Acreage Reports Second Quarter 2023 Financial Results

Records Tenth Consecutive Quarter of Positive Adjusted EBITDA

Achieved Record Revenue Growth in New Jersey and Connecticut

Streamlining Initiatives Underway in Preparation for Completion of Canopy USA Transaction

NEW YORK, Aug. 09, 2023 (GLOBE NEWSWIRE) -- Acreage Holdings, Inc. (“Acreage” or the “Company”) (CSE: ACRG.A.U, ACRG.B.U) (OTCQX: ACRHF, ACRDF), a vertically integrated, multi-state operator of cannabis cultivation and retailing facilities in the U.S., today reported its financial results for the second quarter ended June 30, 2023 (“Q2 2023”).

Second Quarter 2023 Financial Highlights

  • Consolidated revenue of $58.1 million, an increase of 3.8% compared to quarter ended March 31, 2023 (“Q1 2023”).
  • Gross margin was 36%. Excluding the impact of non-cash inventory adjustments, gross margin for Q2 2023 was 44%.
  • Adjusted EBITDA* was $6.8 million and Adjusted EBITDA* as a percentage of consolidated revenue was 12%.

Second Quarter and Recent Operational Highlights

  • Expanded the Company’s leadership team to include deep cannabis operational expertise, and appointed Dennis Curran to Chief Executive Officer and Carl Nesbitt to Chief Financial Officer.
  • Streamlined governance structure and rightsized the Board of Directors in preparation for the completion of the Company’s previously announced strategic arrangement (the “Floating Share Arrangement”) with Canopy Growth Corporation and Canopy USA, LLC.
  • Achieved record revenue in New Jersey and Connecticut with year-over-year increases of 35% and 31%, respectively, compared to the quarter ended June 30, 2022 (“Q2 2022”).  
  • Launched adult-use retail operations in Connecticut at The Botanist locations in Montville and Danbury, with both locations achieving strong initial performance.
  • Progressed ongoing infrastructure project at the Company’s Egg Harbor facility to support demand in New Jersey and to unlock premium biomass production for further expansion of Acreage’s in-market product suite.
  • Entered partnership with the Last Prisoner Project to participate in the Roll It Up for Justice Program and inmate letter-writing initiative to further advance criminal justice reform and support those being impacted by the failed War on Drugs.
  • Helped pass 280E reform in Ohio, Connecticut, and Maine to allow for state-level deductions of usual and necessary business expenses for cannabis operators.

Product Innovation and Recent Launches

  • Debuted several new and innovative products across the Company’s house of brands to drive market share growth and increase customer loyalty.
    • Launched Journeyman THC Lemonades in Illinois, in partnership with Botanica. The clean, vegan, and gluten-free THC beverages are available in three refreshing flavors, Tropical Lemonade, Berry Lemonade, and Tart Lemonade.
    • Introduced the first-ever Superflux flower in the New England, Massachusetts region in June, followed by a broader retail launch in July, and launched Stem 1g Live Resin Disposable Vapes in Massachusetts, Illinois, and Ohio.
    • Launched the first ever The Botanist Flower in Maine with four strains, and The Botanist Cherry Punch Extra High Potency Fruit Chew in Ohio and Illinois.
    • Introduced seasonal and limited-time The Botanist edibles, including the Mango Iced Tea Gummy and Botanist Pride Medley Gummy, in Illinois, Maine, Massachusetts, and Ohio.

Management Commentary

“I am pleased with the progress we made in the second quarter on our continued efforts to drive meaningful revenue growth and achieve operational savings to deliver cash flow improvements for the business,” said Dennis Curran, Chief Executive Officer of Acreage. “Our commitment to introducing differentiated products and delivering exceptional customer experiences has had a profound impact in several of our core markets, including the nascent New Jersey and Connecticut adult-use markets. The robust revenue growth in New Jersey is incredibly encouraging as we deepen our operations and build a leadership position in the state, and our recent launch of adult-use sales in Connecticut has already garnered positive consumer feedback with demand ahead of our expectations.”

Mr. Curran concluded, “Across our footprint, we have continued to implement optimization initiatives to further drive operational excellence and strongly position each market to achieve sustained growth. This includes strengthening our inventory management, cost analysis, and production planning, which we believe will enable us to unlock higher margins and continue to deliver positive Adjusted EBITDA as we move into the second half of the year.”

Q2 2023 Financial Summary
(in thousands)

 Three Months Ended June 30, YoY%

 Three Months
Ended March
31, 2023

  2023   2022    
Consolidated Revenue $58,115   $61,351  (5.3)%  $55,963  3.8%
Gross Profit 21,122   30,614  (31.0)%  26,585  (20.5)%
% of revenue 36%   50%     48%   
Total operating expenses 26,177   27,304  4.1%  25,440  (2.9)%
Net loss (18,240)  (10,603)    (16,157)  
Net loss attributable to Acreage (16,156)  (9,929)    (14,590)  
Adjusted EBITDA* 6,836   10,385  (34.2)%  10,593  (35.5)%

Total revenue for Q2 2023 was $58.1 million compared to $61.4 million in Q2 2022 and $56.0 million in Q1 2023. The year-over-year decrease was primarily due to the divestiture of the Company’s operations in Oregon and market price compression across various markets. The year-over-year decrease was somewhat offset by revenue growth in both New Jersey and Connecticut following the commencement of adult-use sales.

Total gross profit for Q2 2023 was $21.1 million compared to $30.6 million in Q2 2022. Total gross margin was 36% in Q2 2023 compared to 50% in Q2 2022. Margin was impacted by cost increases due to inflation, as well as price compression across various markets during the quarter. Additionally, wholesale cost of goods sold for Q2 2023 included $4.5 million of non-cash inventory adjustments due to excess inventory in select markets and carrying values of inventory exceeding net realizable value. Excluding these non-cash inventory adjustments, gross margin for Q2 2023 was 44%.

Total operating expenses for Q2 2023 were $26.2 million compared to $27.3 million in Q2 2022. The reduction in operating expenses can be attributed to a decrease in general and administrative expenses related to lower professional fees and office expenses achieved by continued cost controls. This also included reductions in equity-based compensation expenses and depreciation and amortization expenses when compared to Q2 2022.

Adjusted EBITDA* for Q2 2023 was $6.8 million compared to Adjusted EBITDA* of $10.4 million in Q2 2022 and Adjusted EBITDA* of $10.6 million in Q1 2023.

Net loss attributable to Acreage for Q2 2023 was $(16.2) million, compared to $(9.9) million in Q2 2022.

Amendment to Credit Facility

On April 28, 2023, Acreage further amended its existing credit facility (the “Credit Facility”) such that $15.0 million was available for immediate draw, but such funds would be maintained in a segregated account until dispersed and be restricted for use to only eligible capital expenditures. Additionally, the Company has agreed to limit the total amounts outstanding under the Credit Facility to $140.0 million and to, at all times subsequent to April 28, 2023, maintain collateral (as defined in the Credit Facility) equal to or greater than the outstanding amount under the Credit Facility.

Balance Sheet and Liquidity

Acreage ended Q2 2023 with $16.4 million in cash and cash equivalents and $13.6 million of restricted cash, with such funds restricted for use to only eligible capital expenditures.

About Acreage Holdings, Inc.

Acreage is a multi-state operator of cannabis ‎cultivation and retailing facilities in the U.S., including the Company’s national retail store ‎brand, The Botanist. With its principal address in New York City, Acreage’s wide range of national and regionally available cannabis products include the award-winning brands The Botanist and Superflux, the Prime medical brand in Pennsylvania, and others. Since its founding in 2011, Acreage has focused on building and scaling operations to create a seamless, consumer-focused, branded experience. Learn more at and follow us on Twitter, LinkedIn, Instagram, and Facebook.

Forward Looking Statements

This news release and each of the documents referred to herein contains “forward-looking information” and ‎‎“forward-looking statements” within the meaning of applicable Canadian and United States securities legislation, ‎respectively. All statements, other than statements of historical fact, included herein are forward-looking ‎information. ‎Often, but not always, forward-looking statements and information can be identified by the use of words such as ‎‎“plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, ‎or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, ‎‎‎“would”, “might” or “will” be taken, occur or be achieved. ‎

Forward-looking statements or information involve known and unknown risks, uncertainties, and other ‎factors which may cause the actual results, performance or achievements of Acreage or its ‎subsidiaries to be materially different from any future results, performance or achievements expressed or ‎implied by the forward-looking statements or information contained in this news release.

Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information, including, but not limited to: the occurrence of changes in U.S. federal Laws regarding the cultivation, distribution or possession of marijuana; ‎the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, court ‎and Floating Shareholder approvals; the ability of the parties to satisfy, in a timely manner, the other conditions to the completion of the Floating Share ‎Arrangement Agreement; the ability of Canopy Growth Corporation (“Canopy”), Canopy USA, LLC (“Canopy USA”) and Acreage to satisfy, in a timely manner, the closing conditions to the floating share arrangement among Canopy, Canopy USA and Acreage (the “Floating Share Arrangement”); risks relating to the value and liquidity of the Floating Shares and the common shares of Canopy; Canopy maintaining compliance with the Nasdaq Global Stock Market (the “Nasdaq”) and Toronto Stock Exchange listing requirements; the rights of the Floating ‎Shareholders may differ materially from those of shareholders in Canopy; expectations regarding future investment, growth and ‎expansion of Acreage’s operations; the possibility of adverse U.S. or Canadian tax consequences upon completion of the Floating Share Arrangement; if Canopy USA acquires the Fixed Shares pursuant to the Existing Arrangement Agreement without structural amendments to Canopy’s interest in Canopy ‎USA, the listing of the Canopy Shares on the Nasdaq may be jeopardized; the risk of a change of ‎control of   either Canopy or Canopy USA; restrictions on Acreage’s ability to pursue certain business ‎opportunities and other restrictions on Acreage’s business; the impact of material non-recurring expenses in ‎connection with the Floating Share Arrangement on Acreage’s future results of operations, cash flows and ‎financial condition; the possibility of securities class action or derivatives lawsuits; in the event that the Floating ‎Share Arrangement is not completed, but the acquisition by Canopy of the Fixed Shares (the “Acquisition”) is completed pursuant to Existing Arrangement Agreement and Canopy becomes the majority ‎shareholder in Acreage, the likelihood that the Floating Shareholders will have little or no influence on the conduct ‎of Acreage’s business and affairs; risk of situations in which the interests of Canopy USA and the interests of ‎Acreage or shareholders of Canopy may differ;‎ Acreage’s compliance with Acreage’s business plan for the fiscal years ending December 31, 2020 through December 31, 2029 pursuant to the Existing Arrangement Agreement; in the event that the Floating Share Arrangement is ‎completed, the likelihood of Canopy completing the Acquisition in accordance with the Existing Arrangement Agreement; ‎risks relating to certain directors and executive officers of Acreage having interests in the transactions ‎contemplated by the Floating Share Arrangement Agreement and the connected transactions that are different ‎from those of the Floating Shareholders; risks relating to the possibility that holders of more than 5% of the ‎Floating Shares may exercise dissent rights; other expectations and assumptions concerning the transactions ‎contemplated between Canopy, Canopy USA and Acreage; the available funds of Acreage and the anticipated ‎use of such funds; the availability of financing opportunities for Acreage and Canopy USA and the risks ‎associated with the completion thereof; regulatory and licensing risks; the ability of Canopy, Canopy USA and ‎Acreage to leverage each other’s respective capabilities and resources; changes in general economic, business ‎and political conditions, including changes in the financial and stock markets; risks relating to infectious diseases, ‎including the impacts of the COVID-19; legal and regulatory risks inherent in the cannabis industry, including the ‎global regulatory landscape and enforcement related to cannabis, political risks and risks relating to regulatory ‎change; risks relating to anti-money laundering laws; compliance with extensive government regulation and the ‎interpretation of various laws regulations and policies; public opinion and perception of the cannabis industry‎; and such other risks disclosed in the Circular, the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, dated May 1, 2023 and the Company’s other public filings, in each case filed with the SEC on the EDGAR website at and with Canadian securities regulators and available under Acreage’s profile on SEDAR at Although Acreage has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended.

Although Acreage believes that the assumptions and factors used in preparing the forward-looking information or forward-looking statements in this news release are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed time frames or at all. The forward-looking information and forward-looking statements included in this news release are made as of the date of this news release and Acreage does not undertake any obligation to publicly update such forward-looking information or forward-looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities laws.

Neither the Canadian Securities Exchange nor its Regulation Service Provider, nor any securities regulatory authority in Canada, the United States or any other jurisdiction, has reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release.‎

For more information, contact:

Carl Nesbitt
Chief Financial Officer
646 600 9181

Courtney Van Alstyne
MATTIO Communications


US GAAP Statements of Financial Position
US$ (thousands)June 30, 2023 December 31, 2022
 (unaudited) (audited)
Cash and cash equivalents$16,401  $24,067 
Restricted cash 13,628    
Accounts receivable, net 8,953   10,512 
Inventory 47,938   49,446 
Notes receivable, net    29,191 
Assets held-for-sale 1,788    
Other current assets 5,418   4,977 
Total current assets 94,126   118,193 
Long-term investments 33,287   34,046 
Capital assets, net 136,085   133,405 
Operating lease right-of-use assets 19,067   22,443 
Intangible assets, net 35,124   35,124 
Goodwill 38,694   13,761 
Other non-current assets 3,531   3,601 
Total non-current assets 265,788   242,380 
TOTAL ASSETS$359,914  $360,573 
Accounts payable and accrued liabilities$31,078  $29,566 
Taxes payable 33,959   24,226 
Interest payable 2,824   2,575 
Operating lease liability, current 2,268   2,443 
Debt, current 13,805   1,584 
Liabilities related to assets held for sale 1,288    
Other current liabilities 9,071   11,939 
Total current liabilities 94,293   72,333 
Debt, non-current 230,163   213,496 
Operating lease liability, non-current 18,839   21,692 
Deferred tax liability 10,620   9,623 
Other liabilities 3,004   3,250 
Total non-current liabilities 262,626   248,061 
TOTAL LIABILITIES 356,919   320,394 
Members' equity 28,444   61,384 
Non-controlling interests (25,449)  (21,205)
TOTAL MEMBERS’ EQUITY 2,995   40,179 


US GAAP Statements of Operations
US$ (thousands)Q2'23 Q2'22 YTD'23 YTD'22
Retail revenue, net$44,913  $46,685  $86,794  $88,112 
Wholesale revenue, net 13,202   14,360   27,200   29,532 
Other revenue, net    306   84   586 
Total revenues, net 58,115   61,351   114,078   118,230 
Cost of goods sold, retail (23,484)  (23,466)  (43,898)  (44,234)
Cost of goods sold, wholesale (13,509)  (7,271)  (22,473)  (13,872)
Total cost of goods sold (36,993)  (30,737)  (66,371)  (58,106)
Gross profit 21,122   30,614   47,707   60,124 
General and administrative 7,073   8,922   17,585   17,309 
Compensation expense 13,203   12,579   25,406   26,774 
Equity-based compensation expense 694   1,655   1,678   5,814 
Marketing 656   964   1,400   1,661 
Impairments, net    329      2,467 
Write down (recovery) of assets held-for-sale 3,557      3,557   874 
Legal settlements (recoveries)    (310)     (335)
Depreciation and amortization 994   3,165   1,991   4,972 
Total operating expenses 26,177   27,304   51,617   59,536 
Net operating loss (5,055)  3,310   (3,910)  588 
Income (loss) from investments, net 322   (996)  (20)  137 
Interest income from loans receivable (6)  365   10   782 
Interest expense (8,862)  (5,520)  (16,936)  (10,301)
Other income, net 1,355   286   (198)  276 
Total other loss (7,191)  (5,865)  (17,144)  (9,106)
Loss before income taxes (12,246)  (2,555)  (21,054)  (8,518)
Income tax expense (5,994)  (8,048)  (13,343)  (15,996)
Net loss (18,240)  (10,603)  (34,397)  (24,514)
Less: net loss attributable to non-controlling interests (2,084)  (674)  (3,651)  (1,891)
Net loss attributable to Acreage Holdings, Inc.$(16,156) $(9,929) $(30,746) $(22,623)
Net loss per share attributable to Acreage Holdings, Inc. - basic and diluted:$(0.14) $(0.09) $(0.27) $(0.21)
Weighted average shares outstanding - basic and diluted 112,810   108,230   112,679   107,569 


This release includes Adjusted EBITDA, which is a non-GAAP performance measure that we use to supplement our results presented in accordance with U.S. GAAP. The Company uses Adjusted EBITDA to evaluate its actual operating performance and for planning and forecasting future periods. The Company believes that the adjusted results presented provide relevant and useful information for investors because they clarify the Company’s actual operating performance, make it easier to compare our results with those of other companies and allow investors to review performance in the same way as our management. Since these measures are not calculated in accordance with U.S. GAAP, they should not be considered in isolation of, or as a substitute for, net loss or our other reported results of operations as reported under U.S. GAAP as indicators of our performance, and they may not be comparable to similarly named measures from other companies.

The Company defines Adjusted EBITDA as net income before interest, income taxes and, depreciation and amortization and excluding the following: (i) income from investments, net (the majority of the Company's investment income relates to remeasurement to net asset value of previously-held interests in connection with our roll-up of affiliates, and the Company expects income from investments to be a non-recurring item as its legacy investment holdings diminish), (ii) equity-based compensation expense, (iii) non-cash impairment losses, (iv) transaction costs, (v) non-cash inventory adjustments and (vi) other non-recurring expenses (other expenses and income not expected to recur).

Reconciliation of GAAP to Non-GAAP Measures
US$ (thousands, except per share amounts)Q2'23 Q2'22 YTD'23 YTD'22
Net loss (GAAP)$(18,240) $(10,603) $(34,397) $(24,514)
Income tax expense 5,994   8,048   13,343   15,996 
Interest expense (income), net 8,868   5,155   16,926   9,519 
Depreciation and amortization 3,511   4,456   6,549   7,347 
EBITDA (non-GAAP)*$133  $7,056  $2,421  $8,348 
Adjusting items:       
Loss (income) from investments, net (322)  996   20   (137)
Impairments, net    134      2,090 
Non-cash inventory adjustments 4,484      6,721    
Loss on extraordinary events 200   194   1,692   376 
Write down (recovery) of assets held-for-sale 3,557      3,557   874 
Equity-based compensation expense 694   1,655   1,678   5,814 
Legal settlements, net    (310)     (335)
Gain on business divestiture    (292)     (296)
Other non-recurring expenses (1,910)  952   1,339   2,278 
Adjusted EBITDA (non-GAAP)*$6,836  $10,385  $17,428  $19,012