ascend Wellness Holdings, Inc. (CSE: AAWH.U) (OTCQX: AAWH) reported its financial results for the first quarter ending March 31, 2022. Total revenue of $101.2 million decreased 0.8% quarter-over-quarter and increased 33.4% year-over-year. Ascend stock jumped over 5% in trading to close at $3.20.

Ascend also reported that it had a net loss of $27.8 million or a loss of $0.16 per basic and diluted common share during the quarter, compared to a net loss of $16.5 million in the fourth quarter of 2021. Ascend attributed the loss to operating costs and a one-time settlement charge related to the settlement of a stockholder dispute regarding one of the company’s convertible note purchase agreements.

“Q1 2022 was a transitionary quarter for Ascend as we made investments to launch the next phase of our growth story,” said Abner Kurtin CEO and Co-Founder. “While preparing for adult-use sales in New Jersey, we significantly increased our total canopy capacity and recently entered into the Pennsylvania market. The early days of adult-use sales in New Jersey indicate that the state will be a key growth driver for the remainder of 2022.”

In addition to reporting earnings, Ascend was also able to tell the market it had settled its lawsuit with MedMen over the purchase of its New York assets. The settlement is expected to close within 30 days.

Breaking down the revenue results, total retail revenue was $63.3 million for the first quarter of 2022, representing a 2.4% decline as compared to the prior quarter. Gross wholesale revenue increased to $37.9 million, a 2.1% sequential increase, driven by growth in intercompany wholesale sales. Net wholesale revenue decreased 7.8% sequentially to $21.8 million, primarily driven by pricing pressure in Illinois and Massachusetts.

After The Quarter Ended

After the quarter ended, Ascend completed an equity transaction to roll up all of the other existing members of Story of PA CR, LLC. The company said it will use the remainder of the year to build a cultivation facility and six dispensaries, with plans to commence operations in Pennsylvania in 2023.

Also after the quarter, Ascend was one of the first in the state of New Jersey to launch adult-use sales at its dispensary in Rochelle Park, marking the start of the highly anticipated adult-use market in the state. On the first day of recreational sales, the company had approximately 1,500 customers and average basket sizes of $135, further substantiating the promising market.

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.


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