Ascend Wellness Holdings Sees Significant Growth in Q3 2023 Financials

LOS ANGELES- Ascend Wellness Holdings, Inc. an integrated cannabis operator, announced a streak of positive financial outcomes for the third quarter ending September 30, 2023, presenting what is now their sixth consecutive record-breaking revenue quarter.

Economic Highlights

AWH has reported a robust 27.0% increase in net revenue year-over-year, reaching $141.3 million, with a 14.9% rise over the previous quarter. Notably, the company’s Adjusted EBITDA witnessed a 38.5% quarter-over-quarter enhancement to $29.5 million, while also expanding the Adjusted EBITDA margins by 356 basis points sequentially. This progress demonstrates Ascend’s effective management and operational optimization amidst the evolving cannabis market.

Operational Cash Flow and Fiscal Management

The company also announced a generation of $24 million in cash from operations, marking the third consecutive quarter of positive operating cash flow, not including a $3.3 million employee retention tax credit. Furthermore, Ascend achieved $13 million in free cash flow during the quarter, signaling the company’s first quarter of positive free cash flow.

Business and Leadership Developments

On the operational front, Ascend commenced adult-use sales at four dispensaries in Maryland within the quarter, potentially contributing to its revenue surge. Following Q3, Ascend underwent executive reshuffling, with the appointment of new Chief Financial Officer Mark Cassebaum, Chief of Operations Chris Holzer, and Chief Legal Officer Denise Pedulla, setting the stage for continued growth and corporate governance.

Executive Insights

Abner Kurtin, Executive Chairman, credits the company’s outstanding quarter to its diligent customer focus and strategic market expansion, particularly in the adult-use segment. Outgoing CFO Dan Neville highlighted Ascend’s cash flow achievements as evidence of the company’s financial health and strategic direction towards self-sufficiency.

Financial Summary

The increase in net revenue was primarily fuelled by growth in both the retail and wholesale divisions. Retail revenue rose by 22.3% year-over-year, reaching $101.3 million, while gross wholesale revenue climbed to $68.7 million, a 33.4% year-over-year increase.

Q3 2023 gross profit hit $43.6 million, or 30.8% of revenue, showcasing a marked improvement from the previous quarter’s 23.0% of revenue. Adjusted EBITDA for the quarter was a significant highlight, growing 38.5% from the previous quarter and solidifying a 20.9% margin.

Corporate Strategy Going Forward

With these results, AWH positions itself as a forward-moving entity in the cannabis industry, demonstrating financial resilience and the ability to generate a substantial cash flow. The company’s ability to adapt to the dynamic cannabis market and its focus on increasing operational efficiency are likely to remain key topics of interest to investors and industry observers.

For a detailed discussion on AWH’s third-quarter financial results, interested parties are directed to the company’s conference call and webcast scheduled for November 7, 2023.

Ascend’s ongoing commitment to growth, backed by a comprehensive strategic approach and operational excellence, will continue to be instrumental in its journey within the competitive landscape of the cannabis industry.