Ascend Wellness Q3 Earnings Call Highlights

Key Points

• Q3 revenue returned to growth, rising 4.2% year over year to $130 million. Adjusted EBITDA increased 7% sequentially to $31.1 million, with its margin expanding to 23.9%.
• Retail revenue rose 5.5% sequentially to $97.8 million, or 75.2% of net revenue, as new dispensaries helped offset a 3.6% decline in wholesale revenue. Ascend had 61 stores at the time of the earnings call, including partner-operated locations.
• Ascend expects Q4 revenue to grow about 1%–2% sequentially, with an adjusted EBITDA margin similar to Q3. The company generated $5.4 million in operating cash flow and ended the quarter with $63.6 million in cash.

Ascend Wellness OTCMKTS: AAWH reported third-quarter 2026 revenue of $130 million, returning to year-over-year growth as new dispensaries lifted retail sales and helped offset continued cannabis price compression.

Revenue rose 4.2% from a year earlier and 3.1% from the second quarter. Adjusted EBITDA was $31.1 million, up 7% sequentially, while the adjusted EBITDA margin expanded to 23.9% from 23.1%.

Chief Executive Officer Sam Brill said Ascend reached its medium-term target of 60 stores ahead of schedule. The company ended the quarter with 56 stores and had 61 at the time of the call, including partner-owned and operated locations.

“The store additions have really shifted a lot of the wholesale revenue into retail, so it is reflected more in the margins and the margin improvements that are in the numbers,” Brill said during the question-and-answer session.

Retail Growth Offsets Wholesale Decline

Retail revenue rose 5.5% sequentially to $97.8 million, accounting for 75.2% of net revenue, compared with 73.5% in the prior quarter. Chief Financial Officer Roman Nemchenko said new stores drove most of the increase. Sales at the same-store portfolio declined in line with third-quarter seasonality, although at a slightly slower rate than during the comparable period a year earlier.

Wholesale revenue fell 3.6% from the second quarter to $32.2 million. Nemchenko attributed the decline primarily to a union strike at the company’s Illinois facility that affected deliveries throughout July. The facility returned to full capacity in early August, inventory recovered to pre-strike levels and September was the quarter’s strongest wholesale month, he said.

Ascend recorded its highest quarterly transaction count, with transactions rising 6% sequentially and 14.9% year over year. Brill said the average ticket increased slightly from the second quarter despite price compression, while loyalty members accounted for 86% of transactions.

Adjusted gross profit rose approximately 8% sequentially to $62.9 million, and the adjusted gross profit margin expanded to 48.4% from 46.2%.

Cash Flow and Expansion Funding

Ascend generated $5.4 million in operating cash flow, including a $19.1 million semiannual interest payment made in July. That compared with a $2 million operating cash outflow in the third quarter of 2025. The company ended the latest quarter with $63.6 million in cash, down $3.4 million sequentially.

Investing outflows totaled $8.6 million, including $4.8 million in capital expenditures and approximately $3.8 million in acquisition-related payments. Nemchenko maintained the company’s full-year capital spending forecast of about $20 million, with $15.7 million deployed through the third quarter.

After quarter-end, Ascend obtained approximately $11 million through mortgage loans secured by five properties. The loans carry an 8.5% annual interest rate and mature in October 2031. Management said the proceeds would support expansion in existing markets.

Brill said Ascend is pursuing acquisition opportunities but cautioned that the timing of agreements can vary. He said recent investments were performing in line with expectations and that the company had previously reported returns on invested capital above 30%.

New Stores and Canada Licensing Deal

Ascend’s post-quarter openings included a dispensary in Evesham, New Jersey, operated with a social equity partner, and its seventh Ascend store in Ohio, in Lewis Center. A partner also opened a location in Plano, Illinois.

In Massachusetts, the company began operating two dispensaries under a consulting agreement while awaiting regulatory approval to close their acquisition. Brill said the deal would provide a vertically integrated medical license that Ascend expects to extend to its Massachusetts stores and cultivation facility.

Ascend also announced a licensing agreement with Canadian producer Atlantic Cultivation to bring High Wired infused pre-rolls and Ozone Liquid Diamonds vapes to Canada. Products are expected to begin reaching shelves in the first quarter of 2027. Brill described the arrangement as an initial test of the brands internationally and said it was not yet included in company projections.

Outlook Calls for Modest Revenue Growth

For the fourth quarter, Ascend expects revenue growth of approximately 1% to 2% from the third quarter and an adjusted EBITDA margin similar to the latest quarter’s level. Nemchenko said new-store ramp-ups and the acquisition pipeline should contribute to growth, partly offset by seasonal discounting and price compression.

Brill said new stores typically take more than a quarter to reach meaningful contribution levels, and he expects more of their impact in the first quarter of 2027. He also said the company had factored historically heavy fourth-quarter promotions, particularly in December, into its outlook.

On regulation, Brill said management expects demand to move into the regulated market when intoxicating hemp products come off shelves, though he noted that the federal deadline could shift again. He also said the outcome and timing of broader cannabis rescheduling remained uncertain.

About Ascend Wellness (OTCMKTS:AAWH)

Ascend Wellness Holdings, Inc. is a vertically integrated cannabis company that cultivates, manufactures, and sells cannabis products in the United States. The company serves both medical and adult-use markets, subject to applicable state regulations. Ascend's product portfolio includes flower, pre-rolls, vapes, concentrates, edibles, and other cannabis products sold under brands such as Ozone, Simply Herb, Common Goods, and &Shine. The company distributes products through its own retail dispensaries and through wholesale channels serving third-party cannabis retailers.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.