Ascend Wellness Archives - Green Market Report

StaffAugust 15, 2022
Ascend.jpg?fit=798%2C599&ssl=1

5min1430

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 PennsylvaniaOhio, and other states.

New Jersey

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 CincinnatiPiqua, 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.


Debra BorchardtJune 24, 2022
stockmarket.jpg?fit=960%2C576&ssl=1

5min1130

Cannabis deal tracker Viridian Capital Advisors is looking at the second half of the year to see what’s in store for the industry. Director of Equity Research Jonathan DeCourcey wrote, “The outlook is bearish for investor returns in the near term as the key catalyst on everyone’s mind, federal legislation, is unlikely to come, and thus valuations will remain depressed for the remainder of the year with further stock declines likely in connection with broader market weakness.” With that said, DeCourcey thinks investors will have to wait until next year for a return to a positive market in the sector. For now, though he has come up with five predictions for cannabis for the back half of 2022. 

Viridian’s Five Predictions are as follows:

  • Federal legislation won’t happen
  • Stock prices will remain depressed
  • Companies may beat earnings estimates
  • California consolidation will continue
  • Smaller companies will outperform larger ones

Despite hopes for a banking bill, it is unlikely that anything will happen in 2022. DeCourcey wrote, “There is insufficient bi-partisan support for Chuck Schumer’s full legislative proposal to pass (requiring 10 Republican votes and full Democrat support) and, as we have said before, the timing is too tight for a stand-alone SAFE Act to be possible this year given the Democrats will first await the Schumer proposal to make the rounds.” Schumer’s proposal is expected to come in August, but that doesn’t give it much time before the midterm elections. 

New legislation could have been the catalyst to jump-start stock valuations. Take that off the table and there isn’t anything really big to move the needle. The overall broader market has been beset with recession fears and interest rate hikes. That also doesn’t help stock prices. However, depressed stock prices could combine next year with strong company earnings and that could lead to a recovery, but those hopes are pushed into 2023. 

Companies struggled with revenues and earnings at the beginning of 2022. Lingering Covid issues, wholesale price declines, and integration issues for newly combined companies caused some strong headwinds. DeCourcey thinks that these challenges are winding down, but cautions that there could be lingering inflation pressures. Still, expectations have been reset and if the New York market actually opens in 2023 then next year could see some strong growth. Plus, companies are going to be able to start reporting New Jersey sales figures, which are looking very good. Those New Jersey numbers could spark some earnings beats and that would be welcome news. 

“The proposed elimination of the California cultivation tax, which we expect to take effect next month, is a game-changer for California cannabis companies reducing the cost of production on outdoor growers by as much as 50%,” said the report. DeCourcey thinks the additional cash will lead to more transactions and motivation for M&A. The improving tax situation could also entice larger MSO’s to come to the market. “For investors, we expect the easier operating conditions and looming consolidation will result in outperforming returns for California-centric stocks in the second half and into next year.”

Finally, the report noted that scale does not necessarily equate to winning. Large companies get the attention, but the smaller and mid-size companies could have better growth potential with the likelihood of getting acquired. Smaller company stocks also outperformed the larger ones by declining by a smaller percentage. Dropping 47% on average versus 55% declines for larger companies. “Our top picks for 2H investment fall within the category of smaller and medium-sized companies. These names include Ascend (OTC: AAWH), AYR Wellness (OTC: AYRWF), Cansortium (CNTMF), Lowell Farms (LOWLF) and Schwazze.”


StaffMay 18, 2022
daily_hit001.png?fit=1200%2C344&ssl=1

9min1240

The Daily Hit is a recap of the top cannabis business stories for May 18, 2022.

ON THE SITE

Canopy Growth Acquires Jetty Extracts for $69 Million

Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC) is buying Lemurian, Inc. better known as Jetty Extracts, a California-based producer of high-quality cannabis extracts and pioneer of clean vape technology, contingent upon federal permissibility of THC in the U.S. or earlier at Canopy Growth’s election, up to 100% of the outstanding capital stock of Jetty. Read more here.

Bright Green Listed on NASDAQ

Bright Green (NASDAQ: BGXX) is a cannabis company with no revenue that just began trading on the NASDAQ, despite the exchange’s insistence that it won’t list U.S. cannabis companies due to the product being federally illegal. Bright Green plans to produce cannabis for research purposes with the Drug Enforcement Agency‘s (DEA) blessing, which seems to be the reason why the NASDAQ has allowed the company to trade. It would be considered federally legal cannabis. The stock is trading at $26. Read more here.

Cresco Revenues Fall

Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF)  released its financial results for the three months ended March 31, 2022, as revenue fell from the fourth quarter’s $217 million to the first quarter’s $214 million. Cresco Labs did note that the revenue increased 20% over last year’s $178 million for the same time period. This also beat the Yahoo Finance average analyst estimate for sales of $213 million. Read more here.

GMR Women’s Leadership Awards: Ralina Shaw

Ralina is the founder of House of Tyne and on the leadership team of 4thMVMT,  a leading social impact organization based in Los Angeles with a mission to support those who have been adversely affected by onerous Cannabis laws. They do this by educating, empowering, and training those adversely affected to run/operate their BIPOC-led “Sixty Four & Hope” retail dispensaries in Los Angeles (2 recently opened locations and counting). Read more here.

 Psychedelics on the World Stage

Every year world leaders come together to discuss the global economy at the World Economic Forum’s annual gathering in Davos Switzerland. This small town in the Alps has become the place where the smartest people on the planet come together to discuss solutions to the world’s economic problems and issues. It is not uncommon for various industries to establish a meeting place for people to come together for conversations. In 2019, the Canada Cannabis House hosted a three-day event for people in the cannabis industry to introduce themselves and talk about business with people who were unfamiliar with the industry. Read more here.

 Women Creating Cannabis Brands (VIDEO)

On April 28, 2022, the Green Market Report hosted its first Women’s Summit in New York City. This panel was titled “Women Creating Cannabis Brands.” These savvy and accomplished women have created truly unique and original products and companies. Their products are unlike others in their categories. This panel explores what it takes to create a company and product that stands out in a sea of sameness. Read more here.

IN OTHER NEWS

Ayr Wellness Inc.

Ayr Wellness Inc. (CSE: AYR.A, OTCQX: AYRWF), a leading vertically integrated U.S. multi-state cannabis operator (MSO), today announced that it has launched first sales from its Phoenix, Arizona cultivation facility. Concurrently, the company announced the launch of its national pre-roll brand, STiX Pre-Roll Co. in Arizona. Read more here.

American Green, Inc.

American Green, Inc. (ERBB:OTC) has purchased the 40,000 square foot building known as American Green’s “Cypress Chill” cannabis facility located at 2325 W. Cypress St. Phoenix, AZ. 85009.  The building sits on a 62,000 square foot site and was previously leased by ERBB in August 2021 with an option to buy. American Green has exercised its option to buy the building and now owns it. The purchase price was set at $3.75 million at the time of the signing of the lease last year. Recently, the building was professionally appraised for $5.3 million, giving American Green $1.55 million of additional equity, at the time of closing. When added to the down payment of $1.123 million, there is now a total of $2.673 million of equity in the new “Cypress Chill” cannabis grow building. Read more here.

MariMed Inc.

MariMed Inc. (OTCQX: MRMD), a leading multi-state cannabis operator focused on improving lives every day, announced today it had been awarded a provisional dispensary license by the Ohio Board of Pharmacy. MariMed won this license in the Ohio lottery process. The license allows the Company to develop a medical dispensary in Tiffin, Ohio, located south of Toledo and home to the University of Bucharest and Tiffin University. Read more here.

Ascend Wellness Holdings, Inc.

Ascend Wellness Holdings, Inc. (CSE: AAWH.U) (OTCQX: AAWH), a multi-state, vertically integrated cannabis operator focused on bettering lives through cannabis, is pleased to announce that it has closed on $36.5M of additional funding under the increase option of its existing term loan credit facility. In August 2021, the Company announced it had closed on a US$210 million Senior Secured Term Loan credit facility with Seaport Global Securities LLC as lead manager.

Steep Hill Michigan

Steep Hill is pleased to announce that the Company’s licensee partner, Steep Hill Michigan, a Cannabis Regulatory Agency (CRA) licensed medical and adult-use/recreational cannabis safety compliance testing facility, has earned ISO/IEC 17025:2017 accreditation, an International Standard recognized by governments and industry participants as the standard of excellence for the technical requirements and operational competence of a quality laboratory management system. The accreditation was validated by Perry Johnson Laboratory Accreditation (PJLA), the Michigan-based world-wide leader in ISO assessment and validation. Read more here.

First Columbia Gold Corp., Green Diamond Farm

First Columbia Gold Corp (FCGD), operating as FineCannabisGoods.com, is pleased to announce an agreement to acquire Green Diamond Farms LLC of southwest Michigan. Green Diamond Farms is currently working on licensing and setting up growing facilities in different areas of the state where permitted in partnership with FCGD. Each location should gross up to $2.5 mil year 1 and $6 mil by year 2. Read more here.


StaffMay 11, 2022
daily_hit001.png?fit=1200%2C344&ssl=1

6min1000

The Daily Hit is a recap of the top cannabis business stories for May 11, 2022.

ON THE SITE

Ascend Wellness Holdings

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. Read more here.

MedMen Surrenders Assets to Ascend Wellness

MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) finally agreed to close the deal to sell its New York assets to Ascend Wellness (OTC: AAWH). The two companies had initially agreed to the transaction, but then MedMen was accused of having “buyer’s remorse” by Ascend when it tried to pull out of the deal. The two companies then engaged in a nasty legal battle with MedMen accusing Ascend of greasing politicians‘ hands in the state. Read more here.

Harborside Inc. and Pelorus Equity Group

Pelorus Equity Group completed the second and final tranche of its previously announced $77.3M non-dilutive real estate debt financing with Harborside Inc. (CSE: HBOR) (OTCQX: HBORF). The initial funding included three individual loans to Harborside, Urbn Leaf Holdings Inc., and Loudpack JV Corporation with a second tranche made available upon the final closing of the three-way merger. The proceeds were used primarily to retire certain existing loans and provide additional working capital. Read more here.

Agrify Beats Revenue Estimates

Agrify Corporation (Nasdaq: AGFY)  announced financial results for the first quarter ended March 31, 2022, as revenue increased 271% to $26 million for the first quarter versus $7 million for the prior-year period. This was also higher than Agrify’s fourth-quarter revenue of $25.3 million and beat the Yahoo Finance average analyst estimate for revenues of $25..3 million. The stock price was up by over 6% in early trading to lately sell at $2.60. Read more here.

Goodness Growth

Goodness Growth Holdings, Inc. (CSE: GDNS) (OTCQX: GDNSF) reported financial results for its first quarter ended March 31, 2022. Goodness Growth had total revenue in the first quarter of $15.6 million, an increase of 18.2% as compared to the same time period in 2021. The net loss in the quarter was $14.6 million versus a net loss of $6.9 million in the first quarter of 2021. Read more here.

GMR Women’s Leadership Awards: Narim Jarrous

Narmin Jarrous manages operational planning and positioning for all developmental strategies within the Exclusive Brands organization, while also leading the teams’ Social Equity efforts, determined to lift up communities that have been disproportionately impacted by the prohibition of marijuana. Read more here.

Psychedelic Medicine Patents

One of the most important aspects of the psychedelics business—and one that is becoming more contentious—is about securing and protecting the patent for the specific molecule or synthetic that a psychedelics company is banking on because it can essentially protect the investment of millions of dollars a startup spends on setting up and running clinical trials, hiring expensive medical staff and other business development expenses. Read more here.

Targeting Female Cannabis Brands (VIDEO)

On April, 28, 2022, the Green Market Report hosted its first Women’s Summit in New York City. This panel was titled “Targeting Female Brands” and featured a stellar lineup of successful women including Cannaclusive Founder Mary Pryor, Humble Boom Founder Solanje Burnett, CMO of Trube Tokes Kymberly Byrnes and moderated by Politico’s Mona Zhang. More here.

IN OTHER NEWS

Harborside Inc.

Harborside Inc. (CSE: HBOR) (OTCQX: HBORF), a California-focused, vertically integrated cannabis enterprise, today announced it opened two new retail stores in California, bringing its total retail store count to 13, with a new Harborside-branded store in San Francisco, and a new Urbn Leaf-branded store in La Mesa, located in San Diego County. Read more here.

FSD Pharma Inc.

FSD Pharma Inc. (NASDAQ:HUGE) (CSE:HUGE) (FSE:0K9A), a life sciences holding company dedicated to building a portfolio of assets and biotech solutions, has closed the sale of non-core assets for $16.4 million. The company has sold its former cannabis processing facility, located in Coburg, Ontario, which it acquired for $5.5 million in November 2017. The property includes a 26.1-hectare parcel of land and a 50,800 square meter building. Read more here.

 

 

 


Debra BorchardtMay 11, 2022
Ascend.jpg?fit=798%2C599&ssl=1

4min2040

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.


Choose Your News

Subscribe to the Green Market Report newsletter that gives you original content delivered straight to your inbox.

 Subscribe

By continuing I agree to your Privacy Policy and consent to receive relevant newsletters and other email communications on events, editorial features, and special partner offers from Green Market Report. I can unsubscribe or change my email preferences at any time.


About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


READ MORE



Recent Tweets

@GreenMarketRpt – 6 hours

Massachusetts Pivots to Allow Some Pesticide Use by Cannabis Growers

@GreenMarketRpt – 8 hours

Illinois Governor Opens Door to Cannabis Delivery

Back to Top

Choose Your News

Subscribe to the Green Market Report newsletter that gives you original content delivered straight to your inbox.

 Subscribe

By continuing I agree to your Privacy Policy and consent to receive relevant newsletters and other email communications on events, editorial features, and special partner offers from Green Market Report. I can unsubscribe or change my email preferences at any time.