Ascend Earnings + Call Notes
Brand leader continues to hum.
$126.1M Revs; est. $119.8M
$29.1M AEBITDA; est. $26.2M
$58.3M GP; est. $49M
46.2% GM; est. 40.9%
$5.3M Op Income; est. $0.5M
($9.8M) NI; est. ($23.9M)
($0.05) EPS; est. ($0.15)
$22.5m OPCF
$19.5m FCF
Generated Q2026 net revenue of $126.1 million and Adjusted EBITDA of $29.1 million
Scaled retail footprint to 55 locations, up from 48 at the end of Q1 2026
Grew market share by 5% across our seven markets.
^ retail transactions up 7% sequentially³
Filed definitive proxy statement for reverse stock split to enable uplisting to a major U.S. exchange; shareholder vote set for August 28, 2026
Management Commentary
“Last quarter, we said we believed we’d reached an important inflection point. This quarter’s performance confirms it.
Our growth strategy continues to demonstrate broad, system-wide results. We’re consistently adding retail doors, selling more of our own brands through them, and seeing strong financial performance as a result.
This model provides a compounding benefit to our core business and a very attractive return on invested capital, and we have ample runway to continue executing this playbook.
Beyond the numbers, we made real progress on two fronts that matter for the long term: continued movement toward broader federal rescheduling, and a concrete step toward listing on a major U.S. exchange.”
Sam Brill, CEO & Director of AWH
Call Notes
Growth strategy showing system wide results
Adding retail doors, selling more AAWH brands through them, seeing performance as a result
^ Strategy provides attractive ROIC
Filed applications w/ DEA for certain state level medical applications
Seeing some evidence of hemp market consumer shifting to legal market
Filed definitive proxy for reverse stock split, special meeting scheduled for Aug 28, split required to meet minimum required share price for uplisting to a major exchange
Trulieve uplisting is a clear sign that change is coming for cannabis industry
$126.1m revenues,
^ Up $9.2m or 7.9% QoQ
^ Meaningfully ahead of 2-3% growth expected / guided
$92.7m retail sales
Outperformance in OH
$29.1m aEBITDA, 23.1% margin (up $2.8m or 10.6% from Q1)
Growth strategy is to enter high-ROI retail expansion, and growth of vertical sales platform
Verticality across everything down in the quarter
Retail and wholesale moving together
Retail to 73.5% of total revenue this quarter
^ Up from 71.1% in Q1
Continued shift towards vertical sales
Average ticket held up better than broader market in 4 of 7 BDSA states during the quarter
Pricing power right now is relative, not absolute, AAWH doing better than markets operate in, even in states where ticket size came down
New doors opened across footprint, already contributing to incremental volume
6.7% transaction growth QoQ, expansion across most markets
Not 1 market carrying the growth, its most of the footprint moving together, while broader market continues to progress
New product pipeline is accelerating, from 95 to 199 over last 4 quarters, 49.6% sequential increase
Taking share per BDSA, share across 7 states grew almost 5% QoQ, even as overall market contracted
^ IL MA NJ combined, share held steady
New stores, faster innovation, share gains in a shrinking market is the same story told 3 diff ways - AAWH is taking business from competitors
Remain focused on ’26 priorities ; 1) retail densification, 2) consumer first retail model, 3) CPG strategy
^ Q2 results showed success across all pillars
39 stores when Sam took over, 12 months ago had 44 stores, now at 55 stores
Today at 56 stores, incl partner owned/operated locations. 45% retail door growth in 2 years
^ Every door broadens reach and provides increased operating leverage
Continue to open stores in NJ, with more stores in 2H
Added another partner store in NJ earlier this month
3 partner store opps remain in NJ pipeline, would put NJ at 9 locations by late ‘26
Scaled production capacity in NJ will support vertical sales at all planned dispensaries
MA retail doors can now move up to 6 (from 3)
Continue to look at ways to expand MA retail framework
3 retail dispensaries and 5 partner dispensaries supported in MA
Developed strategic relationship w/ OH operator, following close of transaction, OH will consist of owned + partner dispensaries
Expect to meet/exceed 60 store target by year end
Engaged in dozens of M&A conversations, see ample opportunity to expand beyond 60 store target
Customer-first strategy is compounding
Increased customer traffic by 20% during the quarter, 30% of those consumers were converted to loyalty members
Avg ticket held flat despite ongoing pricing pressure
Pay by bank reached 11.1% of transactions, up from 9.7% in Q1
Rolling out self service kiosk and self pay options at doors
Ran 498 in-store marketing activations for owned brands this quarter, and 437 third party activations
Net sales to loyalty members up over 3%
Driving premiumization of portfolio, focus on increasing revenue per gram
Ozone held #3 overall brand ranking by $ share through Q2, #1 in units
AAWH maintained #2 brand house by sales and units in IL NJ MA combined
Continue to expand Ozone offering w/ new liquid diamond vapes, full spectrum gummies, and macro dose gummies
Flower innovation never stops, launching a line of select strains for Ozone Signature line up in Q3
Limited edition ultra-premium Queen of King cola sells out before hits menus
Simply Herb held steady at #4 across 7 markets combined, MA rising to #3
Vape flavor expansion the focus for Q2, added more than 20 flavors to markets during the quarter
High Wired continued expansion across infused flower, shake, pre-rolls
High Wired gained 3.2% share during the quarter
High Wired only in market for 1 year, shows AAWH ability to introduce new products/brands
Expanding Honor Roll premium branded SKUs + packaging
Expanding ingestible portfolio w/ live resin and RSO SKUs, custom moulded gummies, and fast acting product improvements
SSS portfolio saw strength during the quarter, regained transaction volume lost from Q1 seasonality slump, finished Q2 at higher transaction R/Rs than started the year with
Wholesale revenue of $33.4m, down $400k or 1% QoQ; decline driven by NJ pricing + IL wholesale missed a few days of deliveries
$58.3m aGP
^ Up $4.4m or 8% QoQ
aGM at 46.2%
aEBITDA margin up 60bps QoQ
$67m cash, up $6.1m QoQ
^ Change driven by $22.5m OPCF, $13.1m used in investing, $3.3m used in financing activities
OPCF bi-annual interest payments made in first and third quarter of the year
$13.1m investing incl $5.8m total capex and $7.3m M&A related payments
CAPEX FY’26 still expected at $60m
^ $11m deployed so far this year
Remaining capex will be used for new store openings and maintenance capex
Additional capital available for tuck-in acquisitions to further densification strategy
2-4% top-line growth in Q3, driven by new store openings and M&A pipeline, partially offset by IL strike during entire month of July
Q3 QoQ growth in retail sales should still yield aEBITDA margin similar to Q2
Meaningful growth in aEBITDA in 2H and into ‘27
CPG side improvements made with new product launches and packaging has helped and allowed share gain
Retail growth main driver is additional retail doors added
Competition from new store openings is slowing
Loyalty strategy is doing well in keeping customers
Sam joined after decades as an investment professional, focused on high ROIC
^ Seeing many cash generating retail assets in the market today
^ A unique time to buy good assets due to distressed sellers, overleveraged, etc. people forced to sell them
^ Focused on a minimum 35% ROIC, including synergy
When seeing enforcement, seeing customers move from hemp channel into regulated channel
Still a decent amount of ramp remaining in the portfolio
/end
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CB1 has a position/ is an advisor and nothing herein should be considered advice.