New York-headquartered cannabis company, Ascend Wellness Holdings, Inc. (CSE:AAWH) (OTCQX:AAWH) reported its financial results Tuesday for the first quarter ended March 31, 2024 disclosing revenue of $142.4 million, up by 24.7% year-over-year, and 1.6% sequentially.

“I want to extend my gratitude to all of our stakeholders for their dedicated efforts in delivering a solid first quarter," stated John Hartmann, CEO. "We’ve seen tremendous 25% year-over-year growth in revenue and a 39% increase in adjusted EBITDA, complemented by a 239-basis point expansion in our Adjusted EBITDA margin compared to the prior year. This quarter also marks our fifth consecutive period of gross wholesale growth. These achievements reflect the hard work of our team, and they underscore our commitment to sustained operational excellence and financial health."  

Q1 2024 Financial Highlights

• Net loss of $18.2 million during the quarter compared to $18.5 million in Q1 2023.  
• Adjusted EBITDA was $32.5 million, representing a 22.8% margin. Adjusted EBITDA increased by 39% and the margin improved by 239 basis points year-over-year. Adjusted EBITDA improved by 0.4% quarter-over-quarter and the Adjusted EBITDA margin was largely flat sequentially.  
• Gross profit was $52.0 million, or 36.5% of revenue, compared to $47.5 million, or 33.9% of revenue, in the prior quarter.
• Generated $3.9 million of cash flows from operations, representing the fifth consecutive quarter of positive operating cash flow. 
• As of March 31, 2024, cash and cash equivalents were $72.9 million and net debt was $237.6 million. 

Hartmann was one of the speakers at the recent Benzinga Cannabis Capital Conference in Florida who shared his professional expertise in a conversation about how to best attract retail consumers. If you missed this one, but want to learn all about the future of the cannabis industry join us at the upcoming Benzinga Cannabis Capital Conference this October in Chicago. Hear directly from key industry players, experts, investors, advocates and policymakers. Get your tickets now by following this link.

Business Highlights

• Opened two dispensaries in Q1 2024, in Cincinnati, Ohio and Monaca, Pennsylvania, bringing the total number of operating dispensaries across the network to 36.  
• Secured operating agreements with two additional partner dispensaries, bringing a total number of partner stores in the pipeline to four.  
• Operationalized second cultivation and manufacturing facility in Massachusetts, bringing a total number of facilities to seven with 255,000 sq. ft of active canopy. Further development at this facility is underway with plans to expand total cultivation across the portfolio to 260,000 sq. ft.  
• Entered into two long-term supply agreements in Maryland, providing both AWH and third-party branded products to serve retail and wholesale customers in the state.  

Price Action 

Ascend Wellness shares closed Monday market session 0.78% higher at $1.29 per share. 

See Also: Cannabis Acquisitions Pay Off: MSO Ascend Wellness Q4 Revenue Jumps 25% YoY To $140M

Zig-Zag rolling paper manufacturer Turning Point Brands, Inc. (NYSE:TPB) reported financial results Thursday for the first quarter ended March 31, 2024 with total net sales of $97.1 million, compared to $100.96 million in the same period of 2023. 

"We are encouraged by our first quarter results," stated Graham Purdy, president and CEO. "We believe the execution of our strategy has Zig-Zag back on a sustainable growth trajectory; Stoker's continued to grow and improved its market share; and the national launch of our FRE Modern Oral product is off to a good start."  

If you want to know more about the best ways to improve your business operations and profit margins, come and learn all about the future of the cannabis industry at the Benzinga Cannabis Capital Conference this October in Chicago. Hear directly from key industry players and policymakers. Get your tickets now by following this link, and access a 20% discount using the code JAVI20.

Q1 2024 Vs. Q1 2023 Summary 

• Zig-Zag products net sales increased by 11.5% to $46.7 million, accounting for 48% of total net sales in the quarter. 
• Gross profit increased 6.8% to $51.9 million  
• Net income increased 58.1% to $12.0 million from $7.6 million.  
• Adjusted net income increased 29.8% to $15.4 million ( net income)  
• Adjusted EBITDA increased 21.6% to $25.3 million
• Diluted EPS of $0.63 and adjusted diluted EPS of $0.80 compared to $0.41 and $0.62 in the same period one year ago, respectively.  
• Net debt on March 31, 2023 was $237.6 million. The company ended the quarter with total liquidity of $189.9 million, comprised of $130.9 million in cash and $59.0 million of asset-backed revolving credit facility capacity.  

During the quarter, the company repurchased 72,545 shares at a cost of $2.1 million.  

2024 Outlook

The company is maintaining its previous expectation of a full-year 2024 adjusted EBITDA of $95 to $100 million. 

Price Action

Turning Point Brands was trading 1.54% lower at $32.07 per share during Friday’s pre-market session.  

 Related Links: Zig-Zag Segment Stable, Says CEO As Turning Point Reports Profit Increase And 6.1% YoY Drop In Q4 Net Sales

Photo: Courtesy of YARphotographer via Shutterstock

Urban-gro, Inc. (NASDAQ:UGRO), a design-build provider to the cannabis industry released its financial results for the quarter ended March 31, 2024 and reaffirmed full year 2024 guidance. The Colorado-based company reported quarterly revenue of $15.5 million, compared to $16.8 million in the same period a year ago. 

“I’m pleased with the progress of our diversification strategy that leverages our professional services talent and continues to drive our evolution into the multi-sector focused professional services consulting firm that we are today," stated Bradley Nattrass, chairman and CEO. "Our performance in the first quarter reflected solid bottom-line improvement on both a sequential and year-over-year basis and was enhanced by our targeted actions to reduce our operating expenses. We remain focused on the elements of the business that we can control and are pushing ahead with our growth strategies to ensure that we can recapture sustained positive Adjusted EBITDA1 in the near term."  

Pro tip: Learn all about the future of the cannabis industry at the Benzinga Cannabis Capital Conference this October in Chicago. Hear directly from key industry players and policymakers. Get your tickets now by following this link, and access a 20% discount using the code JAVI20.

Q1 2024 Financial Summary

• Gross profit increased to $3.1 million, or 20% of revenue, as compared to $1.7 million in the fourth quarter of 2023, or 11% of revenue, and to $2.8 million, or 17% of revenue in the prior year period.  
• Operating expenses were $5.2 million, or 33.3% as a percentage of revenue as compared to $6.4 million, or 42.3%in the fourth quarter of 2023, representing a sequential decrease of $1.2 million, or 900 basis points as a percentage of revenue.
• Net loss was $2.1 million, or $0.18 net loss per share as compared to a net loss of $5.1 million, or $0.48 net loss per share in the prior year period.
• Adjusted EBITDA was a loss of $300,000 representing a $2.7 million improvement on a sequential basis and a $3.1 million improvement compared to the prior year.
• Cash was $700,000 versus $1.1 million at the end of the prior quarter, and the balance drawn on the $10 million lending facility was $2.0 million, a sequential decrease of $500,000 versus $2.5 million.

Nattrass also commented on this week's DEA's announcement that it supports cannabis reclassification from Schedule I to Schedule III of the US Controlled Substances Act. 

"We are encouraged by several credible reports in the media indicating that the U.S. Drug Enforcement Agency is supporting the U.S. Department of Health’s recommendation to reclassify cannabis from the most stringent schedule I to the less stringent schedule III," he said. "The successful rescheduling of Cannabis would serve as a long-awaited catalyst that we’ve anticipated to reinvigorate the industry through increased operator working capital that could be reinvested in facility upgrades and build-outs.”

Price Action

Urban-gro shares closed Thursday’s market session 3.53% lower at $1.93 per share.  

Photo: Courtesy of Rex Medlen via Pixabay