New York-based Ascend Wellness Holdings is a multi-state cannabis cultivator with operations in five states in the USA. The company trades on the CSE and recently completed their IPO in early May 2021 when the stock surged 22%. Ascend Wellness has a strong focus and strong branding but is this cannabis stock a buy?
Let’s take a deeper look at both the fundamentals and technicals for Ascend Wellness to see if this cannabis stock is a buy.
Ascend Wellness Fundamentals
Profile
HQ: New York, NY, USA
Founded: 2018
Symbol: AAWH (CSE)
Related: Should You Buy Cresco Stock?
Company Focus: Strong
Ascend Wellness Holdings is a multi-state operator with operations in Illinois, Michigan, Ohio, Massachusetts, and New Jersey. They built a lot of excitement with investors for their May 2021 IPO and opened trading on the day at $9.50. They are very new so there isn’t much for history but we’ll summarize them below.
Ascend Wellness Size: Neutral
Market Cap: US NA
Enterprise Value: NA
# of employees: 850
Markets: Neutral
Secondary: Canada
Majority Subsidiaries: MOCA LLC; Ascend NJ LLC; HealthCentral; Revolution Global
Company Operations: Neutral
Cultivation: 38,000 lbs. annually through their five states
Distribution:
They have 16 retail stores open now
Integration/Diversification:
Vertically integrated: Yes
Horizontally diversified: No
Ascend Wellness Financials: Strong
Revenue (ttm): $187.3 million
Outstanding shares (diluted): recent IPO included 10 million shares
WATCH: Ascend Wellness Technical Analysis
Company Management: Neutral
CEO & Founder: Abner Kurtin
CSO & Founder: Francis Perullo
CFO: Daniel Neville
CRO (revenue): Christopher Melillo
Related: Is Decibel Cannabis Stock a Buy?
Ascend Wellness Branding: Strong
They sell products through the Ozone brand. This includes flower, vapes, and gummies. Ozone Reserve is their premium brand. This is mainly flower and concentrate products. They also carry the Cookies brand, 1906 (infused products), and Airopro (vapes) brands.
Valuation: Weak
Current share price: US $9.50
52 week high/low: $8.26-9.85
Price to Sales: N/A (too new)
EV/Revenue: N/A
Price/book: N/A
Related: Why is Jushi Holdings a Strong Buy?
Financing: Strong
This May 2021 IPO raised $80 million through 10 million class A common stock shares at $8 per share.
Risks of Buying Ascend Wellness Stock: Medium
The risks of investing in any cannabis company are very high given the immaturity of the market and all competitors. This company has additional risk in that they are so new but that is mitigated a bit by their multistate presence and high potential revenues.
Ascend Wellness: Is this Cannabis Stock a Buy?
Ascend Wellness Holdings generated a lot of press with their Canadian IPO. Some were even calling them the hottest cannabis stock of 2021. We wouldn’t go that far but there is a lot to like.
They have a presence in mainly large markets, have high projected revenues ($190 million), and are timing the market well with some cannabis stocks recovering from early 2021 losses. They’ve raised funds through three rounds totaling around $176 million in total raised funds. This leaves them well capitalized.
The issues are that trading volume is low on their stock, the CSE is somewhat liquidity limited, and their debt is still pretty high at $370 million. Their highly held by insiders (24% of shares held by insiders) but the institutions do love them (11.6% of shares held by institutions).
Related: What are the Top 3 Psychedelic Stocks to Buy Now?
If they can continue to grow revenue without feeling pressured for overpriced mergers and acquisitions, they can then pay down debt and grow their stock price. The CEO, CFO, and CSO together make over $1 million dollars. Hopefully this high spending doesn’t carry over into all their business practices!
There is some to like here, but too much holding us back. We give them a neutral rating for now but watch for an updated analysis on them in early 2022 to see if that changes.
Ascend Wellness: Is this Cannabis Stock a Buy?
About Cannin: Your Cannabis Stocks Resource
78% of Cannin’s fundamentals prove true within 30 days or less on 100+ recommendations over the past 2 years.
Cannin is your #1 trusted resource for cannabis stocks. Our global team of experts evaluates all emerging cannabis stock investing opportunities. We aggregate hundreds of hours of financial research and provide tips on the best cannabis stocks for 2021.
Use Cannin as your resource for:
Market analysts expect the marijuana and hemp industry will have an annual value exceeding $75 Billion in the next decade. Is it too late to invest in marijuana stocks? No! This is the perfect time to invest.
Are you looking to buy stock in hemp companies or marijuana companies for 2021? Interested in new penny hemp stock companies? Looking for the best Canadian cannabis stocks to invest in? Looking to leverage the power of algorithmic stock trading to beat the cannabis market? We can help.
Are you interested in cannabis stocks like Curaleaf, Trulieve, Aurora Cannabis, Charlotte’s Web, Canopy Growth, or Hemp Inc.?
Predict price movements of cannabis stocks several hours in advance with our proprietary algorithmic stock trading software.
- +30% Gains in 2020
- +49.8% Gains in 2019
- Backtested since 2012
We’re so confident you’ll love our algotrading cannabis stock signals, we’re willing to give you a one-month risk-free trial to see it for yourself.
Profit from the best cannabis stocks – we’ll show you how at cannin.com.
