$1.7 Billion Cannabis Stock IPO: Buy or Pass?

Cannabis With Money

Cannabis investors looking to buy low need to check out the biggest cannabis stock IPO of 2021.

An early industry leader valued at $1.7 billion just began trading on the Canadian Stock Exchange. And while this company is delivering crazy sales growth, shares have hardly moved since going public, making this a bargain opportunity in the cannabis sector.

Ascend Wellness (CSE: AAWH, OTC: AWWH) is a $1.7 billion cannabis industry leader that just began trading on the Canadian Stock Exchange.

Founded in 2018 and headquartered in New York, New York, Ascend is one of the largest cannabis companies in the U.S. Ascend owns an impressive portfolio of cannabis cultivation facilities and dispensaries.

That includes:

  • 17 dispensaries in five U.S. states, including Illinois, Massachusetts, New Jersey, Ohio, and Michigan.
  • 74,000 square feet of cultivation space producing medical and recreational cannabis.

With these assets in place, Ascend is cashing in on the high-growth U.S. cannabis industry. The company’s recent first-quarter results included some impressive sales growth that is virtually unmatched by any other industry.

First-Quarter Sales Jumped 193% from Last Year

  • Total revenue of $66.1 million increased 21.8% sequentially and 192.7% year-over-year.
  • As of March 31, 2021, cash and cash equivalents were $62.6 million.
  • During the first quarter of 2021, AWH opened two new dispensaries, in Fairview Heights, Illinois, and Grand Rapids, Michigan, which brought the company’s total to 14 open and operating dispensaries as of March 31, 2021.

Ascend is Investing Millions into More Growth

Looking forward, Ascend’s pace of revenue growth should continue to accelerate. Ascend continues to invest millions into acquiring permits, expanding cultivation capacity, and opening new dispensaries.

For example, since the end of the first quarter Ascend has opened three more dispensaries. That includes a flagship location in downtown Boston that is 16,000 square feet and the first recreational dispensary in downtown Boston.

Ascend also opened its second location in northern New Jersey and a location in Chicago in a heavy traffic area near Midway Airport.

Opening these new locations in high-growth markets in Massachusetts, New Jersey, and Illinois should help drive more revenue growth for the next few years.

Ascend Just Executed an $80 Million Stock IPO

Ascend is well funded for more growth.

The company just landed $80 million in fresh capital after executing an IPO in early May.

In addition to the $80 million from the IPO, Ascend already had $62 million in cash on the balance sheet at the end of the first quarter. This gives Ascend a substantial pool of capital to drive more sales growth.

Ascend Shares are Mostly Even Since Going Public

Ascend shares began trading on the Canadian Stock Exchange on May 4 under the symbol AAWH.U. Shares are also trading in the U.S. in OTC markets under the ticker symbol AWWH.

Shares have been mostly range-bound since going public, trading between $8.50 and $9.50. Take a look at the chart below.

*Chart from tradingview.com

Trading volume on the Canadian and U.S. shares have been low so far. This creates more price risk when entering or exiting shares.

The Big Picture on the Ascend Wellness IPO

Ascend is an early cannabis industry leader with a market value of $1.7 billion. The company is cashing in on the high-growth U.S. cannabis industry with impressive sales growth.

Now, investors can own a piece of Ascend – the company just went public in early May and shares are still trading mostly range-bound.

About the Author

Michael Vodicka is an equity analyst with more than 20 years of experience trading and investing. His research has been featured in some of the industry’s most respected publications. He has been investing and leading investors in the cannabis sector since 2013.