Ascend Wellness Holdings Reports $128M Revenue, Faces Competitive Pressures

Ascend Wellness Holdings, Inc. (AWH) reported a net revenue of $127.997 million for the three months ended March 31, 2025, a decrease of 10% compared to $142.410 million in the same period last year. The decline in revenue was primarily attributed to increased competition and pricing pressures in key markets such as Illinois and New Jersey, which offset gains from new store openings and adult-use sales in Ohio. The company's gross profit also fell to $39.561 million, representing a gross margin of 30.9%, down from 36.5% a year earlier, largely due to the same competitive pressures.

Operating expenses decreased significantly to $37.075 million from $49.462 million, reflecting a 25% reduction driven by lower compensation costs and strategic cost-saving initiatives. Despite the reduction in operating expenses, AWH reported an operating profit of $2.486 million, slightly down from $2.575 million in the prior year. The company experienced a net loss of $19.258 million, compared to a loss of $18.163 million in the same quarter of 2024, with an effective tax rate of 134.1% on gross profit.

In terms of operational developments, AWH continues to expand its footprint, operating 41 retail locations as of March 31, 2025, with plans to reach 60 locations in the medium term. The company sold approximately 56,000 pounds of wholesale product during the quarter, an increase from 46,000 pounds in the previous year. AWH's workforce has grown to approximately 2,200 employees, reflecting its ongoing expansion efforts.

Strategically, AWH has been active in acquisitions, including a recent agreement to acquire an adult-use dispensary in Illinois, which is subject to regulatory approval. The company also entered into a loan agreement to provide financing to a third party, further solidifying its operational influence in the cannabis market. As of March 31, 2025, AWH had cash and cash equivalents of $100.034 million, bolstered by positive cash flow from operations and additional financing obtained during the quarter.

Looking ahead, AWH's management remains focused on navigating the competitive landscape while pursuing growth opportunities through new dispensary openings and partnerships. The company plans to continue accessing capital markets for funding to support its operations and expansion initiatives, although it acknowledges the inherent risks associated with the cannabis industry, including regulatory challenges and market volatility.