Ascend Wellness Holdings, Inc.

Good morning and thank you for standing by. Welcome to AWH's second quarter 2024 earnings call. I'd now like to hand the conference over to your first speaker today, Rebecca Kaur, Executive Vice President of Investor Relations and Strategy. Please go ahead.

Good morning and welcome to AWH's earnings call for the second quarter of 2024. The presentation that accompanies this call can be found on the Investor Relations section of our website. Before we proceed, I would like to remind you that the following discussion and presentation contains various forward-looking statements or information. These forward-looking statements or information are subject to risks and uncertainties that may cause actual results to differ from historical or anticipated results. For more information on these risks and uncertainties, please refer to slide two of this presentation, today's earnings release, and our SEC and CR filings, including our most recent report on Form 10-K. We encourage you to review these materials carefully. During today's call, we will be referring to non-GAAP financial measures, such as adjusted EBITDA. Reconciliations to the most directly comparable GAAP measures are in the appendix to the presentation and in our earnings release. On today's call, you will hear from John Hartman, Chief Executive Officer, and Mark Kassebaum, Chief Financial Officer. With that, I'll turn the call over to John, starting on slide four.

Thanks, Rebecca. Good morning, everyone. And thank you for joining our second quarter earnings call. As I reflect on the quarter, I would like to thank each of our stakeholders, including our valued patients and customers, whose trust and loyalty drive our mission. Our dedicated employees, whose hard work and passion are the foundation of our success. And our supportive lenders and investors, whose confidence in our vision enables us to grow and succeed. On this call, I'll start by providing an update with highlights in the quarter, followed by insights into the performance of our retail and wholesale segments. After that, I will hand the call over to our CFO, Mark Casabon, who will provide more detail on the financials and an update on our outlook for the rest of 2024. In Q2, we produced solid financial results. Our revenue net of intercompany sales reached $141.5 million, and adjusted EBITDA totaled $28.3 million. These figures reflect a notable 15% increase in revenue, a 33% rise in adjusted EBITDA, and a 269 basis point improvement in margin compared to the same quarter last year. Despite these impressive year-over-year gains, they fell short of our expectations primarily due to declines in our wholesale profitability in the Massachusetts market. Consequently, we are actively managing costs and optimizing various business functions to address this gap. Furthermore, our focus remains on market execution, driving operational efficiencies, enhancing customer experience, and strategically investing in growth opportunities to ensure we continue to build on our momentum. We are committed to delivering value for all our stakeholders and are confident in our ability to navigate the choppy waters of an emerging market. While some of our metrics fell short, we are pleased to report positive cash flow from operations for the sixth consecutive quarter. In Q2, we generated $14 million in cash from operations, excluding amendments that we filed earlier this year. For the first half of the year, our total cash flow from operations excluding these refunds was nearly $18 million, solidifying our position in the cash generative phase of our growth journey. Further demonstrating this, we produced $9 million in positive free cash flow in the quarter, excluding the benefit of tax returns. Outside of the Q2 results, we achieved several notable milestones for which I'm proud of the team for executing. As previously committed, we successfully refinanced our term loan over a year before it would mature in August of 2025. The team secured the largest debt deal for all U.S. multi-state cannabis operators in the last year and a half and the fifth largest original issuance of all time amongst the same group. This refinancing significantly enhances our flexibility and provides us the runway to continue executing our strategy and growth objectives.