Ascend Wellness OTCMKTS: AAWH reported second-quarter 2026 net revenue of $126.1 million, up 7.9% sequentially, as new dispensary openings and higher retail sales helped offset pricing pressure and competitive conditions in several markets.
Adjusted EBITDA rose 10.5% from the first quarter to $29.1 million, while adjusted EBITDA margin increased to 23.1% from 22.5%. Chief Executive Officer Sam Brill said the quarter supported management’s view that the company has reached an operational inflection point, with retail expansion, vertically integrated sales and product launches reinforcing one another.
Retail sales lead quarterly growth
Retail revenue totaled $92.7 million, an 11.5% sequential increase, and represented 73.5% of total net revenue, compared with 71.1% in the prior quarter. Chief Financial Officer Roman Nemchenko said new stores accounted for most of the retail increase, though the same-store portfolio also posted a strong quarter.
Wholesale revenue declined about 1% sequentially to $33.4 million. Nemchenko attributed the decline primarily to volume and pricing pressure in New Jersey, as well as missed delivery days in Illinois caused by a union strike that began near the end of the quarter. Bulk biomass sales in Michigan offset part of the decline, though those sales carried lower margins, he said.
The company said its Lansing, Michigan site remains closed for repairs. The Illinois strike has since ended and operations have resumed at full capacity, according to Nemchenko.
Ascend’s adjusted gross profit increased 8% sequentially to $58.3 million, while adjusted gross margin was relatively flat at 46.2%.
Store network expands, with Ohio and New Jersey in focus
Ascend ended the second quarter with 55 stores, including partner-owned and operated locations, and said it currently operates or supports 56 locations. Brill said the company had 39 such locations when he became CEO in late August 2024 and had 44 locations a year ago.
The company expects to meet or exceed its target of 60 stores by year-end. In New Jersey, Ascend opened a location in Eatontown on April 20 and added a partner store in Matawan after the quarter ended. It has three additional partner-store opportunities in its pipeline, which could bring its New Jersey presence to nine locations by year-end. Its partner store in Marlton received approval from the state’s Cannabis Regulatory Commission after the close of the quarter.
Massachusetts raised the cap on retail licenses an operator can own from three to six in April. Ascend currently has three Ascend-branded dispensaries and supports five partner-owned and operated dispensaries in the state.
In Ohio, the company has developed an approved strategic relationship with an operator acquiring several dispensary licenses, subject to regulatory approval. Brill said Ohio remained one of Ascend’s strongest retail markets.
During the question-and-answer session, Brill said Maryland remains a stable market for Ascend but has a four-store ownership cap and a moratorium that limits additional retail expansion for the company in the near term.
Transactions, loyalty and product launches support market-share gains
Total transactions increased 6.7% sequentially, with growth across most markets. Brill said traffic rose nearly 20% sequentially, while 31% of new customers joined the company’s loyalty program. Active monthly loyalty shoppers increased 4% from the first quarter, and net sales to loyalty members grew 3.2%.
Ascend said average ticket performance exceeded each state’s broader BDSA pricing trend in four of its seven markets, despite broader cannabis-market compression. The company also cited nearly 5% sequential market-share growth across its seven-state footprint, even as the overall market contracted. In Illinois, Massachusetts and New Jersey combined, its share was steady.
The company launched 199 new products during the quarter, compared with 133 in the first quarter. Brill said the faster product-launch pace, packaging changes and product improvements have supported growth in Ascend’s consumer packaged goods portfolio.
Its Ozone brand ranked third overall among brand houses across its seven markets by dollar share through the second quarter and first by units, according to Brill. The company is planning to introduce its Ozone Signature flower line in primary markets during the third quarter. Ascend also highlighted share gains for its High Wired infused-product brand and continued expansion of its Honor Roll pre-roll and Effin’ edibles portfolios.
Cash rises as company targets further growth
Ascend ended the quarter with $67 million in cash, up $6.1 million from the first quarter. The company generated $22.5 million in net cash inflows from operations, while using $13.1 million for investing activities and $3.3 million for financing activities.
Capital expenditures totaled $5.8 million during the quarter, including $2.8 million for new store build-outs. The company maintained its full-year capital expenditure expectation of about $20 million, with most remaining spending expected to support new stores and maintenance at cultivation and manufacturing facilities.
Brill said Ascend is engaged in dozens of merger-and-acquisition discussions and is seeking opportunities that can produce at least a 35% return on invested capital, including synergies. He characterized the targets as cash-generating retail assets that may be available from distressed or overleveraged sellers.
For the third quarter, Ascend expects sequential revenue growth of 2% to 4%, driven by new-store ramp-ups and its M&A pipeline. Management said the outlook will be partly offset by the effect of the Illinois union strike on wholesale sales during July. Despite that disruption, Nemchenko said the company expects adjusted EBITDA margin to remain similar to its second-quarter level.
Management also discussed potential industry regulatory catalysts. Brill said a federal action intended to close the unregulated intoxicating-hemp loophole is scheduled to take effect before year-end unless changed, which the company expects could shift demand toward regulated cannabis channels. Ascend has also scheduled an Aug. 28 special meeting for shareholders to vote on a proposed reverse stock split, which management said is intended to help meet the share-price requirement for an uplisting to a major U.S. exchange.
About Ascend Wellness (OTCMKTS:AAWH)
Ascend Wellness Holdings, Inc 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.
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