Ascend Wellness Holdings, Inc. (OTCQX: AAWH) reported its financial results for the third quarter ending September 30, 2021, with total revenue increasing 7.7% sequentially to $105 million and 131.4% year-over-year. Still, Ascend reported a net loss of $13.0 million during the quarter. The company said it was primarily driven by elevated interest expense due to one-time prepayments of legacy loans and write-offs of unamortized deferred financing costs.
Despite the positive momentum for revenue, Ascend warned that it expects a sequential quarterly decline in revenue in the fourth quarter due to “delays in scaling the wholesale business and softening retail cannabis trends resulting from the expiration of government stimulus and a normalization of consumer spending.” Having said that, Ascend said it expects to more than double full year 2020 net revenue and meet the low-end of the full year 2021 guidance range announced during the prior quarter.
“I am pleased with the Company’s performance during the quarter as we delivered solid sequential revenue growth and substantial improvements in our Adjusted EBITDA margins,” said Abner Kurtin, Founder, and CEO of AWH. “Our focus continues to be scaling our asset-base of premier retail locations and state-of-the art cultivation facilities in top limited license markets. With both our total canopy and number of retail dispensaries poised to meaningfully expand, we remain encouraged about the growth potential of our existing portfolio.”
Net revenue, which excludes the intercompany sale of wholesale products, increased 13.2% quarter-over-quarter to $94.4 million. Sequential revenue growth was driven by an increased number of wholesale units sold and the full quarter benefit of prior quarter store openings in the retail business.
Total retail revenue increased to $63.5 million for the third quarter of 2021, representing an increase of 9.4% quarter-over-quarter. The growth was driven by increases in transactions at existing stores, the ramp of traffic in the Boston dispensary, expanded store hours in four dispensaries in the Chicago area, and the full quarter benefit of the three stores opened in the prior quarter.
Gross wholesale revenue increased to $41.5 million, representing an increase of 5.2% quarter-over-quarter. Net wholesale revenue, after intercompany sales, increased to $30.9 million, representing an increase of 21.9% quarter-over-quarter, which was driven by an increased number of wholesale units sold.