The following is a summary of the Ascend Wellness Holdings, Inc. (AAWH) Q1 2024 Earnings Call Transcript:
Financial Performance:
Ascend's Q1 2024 revenue net of intercompany sales stood at $142 million, marking a 25% increase over last year due to new dispensaries and a strong wholesale business.
They reported an adjusted EBITDA of $32.5 million, up 39% from last year, coupled with a year-over-year margin expansion of 239 basis points.
The company ended the quarter with a robust balance sheet: $73 million of cash and equivalents, coupled with a successful generation of profits further supporting cash flow from operations.
Ascend's gross wholesale revenue grew by 35% year-over-year, reaching $79 million, primarily due to increases in New Jersey, Massachusetts, and Pennsylvania.
Business Progress:
In Q1 2024, the company opened eight new dispensaries and acquired four more in Maryland.
Seven new dispensaries across existing states are in the pipeline, aligning with their strategy to densify and scale in existing markets.
Agreements are being finalized with two dispensaries in Illinois to open this month, with plans to open a third partner dispensary in Q3.
Approximately 51% of total retail sales came from AWH produced products – an approach set to maintain a balanced portfolio.
The company is preparing for the launch of adult use sales in Ohio this summer, with a supply strategy involving their own grown products and third-party relationships.
Ascend expressed plans to expand the retail portfolio by over 50% in the near term, which includes partnerships in New Jersey and Illinois.
Management highlighted increases in competition and pricing pressure in Illinois and New Jersey markets due to the emergence of more dispensaries.
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