Ascend Wellness Targets Cincinnati to Maintain its Rapid Growth Momentum

The TDR Three Takeaways

1. Strategic Location and Market Reach: Ascend Wellness Holdings’ new dispensary in Cincinnati, positioned near the Hard Rock Casino and the Kentucky border, expands its Ohio presence into the Greater Cincinnati area, home to over 2.25 million people. This strategic location places Ascend in a prime spot to serve this densely populated and growing market.
2. Strong Financial Performance and Market Readiness: Ascend has demonstrated robust financial growth, with consistent revenue and profit increases and a three-year CAGR of 223%. This positions them well for future expansion, especially with Ohio’s potential legalization of adult-use cannabis sales, supported by Governor DeWine’s advocacy.
3. Growth Focus and Operational Efficiency: Ascend’s commitment to growth is evident in its operational strategies, including the planned acquisition of Ohio Patient Access LLC and investments in advanced cultivation facilities and product development. These efforts strengthen Ascend’s market presence and prepare it for expanding into the adult-use cannabis market.

Ascend Wellness Holdings, Inc. (CSE: AAWH.U) (OTCQX: AAWH), a cannabis company with operations spanning several states, recently inaugurated a new dispensary at 824 Reedy St, Cincinnati, Ohio. This outlet, positioned strategically next to the Hard Rock Casino and a short distance from the Kentucky border, is Ascend’s fifth in Ohio, contributing to its significant presence across a seven-state footprint, now boasting 35 dispensaries.

This expansion into the Cincinnati area, part of the Cincinnati, OH–KY–IN Metropolitan Statistical Area as defined by the United States Census Bureau, taps into a densely populated region. With a population of over 2.25 million as per the 2020 U.S. Census, Greater Cincinnati ranks as the 28th largest metropolitan area in the United States and the largest in Ohio, surpassing even Columbus and Cleveland. Ascend’s new dispensary is well-placed to serve a vast and growing market, poised for further growth.

The Cincinnati dispensary, necessitating an active Ohio medical marijuana card for transactions, will maintain varying operating hours throughout the week. This serves as an ideal starting point for Ascend to gear up for Ohio’s anticipated legal recreational cannabis market. GOP Governor DeWine has been actively encouraging Ohio legislators to expedite the establishment of a legal cannabis market.

My independent financial analysis of Ascend reveals a company on a strong growth trajectory. In the last two years, Ascend has consistently increased its revenue and gross profit for eight straight quarters. The company boasts a three-year Compound Annual Growth Rate (CAGR) of 223% in revenue, underlining its rapid expansion in the sector. Moreover, earnings have risen in seven of the past eight quarters, indicative of a firm with a strong platform for future growth.

Rick Wilkins, Chief of Stores at Ascend Wellness Holdings, has expressed confidence in the Cincinnati store, which he believes will further strengthen Ascend’s footprint in Ohio. The store is anticipated to serve the medical needs of the community and is preparing to adapt to a potential new market with the expected legalization of adult-use cannabis sales in the second half of 2024.

Ascend’s operational efficiency is bolstered by a recent agreement giving it the option to acquire Ohio Patient Access LLC (“OPA”), with a view to benefiting from the economics under a support service agreement with OPA.

With its strategic placement in a populous and dynamic region, strong financial growth indicators, and a clear path for expansion, Ascend Wellness Holdings is well-positioned to capitalize on both the current medical and potential future adult-use cannabis markets in Ohio.

At TDR, we will continue to follow Ascend Wellness and will be launching formal in-depth research on the company later this month.