Ascend Wellness Holdings, Inc.

Good morning, and thank you for standing by. Welcome to AWH's third quarter 2023 earnings call. I'd now like to hand the conference over to your first speaker today, Rebecca Corr, Executive Vice President of Investor Relations and Strategy. Please go ahead.

Good morning, and welcome to AWH's earnings call for the third quarter 2023. The presentation that accompanies this call can be found on our website, awholdings.com slash investors. Before we proceed, I would like to remind you that there are several risk factors and other cautionary statements contained in our SEC and CDAR filings, including our annual report on Form 10-K for the year ending December 31, 2022. We will not review those risk factors and other cautionary statements on this call. However, we encourage you to read them carefully. Various remarks on the call concerning expectations, predictions, plans, and prospects constitute forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ from historical or anticipated results. Any forward-looking statements or information reflect management's current view only, and we undertake no obligation to revise or update such statements or make additional forward-looking statements in the future, except as required by applicable laws. References may be made during this call to future-oriented financial information all of which are subject to the same assumptions, risk factors, limitations, and qualifications as forward-looking statements or information. When we believe that such estimates have been prepared on a reasonable basis, reflecting best estimates and judgment, the actual financial results of the company may vary from the amounts discussed herein, and such variation may be material. During today's call, we will be referring to non-GAAP measures, such as adjusted gross profit, adjusted gross profit margin, adjusted EBITDA, and adjusted EBITDA margin. as defined and reconciled in our earnings materials in the appendix of the presentation. These non-GAAP measures, as defined by ASCEND, may not be comparable to measures with similar titles used by other companies. Certain information that may be mentioned during this call, including industry information and estimates, is obtained from third-party sources, including public sources, and there can be no assurance as to the accuracy or completeness of such information. Although believed to be reliable, management has not independently verified any of the data from third-party sources. On today's call, we have Abner Curtin, Executive Chairman, John Hartman, Chief Executive Officer, and Dan Neville, Chief Financial Officer. With that, I'll turn the call over to Abner, starting on slide four.

Thanks, Rebecca. Good morning, everyone, and thank you for joining our third quarter 2023 earnings call. Before we begin, I would like to thank our customers, partners, investors, lenders, and the Ascend team for helping us deliver these strong results this quarter. In Q3, we exceeded expectations in several key financial areas. The quarter marked our sixth consecutive quarter of record revenue growth, where we saw a noteworthy 15% increase sequentially and a 27% increase compared to the third quarter of last year. The success is attributed to improvements in both our retail and wholesale segments. We've also made significant progress in enhancing our gross profit and adjusted EBITDA, showing meaningful sequential improvements. Our adjusted EBITDA surged 39% sequentially, with a corresponding increase in adjusted EBITDA margin of over 350 basis points. This success was driven by the initiation of adult use sales in Maryland, and margin enhancements in our cultivation operations in New Jersey, Illinois, and Massachusetts. I'm pleased to report that this marks the third consecutive quarter of positive cash flow from operations with a substantial $24 million generated. Notably, we achieved our first quarter of positive free cash flow, generating $13 million. This reflects our commitment to fiscal responsibility and continued growth and sustainability of our business. This quarter, we saw continued progress made in the federal regulatory environment. We continue to believe the process of legalization of some sort is a matter of when, not it, but we are not making any predictions on the timing of an uncertain legislative process. At the end of the summer, we saw momentous recommendation from the Department of Health and Human Services to the Drug Enforcement Agency, suggesting they reschedule cannabis from Schedule 1 on the Controlled Substance Act list where it currently sits alongside heroin and fentanyl to Schedule III. This move marks a significant step towards more rational cannabis regulation. However, Ascend remains forcerously optimistic, recognizing that the final decision rests with the DEA and ultimately the Attorney General. This would be a significant catalyst for the industry, as rescheduling cannabis as Schedule III could unlock opportunities for improved tax structures, upgraded patient and customer access, enhanced regulatory consistently, and potentially enhanced investor access. We saw modest progress made on the legislative front. Just over a month ago, the Secure and Fair Enforcement Regulation Banking Act progressed through the Senate Banking Committee, a historic milestone, though we recognize that there is no timetable for passage by the full Senate or the House. In parallel to the aforementioned developments in the legislative and executive branch, we continue to participate with an industry group to pursue a lawsuit that challenges the constitutionality of the enforcement of the Controlled Substance Act against state-regulated cannabis businesses. Two weeks ago, we were pleased to officially get this off the ground with the filing of a suit against the United States in the U.S. District Court in Massachusetts. Ascend is proud to be a foundational supporter of this act that We expect this will be a long but worthwhile process, and we will provide any material updates as they are available. We continue to see positive developments at the state level, including the Ohio ballot taking place today, as well as legislative developments in Pennsylvania, which we expect is also on a path to legalizing adult use. We note that Ascend has significant presence in two of the most important markets expected to convert to adult use in the near future. At this juncture, a significant majority of Americans have access to legal cannabis, with 38 states operating medical programs and over 20 states operating adult use programs. While we are pleased with the federal progress made, we remain focused on executing our strategy to become a scale provider in each of our select adult use or near adult use markets. We are currently vertical in six of our seven markets and now sell adult use in five of our seven markets. We are anticipating citizens in Ohio will vote in favor of adult use during the ballot initiative today, with recent polls showing over 55% support versus the 50% threshold required, which would make it our sixth adult use state. Ohio is also a key market for us, as we currently have two open dispensaries and three additional dispensaries opening by year end and are vertically integrated in the state. As a result of our acute focus and disciplined approach, we remain in position to pursue accretive acquisitions. There are many distressed assets in the market, and we continue to evaluate several opportunities to support growth of our asset portfolio via strategic acquisitions. Our portfolio stands out as one of the most robust and strategically concentrated, driving our revenue and cash flow expansion in the forthcoming four years. With that, I will turn it over to John Hartman, our chief executive officer, to discuss the business beginning on slide five.