Ascend Wellness Q2 2026 Earnings Report

Ascend Wellness EPS Results

• Actual EPS: -$0.05
• Consensus EPS: -$0.12
• Beat/Miss: Beat by +$0.07
• One Year Ago EPS: N/A

Ascend Wellness Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Ascend Wellness Announcement Details

• Quarter: Q2 2026
• Date: 8/12/2026
• Time: After Market Closes
• Conference Call Date: Wednesday, August 12, 2026
• Conference Call Time: 5:00PM ET

Ascend Wellness (OTCMKTS:AAWH) engages in the cultivation, manufacture, and distribution of cannabis consumer packaged goods in the United States. The company offers flower, pre-rolls, concentrates, vapes, edibles, tinctures, and other cannabis-related products under the Common Goods, SimplyHerb, Ozone, Ozone Reserve, Royale, Tunnel Vision, Miss Grass, Lowell Smokes, Edie Parker, 1906, and AiroPro brands. It also owns, operates, and manages cannabis cultivation facilities and dispensaries. The company sells its products through company-owned retail stores and third-party licensed retail cannabis stores. Ascend Wellness Holdings, Inc. was incorporated in 2018 and is headquartered in New York, New York.

Ascend Wellness Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q2 revenue rose 7.9% sequentially to $126.1 million, while adjusted EBITDA increased 10.6% to $29.1 million and margin expanded to 23.1%, supported by stronger retail sales and operating leverage.
• Positive Sentiment: Retail sales grew 11.5% sequentially to $92.7 million, transactions increased 6.7%, and retail accounted for 73.5% of revenue. Ascend’s footprint reached 56 locations, and management expects to meet or exceed its 60-store year-end target.
• Positive Sentiment: Management cited nearly 5% sequential market-share growth across its seven-state footprint, accelerating product launches, improving brand performance, and rising customer loyalty and traffic as evidence that Ascend is gaining share despite overall market contraction.
• Positive Sentiment: Federal cannabis rescheduling proceedings have advanced to the briefing stage, while applications under the DEA registration pathway and an expected year-end crackdown on intoxicating hemp products could improve industry normalization and shift demand toward regulated operators.
• Negative Sentiment: Management guided to 2%–4% sequential revenue growth for Q3, with Illinois’ month-long union strike expected to weigh on wholesale sales. The company also continues to face pricing pressure, competitive intensity, and a closed Michigan cultivation site undergoing repairs.

Presentation

[Operator]

Good afternoon, and thank you for standing by. Welcome to Ascend Wellness Holdings Q2 2026 earnings call. Before proceeding, the company would like to remind you that the following discussion and presentation contains various forward-looking statements or information. These forward-looking statements or information are subject to risks and uncertainties that may cause actual results to differ from historical or anticipated results. For more information on the risks and uncertainties, please refer to today's earnings release and Ascend's SEC and SEDAR filings, including their most recent report on Form 10-K and quarterly report on Form 10-Q. During today's call, the company will be referring to non-GAAP financial measures such as adjusted EBITDA. Reconciliations to the most directly comparable GAAP measures are in the appendix to the presentation and in the company's earnings release. I am pleased to introduce the Ascend management team joining us on today's call.

[Operator]

We will begin with Sam Brill, Chief Executive Officer and Director, who will provide an overview of the key operational developments over the second quarter of 2026. After that, Roman Nemchenko, Chief Financial Officer, will review the company's financial results for the quarter. With that, I'd like to turn the call over to our first speaker, Sam Brill. Sam, please go ahead.

[Sam Brill, CEO at Ascend Wellness Holdings]

Thank you, operator. Good afternoon, everyone, and thank you for joining today's call. On our last call, we said we believed we had reached an important inflection point. This quarter's performance confirms it. Our growth strategy continues to demonstrate broader system-wide results. We're consistently adding retail doors, selling more of our brands through them, and seeing strong financial performance as a result. This model provides compounding benefits to our core business, a very attractive return on invested capital, and we have ample runway to continue executing this playbook. Before I get into the details, I want to provide an update on where things stand on federal reform and its impact on the capital markets level for Ascend. The DEA's administrative hearing process on broader rescheduling concluded on July 15th. The matter is now in briefing.

[Sam Brill, CEO at Ascend Wellness Holdings]

We don't have a firm timeline for a final ruling, but moving through the hearing and into briefing is itself progress, and we remain optimistic given the strong rescheduling support demonstrated by the testimony from expert DEA witnesses during the hearing. Under the exemption pathway, created alongside the Schedule III reclassification order, we filed applications with the DEA to register certain state-level licensed medical cannabis operations, which requires a DEA response within six months. This is a concrete near-term step that lays the groundwork for broader normalization across the industry. On the hemp side, federal action to close the unregulated intoxicating hemp loophole is scheduled to take effect before the end of the year, barring any last-minute changes. When it goes into effect, we expect it to be a tailwind for licensed regulated operators like Ascend as demand shifts from the unregulated channels into legal markets.

[Sam Brill, CEO at Ascend Wellness Holdings]

We are already seeing some evidence of this in markets where states took action. On the capital markets front, we filed a definitive proxy, putting a reverse stock split of our Class A common stock to a shareholder vote. The special meeting is scheduled for August 28th. The split is required to meet the minimum required share price for an uplisting to a major U.S. exchange. If you're a shareholder of record, we encourage you to vote your shares ahead of the meeting. Every vote matters, and instructions are included in the proxy materials. We are not alone in taking this step. Other MSOs have completed similar reverse splits in pursuit of the same objective. We understand from major exchanges that upon broader rescheduling, beyond the April reclassification of medical cannabis, uplisting is expected to become available for the industry.

[Sam Brill, CEO at Ascend Wellness Holdings]

This could be an exciting next step for the cannabis sector as it expands what's possible for our business. This includes potentially broadening our access to capital and expanding our investor base, opportunities that have long been out of reach for the cannabis industry. We applaud Trulieve for becoming the first U.S. cannabis company to uplist onto a major exchange. It's a clear sign that the ground is shifting for cannabis operators generally, not just for us. With that, let's turn to the quarter. Q2 2026 net revenue was $126.1 million, up 7.9% sequentially. That's meaningfully ahead of the 2%-3% sequential growth we discussed last quarter. This is despite continued pricing pressure and competitive intensity in a handful of markets, partially offset by outperformance in Ohio. Adjusted EBITDA was $29.1 million, with a margin of 23.1%, up $2.8 million or 10.6% from Q1.

[Sam Brill, CEO at Ascend Wellness Holdings]

As I noted at the top of the call, our growth strategy is centered in high ROI retail expansion and, in turn, the growth of our vertical sales platform. This verticality was the common thread across everything we did this quarter. This isn't a wholesale story or a retail story in isolation. It's both moving together. Retail grew to 73.5% of total net revenue this quarter, up from 71.1% in Q1, continuing our shift towards higher margin, vertically integrated sales. Our average ticket also held up better than the broader market in four of seven states this quarter, outpacing each state's own BDSA pricing trend on a sequential basis. That tells us something important. Pricing power right now is relative, not absolute. By that measure, we're doing better than the markets we operate in, even in states where our own ticket size came down.

[Sam Brill, CEO at Ascend Wellness Holdings]

New doors continue to open across our footprint this quarter, and they're already contributing to incremental volume. All the transactions grew 6.7% sequentially, with expansion across most of our markets. The breadth here matters. This isn't one hot market carrying the number. It's most of the footprint moving in the same direction at the same time while the broader cannabis market continues to compress. Our new product pipeline is accelerating, too. New launches have gone from 95 to 106 to 133 to 199 over the last four quarters, a 49.6% sequential increase, our fastest innovation cadence yet. We're taking share. Per BDSA, our share across our seven-state footprint grew nearly 5% sequentially, even as the overall market contracted. In Illinois, Massachusetts, and New Jersey combined, our share held steady.

[Sam Brill, CEO at Ascend Wellness Holdings]

Put together, new stores, faster innovation, and share gains in a shrinking market are really the same story told three different ways. We are taking business from competitors at a moment when the overall pie is contracting. We remain focused on our 2026 priorities: driving retail densification, deepening our customer-first retail model, and advancing our CPG strategy. Our Q2 results showed execution across all three pillars. When I took over as CEO in late August of 2024, our retail footprint stood at 39 stores, including partner-owned and operated locations. Twelve months ago, we had 44 locations. Despite closing an unprofitable Michigan store earlier this year, we ended Q2 at 55 stores. Today, we stand at 56 stores, including partner-owned and operated locations, an increase of about 45% in just under two years.

[Sam Brill, CEO at Ascend Wellness Holdings]

Every retail door has widened our consumer reach, reinforced our brand and market share positioning, and provided additional operating leverage through increased vertical sales. We continue to open stores in New Jersey, with more planned in the back half of the year. East Coasting opened in Eatontown on 4/20, and we added another partner store in Matawan earlier this month. We have an additional three partner store opportunities remaining in our New Jersey pipeline, which would put us at nine locations by the end of the year. Our partner store in Marlton was approved by the CRC after the close of Q2. Importantly, our scaled production capacity within New Jersey will be able to support vertical sales at all planned dispensaries. Massachusetts also gave us more room to grow this quarter. In April, the state legislature raised the cap on retail licenses an operator can own from three to six.

[Sam Brill, CEO at Ascend Wellness Holdings]

This provides real runway in a market where we have scaled production with plenty of capacity to support additional dispensaries. We continue to look for ways to grow within the state's regulatory framework. Our Massachusetts retail presence today consists of three Ascend dispensaries and five partner-owned and operated dispensaries that Ascend supports. Ohio remains one of our strongest-performing retail markets, and we continue to look for ways to grow within the state's regulatory framework. To that end, we developed an approved strategic relationship with an Ohio operator that is in the process of acquiring several dispensary licenses, pending regulatory approval. Following the close of that transaction, our Ohio retail presence will consist of both Ascend-owned and operated dispensaries and dispensaries that Ascend supports under this strategic relationship. We expect to meet or exceed our 60-store target by year-end.

[Sam Brill, CEO at Ascend Wellness Holdings]

We are engaged in dozens of M&A conversations and see ample opportunity to expand our retail footprint beyond that target. Our customers' first strategy is compounding. We increased our traffic by nearly 20% sequentially in Q2. Of those new customers, 31% converted into our loyalty program. Active monthly loyalty shoppers rose 4% sequentially. Net sales to loyalty members was up 3.2% from Q1. Average ticket held essentially flat despite ongoing market pricing pressure. On the technology side, pay-by-bank or Ascend Pay adoption reached 11.1% of transactions in Q2, up from 9.7% in Q1, a 14.8% sequential increase. We rolled out an upgraded self-service kiosk experience, giving customers direct access to their loyalty balance, and we're rolling out contactless path to pay across our stores. Both are aimed at a faster, more seamless checkout, which drives experience and retention.

[Sam Brill, CEO at Ascend Wellness Holdings]

We also ran 498 in-store marketing activations for our brands across our retail footprint this quarter, plus another 447 third-party activations across our core markets, continuing to build direct engagement with our customers at the point of sale. Sustained investment in our operations and processes has meaningfully improved product quality across our portfolio over the last 12-18 months. That's driving the premiumization of our branded portfolio with a focus on improving revenue per gram. We have never been more confident in our flower, which remains a key focus in our broader CPG strategy. Our flagship Ozone brand held the number three overall brand house ranking across our seven markets by dollar share through Q2, and we were number one in units. There's still room to improve.

[Sam Brill, CEO at Ascend Wellness Holdings]

According to BDSA, Ascend maintained its position as the number two brand house by both sales and units across our core markets of Illinois, New Jersey, and Massachusetts combined. We continue to expand the Ozone offering with the launch of Liquid Diamonds disposable vape, full-spectrum gummies, and macro dose gummies across multiple flavors. Furthermore, the elevation of our flower never stops. We are launching a line of select strains feeding into our new Ozone Signature lineup in our primary markets in Q3. The best demonstration of our outstanding quality is our limited edition ultra premium King of Queen Cola, which sells out to Legends and Platinum members before they get a chance to hit our regular menus. Simply Herb held steady at number four across our seven markets combined, with Massachusetts alone rising to number three.

[Sam Brill, CEO at Ascend Wellness Holdings]

Vape flavor expansion was the Q2 focus, where we added more than 20 flavors across markets, meaningfully diversifying the portfolio. High Wired continued its strain-specific expansion across infused flower, infused shake, and pre-rolls. The brand gained 3.2% share in our core markets. As a reminder, High Wired has been in the market for a little more than a year. We view this strong brand performance as a solid indicator of our ability to successfully launch best-in-class products and brands, even in the most competitive markets and product categories. Honor Roll continued to climb the pre-roll rankings sharply this quarter, moving off a low base in both New Jersey and Massachusetts, as the brand gained real traction with customers thanks to our 100% high-quality flower inputs.

[Sam Brill, CEO at Ascend Wellness Holdings]

We'll continue expanding this portfolio with new form factors in the coming months, including a glass tip 1.2 g, 10-pack, and two-pack offerings, along with upgraded premium packaging. Effin' edibles also moved up the rankings across participating markets this quarter, and we continue to expand the ingestible portfolio with live resin and RSO SKUs, custom-molded gummies, and fast-acting formulation improvements. To close, I'm proud of how this business is coming together. Operating leverage, meaningful regulatory tailwinds, disciplined execution of our CPG strategy, and continued retail densification are all reinforcing one another. None of this happens without the team behind it, and we continue to see Ascend becoming a place people want to build their careers. We believe this is the kind of momentum that builds, and we're looking forward to carrying it through the back half of the year.

[Sam Brill, CEO at Ascend Wellness Holdings]

With that, I'll turn it over to Roman to walk through our second quarter financial results.

[Roman Nemchenko, CFO at Ascend Wellness Holdings]

Thank you, Sam, and good afternoon, everyone. For the second quarter of 2026, the company generated $126.1 million of net revenue, which is an increase of $9.2 million or 7.9% quarter-over-quarter. Retail sales were $92.7 million, up by $9.6 million or 11.5% sequentially. Although new stores drove most of the increase, our same-store portfolio also had a strong quarter. Despite the continued pricing pressures from the markets, we've regained the transaction volume loss from Q1 seasonality slump and finished the quarter at higher transaction run rates than we started the year with. The data is encouraging, and we believe this trend can be attributed to our customer-centric approach to the business over the last two years. Wholesale revenue was $33.4 million, down $400,000, or roughly 1% sequentially.

[Roman Nemchenko, CFO at Ascend Wellness Holdings]

The decline was driven primarily by volume and pricing in New Jersey for the entire quarter, despite a strong finish in June. Illinois wholesale also missed a few days of deliveries as a result of the union strike that began at the end of the quarter. Bulk biomass sales in Michigan offset some of these declines but have much lower margins as we finish clearing the remaining biomass. We would like to note that our Lansing, Michigan site remains closed for repairs, and the strike in Illinois is now over, with the business back and operating at full capacity. Adjusted gross profit was $58.3 million, which is an increase of $4.4 million or 8%, while adjusted gross profit margin remained relatively flat at 46.2%. Adjusted EBITDA was $29.1 million, up $2.8 million or 10.5% from Q1. This is consistent with the growth in sales and adjusted gross profit.

[Roman Nemchenko, CFO at Ascend Wellness Holdings]

Adjusted EBITDA margin also increased slightly from 22.5% in Q1 to 23.1% this quarter. Turning to our balance sheet. We finished the quarter with $67 million of cash, up $6.1 million from Q1. The net change from the prior quarter reflects $22.5 million of net cash inflows from operations, $13.1 million used in investing, and $3.3 million used in financing activities. Cash flow from operations reflects operating income of the business without the biannual interest payments, which are made during the first and third quarters of the calendar year. Maintaining lean working capital, continuous cost management, and driving more sales through the retail channel were the largest contributors to the cash flow this quarter. Investing outflows of $13.1 million includes $5.8 million of total CapEx and approximately $7.3 million of M&A related payments.

[Roman Nemchenko, CFO at Ascend Wellness Holdings]

Total CapEx includes $2.8 million related to new store build-outs, with the remaining $3 million used for projects across our cultivation and manufacturing facilities. Financing outflows of $3.3 million mostly reflects a $2.9 million payment for a revenue share arrangement related to our Pennsylvania acquisition in 2022. CapEx for the full year is still expected to be about $20 million.

[Roman Nemchenko, CFO at Ascend Wellness Holdings]

With $11 million already deployed this year, most of the remaining CapEx will be invested on new store openings as well as maintenance CapEx for our cultivation and manufacturing facilities. Additional capital would also be available for tuck-in acquisitions to continue driving our densification strategy. Looking ahead to next quarter, we're expecting a 2%-4% top-line growth, driven by the ramp-up of new store openings and our M&A pipeline. This will be partially offset by the wholesale sales impact of the union strike in Illinois during the entire month of July. Despite the union strike, the sequential increase in retail sales should still yield an adjusted EBITDA margin similar to Q2. The growth in retail sales will be a meaningful source of EBITDA, and cash will grow for the second half of the year and into 2027.

[Roman Nemchenko, CFO at Ascend Wellness Holdings]

Overall, we're encouraged by the financial results and opportunities our densification strategy has brought this quarter, as well as what we're seeing ahead, and would like to thank the entire Ascend team for their continued hard work and dedication towards executing on this strategy. We're truly grateful for their efforts and recognize that our progress is driven by their commitment to executing our vision. We also appreciate everyone who joined today's call and look forward to our next update. With that, I will turn the call over to the operator for questions.

[Operator]

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your telephone keypad. You will hear a prompt that your hand has been raised. Should you wish to cancel your request, please press star followed by the two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Thank you. Your first question comes from the line of Brenna Cunnington from ATB Capital Markets. Please go ahead.

[Brenna Cunnington, Analyst at ATB Capital Markets]

Hey, all. Congrats on the strong results this quarter, and thanks for taking our questions. Just looking at Maryland, at a state level, it seems to be holding up pretty well here with a little bit of dilution from new stores opening. For Ascend, could you just provide us some color on how you're doing within the market and if new store openings might be ramping in the future?

[Sam Brill, CEO at Ascend Wellness Holdings]

Sure. Maryland has a hard cap of four, and I believe there's a moratorium that has a couple of years left on it. So adding stores is not currently an option in that state. I do not believe that we found ways to do partnerships that would work for regulators, so retail densification there is currently not an option until something changes. But that's been a very stable market for us, and it's certainly one of the bright highlights of the quarter, I think. Just historically, it's been very solid.

[Brenna Cunnington, Analyst at ATB Capital Markets]

Okay, understood. The retail transaction growth and market share growth was definitely encouraging in the quarter. Could you just provide some additional details on what's backing this? Specifically, if I recall, there were some product presentations overhauls that were done recently. So just kind of curious if there's been any outsized growth for these products following these initiatives, and if this perhaps also contributed to the strong same-store sales growth.

[Sam Brill, CEO at Ascend Wellness Holdings]

Yeah. On the CPG side, I think the improvements that we've made with new product launches and packaging, has definitely helped in terms of where we stand and how we've gained share on that CPG portfolio in terms of brand house and across our full seven-market footprint. But for retail, I would say that the main drivers of transactions is the additional retail stores that we continue to add, as the main driver, where on the same store basis, I think we're seeing a slowing of competition, like new store openings and things like that. And I would say our loyalty strategy is working well in terms of being able to keep customers, and keep that as flat to tough as possible.

[Brenna Cunnington, Analyst at ATB Capital Markets]

Great. Thank you so much for the color. I will jump back in the queue.

[Sam Brill, CEO at Ascend Wellness Holdings]

You got it. Thanks.

[Operator]

Thank you. Your next question comes from the line of Kenric Tyghe from Canaccord Genuity. Please go ahead.

[Kenric Tyghe, Analyst at Canaccord Genuity]

Thank you, and good evening. Intrigued by your commentary with respect to M&A cadence or rather cadence of M&A-related discussions. Could you speak to the nature of that in the sense of are we talking single store type tuck-in acquisitions where you are looking to backfill, or is it potentially parcels of stores in select markets where possible? How should we think about the color of those potential acquisitions and your appetite to execute on some of those discussions that you said are currently ongoing?

[Sam Brill, CEO at Ascend Wellness Holdings]

Yeah. I joined this company after decades as an investment professional, and we're focused on high return on invested capital. That is the key focus. And we're seeing many cash-generating retail assets available in the market today, because it's a unique time where these opportunities to buy these good assets are out there because there are distressed sellers that were over-leveraged and unfortunately are being forced to sell them. And so we're targeting a 35% minimum return on invested capital, including synergies, with the opportunities that we're seeing because of this unique time in this space.

[Kenric Tyghe, Analyst at Canaccord Genuity]

That's great. I appreciate that insight. And just further to that, I think the other piece of it here is, of course, the change in those dynamics as you were alluding to, Ohio up mid-teens in quarter on the hemp ban and some pretty strong enforcement of that ban. Could you speak to some of your own experience in markets and then just separate to that, just your thoughts around the potential hemp unlock and its impact on your growth algorithm exiting the year?

[Sam Brill, CEO at Ascend Wellness Holdings]

Yeah. I think the evidence is really in states where enforcement has taken place. And when you see the enforcement, you're seeing those customers move from the unregulated channel into the regulated channel with companies like Ascend. And we're certainly benefiting from that. It's hard to quantify exactly because, for example, Ohio is a state where that enforcement is taking place. But at the same time, it's before they started taking enforcement into like seriously, we were seeing significant growth in that market. So it's hard to separate how much of that is tailwind from the existing growth and from that enforcement. But there's definitely evidence that enforcement is part of that continued growth profile. And, we look forward to that coming to the rest of our markets.

[Sam Brill, CEO at Ascend Wellness Holdings]

If it happens on a federal level, we keep hearing that the total hemp market is somewhere in the $20 billion-$30 billion range. So if that TAM suddenly becomes available or at least part of that in the markets that we operate in, we're certainly going to benefit, and you're going to see a strong tailwind as customers move from unregulated to regulated channel.

[Kenric Tyghe, Analyst at Canaccord Genuity]

Thank you very much. Can I squeeze in just a quick final one? In the context of that backdrop and how quickly it's changing, your guidance would appear to read conservatively, in terms of your revenue guide. Separate that, as does your EBITDA margin profile, given what you achieved in quarter. Is it fair to say this is simply a case of a conservative guide given the unknowns, or how should we think through the evolution there? To my mind, one or the other has to give. It's either going to be higher growth than you're guiding to or a better margin profile if the growth number turns out to be broadly correct.

[Sam Brill, CEO at Ascend Wellness Holdings]

Yeah. Well, the hemp ban, I guess, is not scheduled to take place until late Q4. I'm not sure we're going to get a tailwind from that. But in terms of the store additions and that part of the growth, I think we're looking at some strength that we're reflecting, but also with the strike in Barry being disruptive for roughly a month, we're still evaluating the full fallout of that. While we did reflect some of that in that number, I think that's how we got there. But Roman, feel free to add.

[Roman Nemchenko, CFO at Ascend Wellness Holdings]

No, that's right. Look, I think we only had a partial benefit this quarter from some of the acquisition and M&A or new store opening activities, so you'll see a full quarter worth of performance, Q3 and more store openings in Q4. There's still a decent amount of ramp left in our portfolio. The guidance reflects those elements, with some softness for Barry impact as again, we're still evaluating the full amount of.

[Kenric Tyghe, Analyst at Canaccord Genuity]

Great. Thanks so much. I'll get back in queue.

[Sam Brill, CEO at Ascend Wellness Holdings]

Thank you.

[Operator]

Thank you. That ends our question and answer session. Ladies and gentlemen, this concludes today's call. Thank you for participating. You may all disconnect.

Participants

Executives

• Sam Brill, CEO
• Roman Nemchenko, CFO

Analysts

• Brenna Cunnington, Analyst at ATB Capital Markets
• Kenric Tyghe, Analyst at Canaccord Genuity