Ascend Earnings + Call Notes
Brand leader continues retail expansion.
$116.9M Revs; est. $115.5M
$26.3M AEBITDA; est. $23.8M
$44.9M GP; est. $38.3M
$2.5M OI; est. ($5.9M)
38.4% GM; est. 33%
46.1% AGM
Generated Q1 2026 net revenue of $116.9 million and Adjusted EBITDA of $26.3 million
51-location footprint to date, with five dispensaries added in 2026
Ranked No. 2 brand house in Illinois, Massachusetts and New Jersey combined in Q126
Rescheduling poised to unlock immediate and near-term benefits, with potential further impact from follow-on actions
Management Commentary
Our first quarter performance highlights the improved strength of our operational foundation. Amid weather-related closures and a challenging operating environment, our operations proved resilient.
We believe this marks an important inflection point as we execute our 2026 priorities, specifically through further retail densification, the continued enhancement of our customer-first retail model, and the deployment of our CPG strategy designed to capture high-margin sales and optimize our product mix.
Densification puts us on a clear path to drive topline growth in the coming quarters, and we look forward to realizing the benefits of the operating leverage we have built.
Looking ahead, the Trump Administration’s move to reschedule medical cannabis to Schedule III brings real benefits for patients, medical research, and access, while supporting the industry as a whole.
As details emerge following the Drug Enforcement Administration’s anticipated hearing this summer on adult-use cannabis rescheduling, we are encouraged and are actively evaluating the potential immediate and near-term benefits for our operations.”
Call Notes
Cannabis reform shifting,
^ now translated to action with rescheduling announcement
Rescheduling could unlock greater access to capital and financial services, credit card acceptance, and renewed institutional interest.
Actively exploring pathways to uplist to major exchange
Evaluating 280e tax provision given new guidance
Q1 demonstrated resilience in the face of seasonality and industry headwinds
Revs and Adj EBITDA ahead of guidance range and market expectations
Net revenue of $116.9m, down 3% QoQ ; as expected due to seasonality and severe winter weather across northeastern footprint
Favorable product mix increased retail revenue to 71.1% of revenue, up 60bps QoQ ; vertical sales focus
Underlying demand remains healthy, transaction volumes remain stable, sold more units YoY
In markets with consistent pricing, transaction volumes accelerated
Deliberate shift to consistent and transparent pricing, driving higher frequency of visits
Actively replicating pricing model into all markets
Improved quality and appeal of brand, customers are increasingly choosing them
GP fell 1.4% to $53.9m,
Adj GP up 70bps to 46.1% margin
Adj EBITDA of $26.3m or 22.5% margin
QoQ lower sales resulted in reduced absorption of fixed costs
Capital base remains strong, $60.9m cash and no debt maturities until July 2029
Continued driving densification strategy, opened 5 new stores this year, 2 in northeast and 3 in Midwest
Opened NJ dispensary on 4/204 partner store opportunities remain in NJ pipeline
Retail pipeline includes 10 additional stores
Should be at at least 60 stores by YE
Will expand retail expansion past 60 store target
Incremental retail revenue will drive operating leverage and should lead to improved margin and profitability
Customer first retail offering, improving in-store experience ; customers responding positively4.6 of 5 stores google retail rating
Engagement strengthened meaningfully, monthly review volume increasing for locations
Menu refinements prioritizing in demand products
Over 370 retail pop ups during the quarter
Ascend Pay adoption accelerated from 6.2% in Q4 to 8% in Q1, 29% increase
Streamlining payments and enabling faster checkouts across network
Loyalty membership up 34% QoQ
89% of transactions in Q1 tied to Ascenders Club members, who spent 20% more per transaction, visit more often, spend more per visit, and buy AAWH brands vs. others
^ all improves margins
Ascend reached #2 brand house by sales and units in IL MA NJ combined, 3 of the most competitive markets in the country
Moved from outside to #2 in under 1 year, driven by quality improvements and portfolio breadth
NJ MA IL m/share grew 11% QoQ
Infused flower portfolio up 37.5% QoQ
High Wired gained 44% share QoQ, ranked #1 infused flower brand across the 3 states
High Wired superior inputs vs. competition
Reaching #1 in a category is a meaningful result, only introduced High Wired brand in 2025
Ozone flagship brand, after a year of focus/investment to reach highest quality standards
Improvement in flower, strain diversity, and product quality across facilities
Upgraded Ozone packages and visuals in line w/ quality increase
Launched live spectrum Ozone gummies in IL MA NJ
Ozone drove 2.6% vertical sales launch after relaunch
Budtenders now actively recommending Ozone products because they believe in it, a strong signal of genuine brand health
Launched Honor Roll, 100% full flower pre-rolls
Launched High Wired sugar caps and liquid diamond vapes
Launched new King of Queen Cola SKUs
Meaningful developments at state level, including in hemp regulation
Regulatory updates in MA improving market environment, increasing stores to 6 per operator and increasing purchase limits, as well as ownership rules allowing partnerships w/ social equity operators
Could improve MA platform and increase vertical sales of MA platform
Seeing increased ticket sizes post-MA regulation change
Seeing shift of consumers shifting into regulated market vs. hemp market
Licensed operators positioned to compete for share of hemp market demand as consumers shift to regulated market
Densification strategy provides clear runway for growth in coming quarters, will realize operating leverage
$83.1m retail sales, down 2.2% QoQ, decrease driven by holiday spending and seasonality
Pricing pressure across footprint, offset by new stores
$33.8m wholesale revenue, down 5% QoQ
Softer sales in Jan/Feb, offset by orders in March$24.8m cash decrease QoQ,
$19.4m net cash outflows from operations, incl $17m outflows from arbitration Q1 capex of $1.8m in store build outs and $3.4m in cult/manu investments
$20m capex expected FY’26
Majority of facility spend behind AAWH, most now budgeted towards new store openings
Tuck in acquisition capital available to drive densification strategy
Temporarily suspended cultivation operations in Lansing Michigan to remediate a fire, do not expect material impact on MI business
2-3% top line growth into Q2, driven by store openings
Adj EBITDA expected in low-20% range in Q2To date resilience from a volume perspective, consumers continue to buy more, continue to see volumes increase
^ one of the strongest industry wide tailwinds is the consumer
Excited about changes in MA, deliberately pointed that out, will bring health to vertical state operators who can create more density
As get more vertical sales in MA and can grow store count organically and with partners, state should get more healthy
Wouldn’t open more stores in MA, more than enough stores, more of a consolidation play
Stores have outpaced market as a whole, not the barometer for entire markets
Continue to see sales momentum stay strong but cant particularly contribute it to hemp ban, may be a reason but cant say for sure
Hard to quantify portion of business as medical or adult use, all licenses started as medical licenses
Main purpose of ROOTS program isn’t margin expansion, in some of the nation’s most competitive markets, all fighting for customers, all about customer retention and having unique experiences and the right rewards
/end
If you’d like to help Mission [Green] change federal cannabis policies, please click here.
CB1 has a position/ is an advisor and nothing herein should be considered advice.