Ascend Wellness Holdings Reports Mixed Q3 Results, Net Loss Increases 150% Year-Over-Year

Ascend Wellness Holdings, Inc. (AWH) reported its financial results for the third quarter and the nine months ended September 30, 2024, showing a mixed performance in revenue and profitability compared to the previous fiscal period. The company generated total revenue of $141.6 million for the third quarter, a slight increase from $141.3 million in the same period of 2023. For the nine months, revenue rose to $425.6 million, up 12% from $378.4 million in 2023. The growth was attributed to increased wholesale operations and contributions from recent acquisitions, including the Devi Maryland acquisition.

Despite the revenue growth, AWH faced significant challenges in profitability. The company reported a net loss of $28.3 million for the third quarter, compared to a loss of $11.2 million in the prior year, marking a 150% increase in losses. For the nine months, the net loss reached $68.2 million, up from $28.9 million in 2023. The operating loss for the third quarter was $(2.4 million), a stark contrast to an operating profit of $3.5 million in the same quarter of 2023. The increase in losses was primarily driven by higher general and administrative expenses, which rose by 15% to $46.1 million in Q3 2024.

AWH's total assets decreased to $895.9 million as of September 30, 2024, down from $919.6 million at the end of 2023. Current assets also fell to $213.6 million, while current liabilities surged to $145.1 million, resulting in a working capital decline. The company’s accumulated deficit increased to $(383.6 million) as of September 30, 2024, compared to $(315.4 million) at the end of 2023.

Strategically, AWH has been active in acquisitions, including the purchase of two dispensaries in Chicago for approximately $10 million, pending regulatory approval. The company also completed the acquisition of Devi Holdings, contributing to its revenue growth. However, the company has expressed concerns about its ability to continue as a going concern, citing the need for future capital market access for additional funding.

In terms of debt management, AWH issued $235 million in senior secured notes in July 2024, which were used to prepay a portion of its existing credit facility. The company reported an increase in interest expenses, reflecting the higher debt levels and costs associated with refinancing efforts.

Overall, while Ascend Wellness Holdings, Inc. has seen revenue growth, it continues to grapple with significant net losses and rising operational costs, alongside ongoing strategic expansion efforts in the competitive cannabis market.