LOS ANGELES– Ascend Wellness Holdings (AWH), a leading cannabis multi-state operator with a presence in twenty states, has announced its financial results for the third quarter ending June 2023. The company has successfully met market expectations on both the top and bottom lines, showcasing robust growth across its key business segments.
For the fiscal third quarter of 2023, AWH reported a significant sales increase of 14.9% compared to the previous quarter. This growth was fueled by robust performances in both retail and wholesale divisions. The company’s gross revenue surged by 26.6% year-over-year and 12.5% quarter-over-quarter, reaching a notable $169.9 million. At the dispensary level, AWH generated $101.3 million, marking a 12.7% increase from the previous quarter. Key drivers of this growth include the initiation of adult-use sales at their four Maryland dispensaries, a full-quarter contribution from their Tinley Park, Illinois store, and overall improvements across most locations.
The wholesale segment of Ascend Wellness also witnessed strong growth, generating $68.7 million in revenue, a 12.2% increase from the last quarter. This uptick was consistent across all six markets, with New Jersey, Illinois, and Massachusetts recording the most significant gains. Post-adjustments, the company retained $40.0 million.
In terms of free cash flow, an essential indicator of financial health, Ascend Wellness excelled by generating $13 million in the quarter, with nearly $8 million originating from its operational activities, excluding ERTC funds. The company is on track to achieve positive free cash flow in the forthcoming quarter, reinforcing its financial strength and potential for growth and shareholder value creation.
Despite rising overall costs, the company managed its expenses effectively. General and administrative expenses (G&A) were recorded at $40.0 million for the third quarter, up from $36.3 million in the previous quarter. However, the G&A expenses as a percentage of revenue decreased from 29.5% to 28.3%, indicating improved efficiency in utilizing G&A resources.
On the bottom line, Ascend Wellness reported a loss of $11.2 million for the third quarter, which nevertheless marked an improvement from a loss of $16.9 million in Q3 2022.
John Hartmann, CEO of Ascend Wellness, expressed optimism regarding the company’s performance. He highlighted the 13% increase in retail revenue, propelled by the successful launch of adult-use sales in Maryland. Additionally, a 21% growth in the wholesale segment was noted, driven by positive developments in New Jersey, Illinois, and Massachusetts. The introduction of a new super-premium brand “Royale” and efforts to overcome cultivation challenges in New Jersey were also underscored.
Hartmann’s enthusiasm for Ascend Wellness’s future prospects reflects the company’s strategic focus on optimizing operations and strengthening its market position, underpinned by a committed and capable team.
