Ascend Wellness Plans to Raise $7 Million in Private Placement Offering for Strategic Acquisitions

NEW YORK — Ascend Wellness, a prominent cannabis multistate operator (MSO), is set to embark on a private placement offering to raise $7 million in capital. As part of the equity financing terms, the New York-based MSO will sell 9,859,155 shares of Class A common stock at a price of $0.71 per share to an existing debt and equity investor.

The proceeds from the private placement will be earmarked for potential acquisitions of debt or equity in select marijuana companies, aligning with Ascend’s ongoing rollup strategy, as stated in a recent news release. CEO John Hartmann emphasized the attractive acquisition opportunities that have come to Ascend’s attention, expressing confidence that such acquisitions could significantly enhance the company’s overall standing.

Hartmann added, “The private placement strongly positions Ascend to act strategically, and our decision to issue equity at these prices reflects our existing investor’s utmost confidence in Ascend and our potential acquisition strategy.”

In April, Ascend successfully concluded a $19 million cash-and-stock deal to acquire four medical marijuana dispensaries in Maryland from Devi Holdings. The acquisition positions Ascend to participate in adult-use sales commencing on July 1.

Ascend’s leadership underwent notable changes in May, with Hartmann assuming the position of CEO following a C-suite and board reshuffle. The move marked a transition from a founder-led management team to a professional-led organization, as emphasized by Founder and Chair, Abner Kurtin.

During the first quarter of this year, Ascend achieved net revenue of $114.2 million, indicating a notable 34.2% year-over-year increase. The company posted a net loss of $18.5 million during the same period, a considerable improvement compared to the net loss of $27.8 million recorded in the first quarter of the previous year.

As of the end of the first quarter, Ascend boasted $73.3 million in cash reserves while carrying net debt of $250.8 million. With the upcoming private placement offering, Ascend seeks to bolster its financial position and capitalize on potential acquisition opportunities that align with its strategic growth objectives.