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

LOS ANGELES –Cannabis multistate operator Ascend Wellness Holdings Inc. has announced its intention to raise $7 million through a private placement offering. The New York-based MSO plans to 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 equity financing will be utilized by Ascend for potential acquisitions of debt or equity in select marijuana companies, as well as for taking over assets as part of the company’s ongoing rollup strategy, according to a news release.

CEO John Hartmann expressed the attractiveness of various acquisition opportunities, stating that Ascend believes they could be highly beneficial. He further emphasized that the private placement puts Ascend in a strong position to act strategically, and the decision to issue equity at these prices reflects the existing investor’s unwavering confidence in Ascend and its potential acquisition strategy.

Earlier in April, Ascend completed a $19 million cash-and-stock deal to acquire four medical marijuana dispensaries in Maryland from Devi Holdings. These dispensaries are set to launch adult-use sales on July 1.

Hartmann, who previously held positions as the president of BuyBuy Baby and the chief executive of True Value, assumed the role of Ascend’s CEO in May as part of a management team and board reorganization. This move aligns with Ascend’s transition from a founder-led management team to a professional-led organization, as noted by founder and Chair Abner Kurtin in a previous statement.

During the first quarter of this year, Ascend reported net revenue of $114.2 million, representing a year-over-year increase of 34.2%. However, the company incurred a net loss of $18.5 million in the same period, compared to a net loss of $27.8 million in the first quarter of the previous year.

As of the end of the first quarter, Ascend had $73.3 million in cash and net debt totaling $250.8 million.