This article first appeared on GuruFocus .
Release Date: August 12, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Q2 2026 net revenue grew 7.9% sequentially to $126.1 million, significantly exceeding the 2-3% growth guidance.
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Adjusted EBITDA increased 10.6% sequentially to $29.1 million, with margin expanding to 23.1%.
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Retail revenue grew 11.5% sequentially, driven by new store openings and strong same-store transaction growth.
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Market share across the seven-state footprint grew nearly 5% sequentially, despite overall market contraction.
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New product launches accelerated to 199 in Q2, a 49.6% sequential increase, supporting brand strength.
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Retail footprint expanded to 56 stores, up 45% in under two years, with a target of 60+ by year-end.
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Cash position improved to $67 million, with strong operating cash flow of $22.5 million in the quarter.
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Regulatory tailwinds include DEA rescheduling progress and the upcoming federal hemp ban, expected to benefit licensed operators.
Negative Points
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Wholesale revenue declined 1% sequentially, impacted by New Jersey pricing/volume and the Illinois union strike.
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The Illinois union strike disrupted operations for about a month, with full financial impact still being evaluated.
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Pricing pressure and competitive intensity persist in several markets, though partially offset by Ohio outperformance.
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The Lansing, Michigan cultivation site remains closed for repairs, affecting production capacity.
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The company is pursuing a reverse stock split to meet exchange listing requirements, which may be viewed negatively by some investors.
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M&A opportunities are largely from distressed sellers, indicating market stress, though they offer high ROI potential.
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The company's Q3 guidance of 2-4% top-line growth is conservative, reflecting uncertainties from the strike and hemp ban timing.
Q & A Highlights
Q: Could you speak to the nature of your M&A discussionsare we talking single-store tuck-in acquisitions or potentially parcels of stores in select markets, and what is your appetite to execute on these ongoing discussions? A: Sam Brill, CEO: We are focused on high return on invested capital. We're seeing many cash-generating retail assets available on the market today because distressed sellers that were overleveraged are being forced to sell. We're targeting a minimum 35% return on invested capital, including synergies, with the opportunities we're seeing because of this unique time in the space.
Q: Could you speak to your own experience in the market regarding the hemp ban enforcement, and your thoughts around the potential hemp unlock and its impact on your growth algorithm exiting the year? A: Sam Brill, CEO: The evidence is really in states where enforcement has taken placecustomers move from the unregulated channel into the regulated channel with companies like Ascend. It's hard to quantify exactly because, for example, Ohio was seeing significant growth before serious enforcement. But there's definitely evidence that enforcement is part of that continued growth profile. If the federal ban happens, the total hemp market is somewhere in the $20-30 billion range, so if that TAM becomes available in the markets we operate in, we're certainly going to benefit from a strong tailwind.
Q: Your guidance would appear to read conservatively in terms of revenue and EBITDA margin profile given what you achieved in the quarter. Is it fair to say this is simply a case of a conservative guide given the unknowns? A: Sam Brill, CEO and Romana Nemchenko, CFO: The hemp ban is not scheduled to take place until late Q4, so we're not expecting a tailwind from that. We're reflecting strength from store additions, but the Illinois strike was disruptive for roughly a month and we're still evaluating the full fallout. We only had a partial benefit this quarter from acquisition and new store opening activities, so you will see a full quarter's worth of performance in Q3 with more openings in Q4. The guidance reflects those elements with some softness for the strike impact.
Q: Looking at Maryland at a state level, it seems to be holding up pretty well with a little bit of dilution from new stores opening. Could you provide some color on how you're doing within the market and if new store openings might be ramping in the future? A: Sam Brill, CEO: Maryland has a hard cap of four stores and there's a moratorium that has a couple years left on it, so adding stores is not currently an option in that state. We have not found ways to do partnerships that would work for regulators. Retail densification there is currently not an option until something changes. But that's been a very stable market for us and it's certainly one of the bright highlights of the quarter.
Q: The retail transaction growth and market share growth was definitely encouraging. Could you provide additional details on what's backing this, specifically regarding product presentations overhauls and if there's been outsized growth for these products? A: Sam Brill, CEO: On the CPG side, improvements with new product launches and packaging have definitely helped in terms of how we've gained share on that CPG portfolio across our full seven-market footprint. But for retail, the main driver of transactions is the additional retail stores we continue to add. On a same-store basis, we're seeing a slowing of new store openings, and I would say the loyalty strategy is working well in terms of being able to keep customers and keep that as flat to tough as possible.
Q: Could you provide an update on where things stand on federal reform and its impact on the capital markets level for Ascend? A: Sam Brill, CEO: The DEA administrative hearing process on rescheduling concluded on July 15th and the matter is now in briefing. We filed applications with the DEA to register certain state-level licensed medical cannabis operations, which requires a DEA response within six months. On the hemp side, federal action to close the unregulated, intoxicating hemp loophole is scheduled to take effect before the end of the year. We filed a definitive proxy putting a reverse stock split to a shareholder vote, required to meet the minimum share price for uplifting to a major U.S. exchange. We understand from major exchanges that upon broader rescheduling, uplifting is expected to become available for the industry.
Q: Could you provide more detail on the Q2 financial results and the outlook for the rest of the year? A: Romana Nemchenko, CFO: Q2 net revenue was $126.1 million, up 7.9% sequentially. Retail sales were $92.7 million, up 11.5% sequentially. Adjusted EBITDA was $29.1 million with a margin of 23.1%. We finished the quarter with $67 million of cash, up $6.1 million from Q1. CapEx for the full year is still expected to be about $20 million. Looking ahead to next quarter, we're expecting 2% to 4% top-line growth driven by the ramp-up of new store openings and our M&A pipeline, partially offset by the wholesale sales impact of the union strike in Illinois during the entire month of July.
Q: Could you elaborate on the retail expansion strategy and how new store openings are contributing to the business? A: Sam Brill, CEO: When I took over as CEO in late August of 2024, our retail footprint stood at 39 stores. Today, we stand at 56 stores, an increase of about 45% in just under two years. Every retail door has widened our consumer reach, reinforced our brand and market share positioning, and provided additional operating leverage through increased vertical sales. We continue to open stores in New Jersey with more planned in the back half of the year. Massachusetts raised the cap on retail licenses from three to six, providing real runway in a market where we have scaled production with plenty of capacity. We expect to meet or exceed our 60-store target by year-end.
Q: Could you provide more color on the brand performance and product innovation pipeline? A: Sam Brill, CEO: Our flagship Ozone brand held the number three overall brand house ranking across our seven markets by dollar share through Q2, and we were number one in units. New launches have gone from 95 to 106 to 133 to 199 over the last four quarters, a 49.6% sequential increase. Per BDSA, our share across our seven-state footprint grew nearly 5% sequentially, even as the overall market contracted
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
