Cannabis multi-state operator (MSO) AYR Wellness Inc. (CSE:AYR) (OTCQX:AYRWF) reported on Wednesday the first quarter financial results for the three months ended March 31, 2024.

"2024 continues to be about execution for AYR, furthering the progress we made in 2023 by focusing on improving product quality and consistency, building a loyal retail customer base, rebuilding our CPG brand platform, and continuing to prioritize cost controls," David Goubert, president & CEO of AYR said.

Q1 2024 Financial Highlights

• Revenue totaled $118 million, up 0.3% year-over-year and 2.8% sequentially.
• Gross profit was $50.7 million, up 5% compared to the same quarter of fiscal 2023, and 2.6% compared to the prior period.
• Adjusted gross profit, a non-GAAP measure, was $62.6 million, up from $62 million and down from $65.3 million in the prior quarter and the first quarter of fiscal 2023, respectively.
• Operating loss was $2 million, down from $21.7 million operating loss in the first quarter of last year and $9.5 million in the prior period.
• Total operating expenses amounted to $52.6 million, down from roughly $70 million in the prior year's period.
• Adjusted EBITDA, a non-GAAP measure, came in positive at $29.1 million, representing a year-over-year increase of 10.6% and a 2.3% quarter-over-quarter decrease.
• Adjusted EBITDA margin, a non-GAAP measure, was 24.7%, compared to 22.4% in the prior year's quarter and 25.9% in the prior period.

Outlook

AYR Wellness anticipates revenue in the second quarter to be flat to modestly up compared to the first quarter of 2024, before generating stronger growth in the second half of 2024, replacing our previous guidance on the full-year 2024 outlook.

The company also continues to expect adjusted EBITDA margin to remain at roughly 25% for the year with normal quarterly fluctuations, and to generate positive cash flow from operations and free cash flow for the calendar year 2024.

Goubert said the company's team is focused on positioning AYR for success ahead of the key state-level catalysts on the horizon in Ohio, now that a panel the state lawmakers cleared 11 administrative rules this week for the state's medical and recreational marijuana programs.

He expects converting to adult use over the summer in Ohio, as well as in Florida and Pennsylvania, "where we hope to see adult use pass later this year." Ayr was one of the cannabis operators that opted to fund the proposal, known as Amendment 3, that would legalize recreational marijuana in Florida on the November 2024 ballot.

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AYRWF Price Action

AYR Wellness' shares traded 1.96% lower at $2.5 per share at the time of writing on Wednesday,