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Ascend Wellness (AAWH)

AWH is a vertically integrated operator with assets and partners in Illinois, Michigan, Ohio, Massachusetts and New Jersey. AWH owns and operates state-of-the-art cultivation facilities, growing award winning strains and producing a curated selection of products. AWH produces and distributes Ozone branded products. For more information, visit www.awholdings.com.

Company profile

Ticker
AAWH, AAWH.U
Exchange
Employees
Incorporated
Location
Fiscal year end
Former names
Ascend Wellness Holdings, Inc, Ascend Wellness Holdings, LLC
SEC CIK
Subsidiaries
Ascend Mass, Inc. • Massgrow, Inc. • AGP Investments, LLC • AWH Pennsylvania, LLC • Ascend Illinois II, LLC • AWH Fairview, LLC • Ascend Illinois, LLC • Revolution Cannabis - Barry, LLC • Springfield Partners II, LLC • AWH Fairview Opco, LLC ...
IRS number
830602006

Analyst ratings and price targets

Last 3 months
Current price
Average target
$7.50
Low target
$7.00
High target
$8.00
Seaport Global
Initiated
Buy
$7.00
22 Jul 22
Needham
Maintains
Buy
$8.00
12 May 22

Investment data

Data from SEC filings
Securities sold
Number of investors

Calendar

12 May 22
10 Aug 22
31 Dec 22
Quarter (USD) Mar 22 Dec 21 Sep 21 Jun 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 143.8M 143.8M 143.8M 143.8M 143.8M 143.8M
Cash burn (monthly) 3.89M (no burn) 6.9M 4.17M 3.42M 3.68M
Cash used (since last report) 16.86M n/a 29.89M 18.06M 14.79M 15.93M
Cash remaining 126.93M n/a 113.91M 125.73M 129.01M 127.87M
Runway (months of cash) 32.6 n/a 16.5 30.1 37.8 34.8

Beta Read what these cash burn values mean

Financial report summary

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Risks
  • Cannabis remains illegal under U.S. federal law, and enforcement of cannabis laws could change.
  • We may be subject to action by the U.S. federal government.
  • U.S. state regulation of cannabis is uncertain.
  • We are affected by the dynamic laws and regulations of the industry.
  • State regulatory agencies may require us to post bonds, maintain large insurance policies or post significant fees.
  • We may be subject to heightened scrutiny by Canadian regulatory authorities.
  • We may face limitations on ownership of cannabis licenses.
  • Our ability to expand our product offerings and dispensary services may be limited.
  • We face risks associated with licensing relating to supply, supply chain, and market constraints.
  • We may become subject to FDA or Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) regulation.
  • Cannabis businesses are subject to applicable anti-money laundering laws and regulations and have restricted access to banking and other financial services.
  • We are subject to proceeds of crime statutes.
  • We face risks related to U.S. tax provisions related to controlled substances.
  • We operate in a highly regulated sector and may not always succeed in complying fully with applicable regulatory requirements in all jurisdictions where we conduct business.
  • We may face difficulties in enforcing our contracts.
  • We have limited trademark and intellectual property protection.
  • We are and may continue to be subject to constraints on marketing our products.
  • We face risks related to the results of future clinical research.
  • We lack access to U.S. bankruptcy protections.
  • Cannabis businesses may be subject to civil asset forfeiture.
  • Our operational systems and networks have been, and will continue to be, subject to an increasing risk of continually evolving cybersecurity or other technological risks, which could result in a loss of customer business, financial liability, regulatory penalties, damage to our reputation or the disclosure of confidential information.
  • We are a holding company.
  • We face intense competition.
  • Competition for the acquisition and leasing of properties suitable for the cultivation, production and sale of medical and adult-use cannabis may impede our ability to make acquisitions or increase the cost of these acquisitions, which could adversely affect our operating results and financial condition.
  • We face risks due to industry immaturity or limited comparable, competitive or established industry best practices.
  • Our business is subject to the risks inherent in agricultural operations.
  • We may be adversely impacted by rising or volatile energy costs and dependent on inputs.
  • We may encounter unknown environmental risks.
  • We are dependent on key inputs, suppliers, and skilled labor.
  • We must attract and maintain key personnel or our business may fail.
  • We face an inherent risk of product liability and similar claims.
  • We may be exposed to infringement or misappropriation claims by third parties, which, if determined adversely to us, could subject us to significant liabilities and other costs.
  • Our products may be subject to product recalls.
  • Adverse changes in the wholesale and retail prices could result in earnings declines.
  • We may face unfavorable publicity or consumer perception.
  • Our business is highly dependent upon our brand recognition and reputation, and the erosion or degradation of our brand recognition or reputation would likely adversely affect our business and operating results.
  • We may face competition from synthetic production and technological advances.
  • We may have increased labor costs based on union activity.
  • We do not intend to pay dividends on our shares of Class A common stock and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our shares of Class A common stock.
  • Our voting control is concentrated.
  • Our capital structure and voting control may cause unpredictability in the price of our Class A common stock.
  • The market price for the shares of Class A common stock may be volatile, which may affect the price at which you could sell the shares of Class A common stock.
  • Sales of substantial amounts of shares of Class A common stock by our existing stockholders in the public market may have an adverse effect on the market price of the shares of Class A common stock.
  • A decline in the price of the shares of Class A common stock could affect our ability to raise further capital and adversely impact our ability to continue operations.
  • Additional issuances of shares of Class A common stock may result in further dilution.
  • We may face liquidity risks.
  • We are subject to increased costs as a result of being a United States company listed on the CSE.
  • We face costs of maintaining a public listing.
  • Anti-takeover provisions in our certificate of incorporation and bylaws and Delaware law could discourage a takeover.
  • We may issue shares of preferred stock in the future, which could make it difficult for another company to acquire us or could otherwise adversely affect holders of our Class A common stock, which could depress the price of our Class A common stock.
  • Our bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
  • It may be difficult to enforce civil liabilities in the U.S. under Canadian securities laws.
  • We are an SEC foreign issuer under Canadian securities laws and, therefore, are exempt from certain requirements of Canadian securities laws applicable to other Canadian reporting issuers.
  • We may acquire other companies or technologies.
  • We may face difficulties acquiring additional or traditional financing.
  • Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.
  • Material acquisitions, dispositions and other strategic transactions involve a number of risks for us.
  • We may be subject to growth-related risks.
  • We may experience risks relating to the closing of acquisitions or investments.
  • We may invest in pre-revenue and other revenue-generating cannabis companies which may not be able to meet anticipated revenue targets in the future.
  • There can be no assurance that our current and future contractual relationships or strategic alliances or expansions of scope of existing relationships will have a beneficial impact on our business, financial condition and results of operations.
  • Our sales are difficult to forecast.
  • Changes in our customer, product or competition mix could cause our product margin to fluctuate.
  • We have a limited operating history and a history of net losses and negative cash flows from operating activities, and we may not achieve or maintain profitability or positive cash flows in the future.
  • We face increased costs as a result of operating as a public company and our management will be required to devote substantial time to new compliance initiatives.
  • There is no guarantee that our current cash position, expected revenue growth and anticipated financing transactions will be sufficient to fund our operations for the next twelve months.
  • We are subject to a number of restrictive debt covenants under our loan agreements.
  • If securities or industry analysts do not publish or cease publishing research or reports or publish misleading, inaccurate or unfavorable research about us, our business or our market, our stock price and trading volume could decline.
  • We are eligible to be treated as an “emerging growth company” as defined in the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make the shares of Class A common stock less attractive to investors.
  • We have broad discretion in the use of our cash, cash equivalents, and investments and may not use them effectively.
  • Proposed legislation in the U.S. Congress, including changes in U.S. tax law, may adversely impact us and the value of shares of our Class A common stock.
  • We face exposure to fraudulent or illegal activity by employees, contractors and consultants.
  • Our reputation and ability to do business may be negatively impacted by the improper conduct by our business partners, employees or agents.
  • We face risks related to our information technology systems, and potential cyber-attacks and security breaches.
  • We face risks related to our insurance coverage and uninsurable risks.
  • We may be subject to litigation.
  • We may be negatively impacted by challenging global economic conditions.
  • We are subject to risks arising from epidemic diseases, such as the outbreak of the COVID-19 illness.
  • Our internal controls over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation.
Management Discussion
  • Revenue increased by $18,953, or 29%, during the three months ended March 31, 2022, as compared to the three months ended March 31, 2021, primarily driven by growth from our existing business, new site openings, and acquisitions. The current period also benefited from an increase in wholesale volume sold in Illinois, Massachusetts, and Michigan, partially offset by pricing pressure across the markets in which we operate. During the three months ended March 31, 2022, we recognized incremental revenue from acquisitions of $3,297, including $144 related to the Ohio cultivation site acquired during the second quarter of 2021. New dispensaries opened during 2021 contributed $18,726 to our revenue growth, which was partially offset by a decrease of revenue from existing dispensaries of $4,110. Additionally, increased production and sales from our cultivation and manufacturing sites contributed $1,040. As of March 31, 2022, we had 285 SKUs for our cultivation products, compared to 106 SKUs as of March 31, 2021.

Content analysis

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