Ascend Wellness Q1 Revenue Declines 4% Sequentially to $85.1 Million

Q1 2022 Net Revenue of $85.1 million

Cash and Cash Equivalents of $143.8 million at Quarter-End

NEW YORK, May 11, 2022 /PRNewswire/ – Ascend Wellness Holdings, Inc. (“AWH” or the “Company”) (CSE: AAWH.U) (OTCQX:AAWH), a vertically integrated multi-state cannabis operator focused on bettering lives through cannabis, today reported its financial results for the three months ended March 31, 2022 (“Q1 2022”). Financial results are reported in accordance with U.S. generally accepted accounting principles (“GAAP”) and all currency is in U.S. dollars.

Q1 2022 Financial Highlights
  • Gross Revenue: Total revenue of $101.2 million decreased 0.8% quarter-over-quarter and increased 33.4% year-over-year.
  • Net Revenue: Net revenue, which excludes intercompany sale of wholesale products, decreased 3.8% quarter-over-quarter, but increased 28.7% year-over-year, to $85.1 million.
  • Net Loss: Net loss of $27.8 million during the quarter, compared to net loss of $16.5 million in Q4 2021.
  • Adjusted EBITDA1: Adjusted EBITDA1 of $16.4 million, representing a 19.2% margin.
  • Balance Sheet: As of March 31, 2022, cash and cash equivalents were $143.8 million, and net debt2 was $89.9 million.
Business Highlights
  • During Q1 2022, the Company focused on bringing online new canopy in Barry, Illinois and Athol, Massachusetts and preparing for the imminent start of adult-use sales at the Rochelle Park dispensary in New Jersey. The Company completed its first harvest at the Barry greenhouse on March 29th, and began planting an additional 37,000 square feet of canopy in Athol subsequent to the end of the quarter. The Company also launched its value segment brand, Simply Herb, which is now sold in all current markets which the Company operates. The Company ended the quarter with 20 operating dispensaries and 213,000 square feet of canopy across five states.
  • Subsequent to Q1 2022the Company completed an equity transaction to roll up all of the other existing members of Story of PA CR, LLC. The Company 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, the Company 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 to 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.
  • Lastly, subsequent to the quarter, AWH, MedMen NY, Inc. and MM Enterprises USA, LLC (CSE: MMEN) (OTCQX: MMNFF) (“MedMen”) signed a term sheet agreeing to settle their lawsuit in the Commercial Division of the Supreme Court of the State of New York in New York County. To settle the dispute, AWH will increase the transaction consideration by $15 million$4 million of which is contingent on the start of adult-use sales at a MedMen NY dispensary. The revised total consideration of $88 million remains significantly below recent precedent transactions. The parties have also amended certain terms in their previously announced transaction agreement, which they expect to close in the coming month. Upon closing, AWH will enter its seventh state.

Management Commentary

Q1 2022 was a transitionary quarter for Ascend as we made investments to launch the next phase of our growth story.

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.

Q1 2022 Financial Overview

Net revenue, which excludes intercompany sale of wholesale products, was $85.1 million, representing a 28.7% year-over year increase, primarily driven by new retail stores and higher wholesale volumes sold. Net revenue decreased 3.8% quarter-over-quarter, primarily driven by wholesale pricing pressure in Illinois and Massachusetts and lower average retail basket sizes in each of the states we operate in, except for Ohio.

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.

Q1 2022 gross profit was $23.4 million, or 27.6% of revenue, as compared to $30.8 million, or 34.8% of revenue, for the prior quarter. The decline was primarily driven by start-up costs incurred before the commencement of certain significant operations, which are expected to commence later this year.

Q1 2022 Adjusted Gross Profitwas $36.5 million, or 42.9% of revenue, as compared to $37.5 million, or 42.4% of revenue, for the prior quarter. Adjusted Gross Profit1 excludes depreciation and amortization included in cost of goods sold, equity-based compensation included in cost of goods sold, and non-cash inventory adjustments. Adjusted Gross Profit1 dollars decreased 2.7% quarter-over-quarter due to lower realized pricing in Illinois and Massachusetts. Retail Gross Profit and Wholesale Gross Profit both decreased sequentially, primarily driven by smaller basket sizes in the retail business and pressured wholesale pricing in Illinois and Massachusetts. Adjusted Gross Profitmargin on a consolidated basis increased 50 basis points quarter-over-quarter to 42.9%. This was primarily driven by higher intercompany sales as a percentage of wholesale sales in the quarter.

Total general and administrative expenses (excluding litigation settlement) for Q1 2022 were $33.2 million, or 39.0% of revenue, as compared to $31.6 million, or 35.7% of revenue, for the prior quarter. Operating expenses as a percentage of revenue were elevated during the quarter, as the Company increased staff to support cultivation expansions ahead of realizing the related revenue contributions.

Net loss attributable to AWH for the first quarter of 2022 was $27.8 million, or a loss of $0.16 per basic and diluted common share. This was primarily driven by 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.

Adjusted EBITDA1, which adjusts for tax, interest, depreciation, amortization, equity-based compensation, and other items deemed one-time in nature, was $16.4 million in Q1 2022. This represents a 17.1% decrease quarter-over-quarter. Adjusted EBITDA Margin1 of 19.2% represented a 309 basis point decrease compared to the prior quarter.

Non-GAAP Financial Information

This press release includes certain non-GAAP financial measures as defined by the United States Securities and Exchange Commission (“SEC”), including Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, and Adjusted EBITDA Margin. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP are included in the financial schedules attached to this press release. This information should be considered as supplemental in nature and not as a substitute for, or superior to, any measure of performance prepared in accordance with GAAP.

Conference Call and Webcast

AWH will host a conference call on May 11, 2022 at 5:00 p.m. ET to discuss its financial results for the quarter ended March 31, 2022. The conference call may be accessed by dialing (888) 390-0605 with conference ID 72077468. A live audio webcast of the call will also be available on the Investor Relations section of AWH’s website at and will be archived for replay.

About Ascend Wellness Holdings, Inc.

AWH is a vertically integrated multi-state cannabis operator with licenses and assets in Illinois, Michigan, Ohio, Massachusetts, New Jersey, and Pennsylvania. AWH owns and operates state-of-the-art cultivation facilities, growing award-winning strains and producing a curated selection of products for retail and wholesale customers. AWH produces and distributes its in-house Simply Herb, Ozone, and Ozone Reserve branded products. For more information, visit

Additional information relating to the Company’s first quarter 2022 results is available on the Investor Relations section of AWH’s website at, the SEC’s website at and Canada’s System for Electronic Document Analysis and Retrieval (“SEDAR”) at


We define “Adjusted Gross Profit” as gross profit excluding non-cash inventory costs, which include depreciation and amortization included in cost of goods sold, equity-based compensation included in cost of goods sold, start-up costs included in cost of goods sold, and other non-cash inventory adjustments. We define “Adjusted Gross Margin” as Adjusted Gross Profit as a percentage of net revenue. Our “Adjusted EBITDA” is a non-GAAP measure used by management that is not defined by U.S. GAAP and may not be comparable to similar measures presented by other companies. We define “Adjusted EBITDA Margin” as Adjusted EBITDA as a percentage of net revenue. Management calculates Adjusted EBITDA as the reported net loss, adjusted to exclude: income tax expense; other (income) expense; interest expense, depreciation and amortization; depreciation and amortization included in cost of goods sold; non-cash inventory adjustments; equity-based compensation; equity-based compensation included in cost of goods sold; start-up costs; start-up costs included in cost of goods sold; transaction-related and other non-recurring expenses; litigation settlement; and loss on sale of assets. Accordingly, management believes that Adjusted EBITDA provides meaningful and useful financial information, as this measure demonstrates the operating performance of the business. Non-GAAP financial measures may be considered in addition to the results prepared in accordance with U.S. GAAP, but they should not be considered a substitute for, or superior to, U.S. GAAP results.

The following table presents Adjusted Gross Profit for the three months ended March 31, 2022 and 2021:

1 Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA and Adjusted EBITDA Margin are a non-GAAP financial measures. Please see the “Supplemental Information (Unaudited) Regarding Non-GAAP Financial Measures” at the end of this press release for a reconciliation of non-GAAP to GAAP measures.

2 Total debt less cash and cash equivalents less unamortized deferred financing costs.

Original press release

Published by NCV Newswire
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