The pullback continues in shares of Acreage Holdings Inc (OTCMKTS:ACRGF). The stock is still well above its December pivot lows in the $12.50 area, but has pulled back as much as 40% since spiking up near the $30/share level in early January. Investors are looking for signs of aggressive expansion given the towering ROI on new capital in the cannabis space right now. In answer to that, the company just announced that it has entered into an agreement to acquire 100% of California-based Kanna, Inc., which holds a license to operate a cannabis dispensary in Oakland, CA.
According to the release, “this marks the first dispensary operating license for Acreage in California. Located at 2019 MacArthur Blvd., in Oakland, the dispensary is scheduled to open in the second quarter of 2019, under Acreage’s dispensary brand The Botanist. Oakland is a limited competition market allowing just 16 adult use dispensaries to serve a population of more than 400,000.”
Acreage Holdings Inc (OTCMKTS:ACRGF) bills itself as Acreage Holdings, formerly High Street Capital Partners, is a principal investment firm specializing in cannabis industry. Acreage Holdings was founded in 2014 and is based in New York, New York.
This is a vertically integrated, multi-state owner of cannabis licenses and assets in U.S. states where either medical and/or adult use of cannabis is legal. With one of the largest geographic footprints of any cannabis companies, it currently owns and/or operates cultivation, processing and dispensary operations. The Company is dedicated to building and scaling operations to create a seamless, consumer-focused branded cannabis experience.
According to public filings, Acreage is the largest multi-state cannabis operator in the United States in terms of number of states with operating licenses, largest total addressable market, and largest serviceable population. More recently, Acreage announced a transformative acquisition of Form Factory, which will provide the company with the capabilities to become the cannabis industry’s first and only Consumer Packaged Goods company with a national footprint.
Headquartered in New York City, Acreage Holdings is the largest vertically integrated, multi-state owner of cannabis licenses and assets in U.S. states with respect to number of states with operating licenses, according to public filings.
With operating licenses in 19 states, serving a population of more than 172 million Americans, and an estimated 2022 total addressable market of approximately $14 billion in legal cannabis sales according to Arcview Market Research. Acreage is dedicated to building and scaling operations to create a seamless, consumer-focused branded cannabis experience.
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As noted above, ACRGF just announced that it has entered into an agreement to acquire 100% of California-based Kanna, Inc., which holds a license to operate a cannabis dispensary in Oakland, CA.
That comes in a context of recent action that hasn’t been particularly fun for ACRGF shareholders. Over the past five days of action, shares of the stock have suffered from clear selling pressure, dropping by roughly -8%. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -17%. In addition, the name has seen interest climb, with an increase in recent trading volume of 66% beyond its prior sustained average level. This should not be overlooked with the stock trading on a float that is relatively small at just 22.5M shares.
“I could not be more excited about our first dispensary operation in California, especially one in a limited competitive market. While this is our first, it is nowhere near our last, as we expect to significantly expand our dispensary footprint in the state over the coming months,” said Kevin Murphy, Founder, Chairman, and Chief Executive Officer of Acreage Holdings, Inc.
Currently trading at a market capitalization of $1.91B, ACRGF has a significant war chest ($74.2M) of cash on the books, which compares with about $69.9M in total current liabilities. One should also note that debt has been growing over recent quarters. ACRGF is pulling in trailing 12-month revenues of $12.8M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 160%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. Sign-up for continuing coverage on shares of $ACRGF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $ACRGF, either long or short, and we have not been compensated for this article.