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United States securities and exchange commission logo
March 17, 2021
Abner Kurtin
Chair of the Board and Chief Executive Officer
Ascend Wellness Holdings, LLC
1411 Broadway
16th Floor
New York, NY 10018
Re: Ascend Wellness
Holdings, LLC
Amendment No. 1 to
Draft Registration
Statement on Form S-1
Submitted February
26, 2021
CIK No. 0001756390
Dear Mr. Kurtin:
We have reviewed your amended draft registration statement and
have the following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Amendment No. 1 to Draft Registration Statement on Form S-1
Risk Factors
Our voting control will be concentrated, page 4
1. We note your response
to prior comment 4 and reissue. Please disclose the percentage of
outstanding shares that
Class B shareholders must maintain to continue to control the
outcome of matters
submitted to shareholders for approval.
Abner Kurtin
FirstName LastNameAbner
Ascend Wellness Holdings, Kurtin
LLC
Comapany
March NameAscend Wellness Holdings, LLC
17, 2021
March2 17, 2021 Page 2
Page
FirstName LastName
Our certificate of incorporation and bylaws will provide that the Court of
Chancery of the State
of Delaware, page 15
2. We note your response to prior comment 6 that your bylaws will include
a provision that
the federal district courts of the United States of America will be
the exclusive forum for
the resolution of any complaint asserting a cause of action arising
under the Securities Act
of 1933, as amended, or the Exchange Act of 1934, as amended. Please
reconcile this with
your disclosure on page 15 that states the exclusive forum provision
would not apply to
suits brought to enforce any liability or duty created by the
Securities Act or the Exchange
Act. Please also revise the Choice of Forum section on page 134 for
consistency. Finally,
please also revise to disclose the risks or other impacts of this
provision on investors,
including increased costs to bring a claim and that this provision can
discourage claims or
limit investors ability to bring a claim in a judicial forum that
they find favorable, and
whether there is any uncertainty about enforceability.
Security Risks, page 26
3. Please disclose whether you have been materially impacted by the risks
described herein.
Use of Proceeds, page 48
4. Please revise to provide more information regarding the proposed
capital expenditures.
Refer to Instruction 2 of Item 504 of Regulation S-K.
MD&A, page 56
5. Based on the data on page F-22, it appears that approximately 70% of
your 2020 net loss
is attributable to Ascend Michigan. Please expand your disclosures to
identify the specific
adverse factors that precipitated the Michigan losses and whether
similar operating losses
are expected in 2021. Quantify the carrying value of any intangible
assets that could be
impaired absent an improvement in operating results.
Income Tax Expense, page 59
6. The increase in tax expense is attributed to the increase in gross
profit. Please expand your
disclosure to identify the specific reasons why your income tax
expense as a percentage of
gross profit increased from 20% in 2019 to 30% in 2020.
Interest Expense, page 59
7. Please expand your disclosure to quantify the average amounts borrowed
and the
weighted average interest rates on debt each period so readers can
understand the impact
of both borrowing activity and interest rate changes on your interest
expense variance.
Abner Kurtin
FirstName LastNameAbner
Ascend Wellness Holdings, Kurtin
LLC
Comapany
March NameAscend Wellness Holdings, LLC
17, 2021
March3 17, 2021 Page 3
Page
FirstName LastName
Non-GAAP Financial Measures, page 60
8. For each period presented, please quantify the components of the
"Start-up costs" and
"Other one-time charges" adjustments so that readers can assess
whether these costs are
useful in evaluating your operating performance. In addition, please
revise the "one-time"
characterization for expense items that you reasonably expect to be
recurring.
Liquidity, page 61
9. Please disclose whether a material amount of your cash balance is not
on deposit with
banks and credit unions. In this regard, it is not clear the extent to
which the risks
described on pages 21-22 have had a material impact. In addition,
please disclose whether
a material portion of your cash balance is restricted for use by the
VIE's referenced on
page F-22.
10. Please disclose the amount of your estimated capital expenditures in
2021. Describe also
the material projects that comprise the construction-in-progres
balance disclosed on page
F-22. See Item 303(b)(1)(ii) of Regulation S-K.
Other Matters, page 63
11. Please disclose a reasonable estimate of the beneficial conversion
feature charge in a pre-
effective amendment. If material, the disclosure should also be
provided in the operating
performance risk factor on page 35 as well as in footnotes to the
summarized and selected
financial data on pages 10, and 55.
Subsequent Transactions, page 64
12. Please provide a cross-reference to the MedMen financial statements,
the pro forma
financial statements, and the MD&A disclosures located in Exhibit 99.
Subsequent Transactions
Investments, page 64
13. We note your disclosure that you entered into an investment agreement
with MedMen
Enterprises Inc. Please file this agreement as an exhibit or, in the
alternative, please tell us
why you believe that you are not required to file the agreement. Refer
to Item 601(b)(10)
of Regulation S-K.
Established Ascend Brand with Focus on Flagship Retail, page 74
14. We note your response to prior comment 10. It appears that you are
comparing fiscal year
2019 sales per gross square foot across all company-operated stores of
certain luxury
retailers to fourth quarter 2020 sales per square foot for your 8
retail stores in Illinois.
Given the differences between your business and that of retailers to
which you compare
your Illinois stores, such as Tiffany and Lululemon, as well as
differences in the
geographic scope of the stores you compare and the nature of the
products sold, it does not
Abner Kurtin
Ascend Wellness Holdings, LLC
March 17, 2021
Page 4
appear this is an appropriate comparison. Please remove these
statements.
Index, page F-1
15. Please include a cross-reference to the audited and pro forma financial
statements
located in Exhibit 99.
Exhibit 99.7, page II-6
16. Please provide pro forma EPS data and separately present the impairment
expense line
item on the pro forma Statement of Operations pursuant to Article 11-02
of Regulation S-
X.
You may contact David Burton at 202-551-3626 or Al Pavot at 202-551-3738
if you have
questions regarding comments on the financial statements and related matters.
Please contact
Ada D. Sarmento at 202-551-3798 or Mary Beth Breslin at 202-551-3625 with any
other
questions.
Sincerely,
FirstName LastNameAbner Kurtin
Division of
Corporation Finance
Comapany NameAscend Wellness Holdings, LLC
Office of Life
Sciences
March 17, 2021 Page 4
cc: James B. Guttman, Esq.
FirstName LastName