Why Acreage Holdings Inc (OTCMKTS:ACRGF) May be Worth a Fresh Look

Why Acreage Holdings Inc (OTCMKTS:ACRGF) May be Worth a Fresh Look

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Shares of Acreage Holdings Inc (OTCMKTS:ACRGF) have badly underperformed both the market and the cannabis patch, specifically, in recent action. But the stock is now probing extremely important longer-term support at its post-IPO lows registered in December of last year, and may be worth watching a bit more closely over coming days. To make matters more interesting, the company just announced the appointment of Rhonda Kratz as General Manager in the State of Florida, as well as an incremental operational update and the departure of its Chief Marketing Officer.

According to the release, “Acreage closed on a cultivation and production facility in Sanderson, a community in Baker County, FL. The location sits on 15.4 acres of land and comes with a 109,000 square foot building able to accommodate the build out a processing facility with the capabilities of Form Factory, Acreage’s recently acquired subsidiary. Acreage tentatively plans to construct a 100,000 square foot greenhouse on the property.”

Acreage Holdings Inc (OTCMKTS:ACRGF) bills itself as a principal investment firm specializing in the cannabis industry.

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 the appointment of Rhonda Kratz as General Manager in the State of Florida, as well as an incremental operational update and the departure of its Chief Marketing Officer.

While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action ACRGF shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -15% on above average trading volume.

All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -29%. Moreover, the company has seen interest climb, with an increase in recent trading volume of 83% beyond its prior sustained average level.

“We are excited to welcome Rhonda to the team as we begin to establish an aggressive Acreage footprint across the state of Florida,” said Acreage Chief Operating Officer, Bob Daino. “Given the size of the Florida market, we knew it was crucial to hire someone seasoned in retail operations.”

Currently trading at a market capitalization of $809.3M, ACRGF has a significant war chest ($139.1M) of cash on the books, which is balanced by about $19.5M in total current liabilities. ACRGF is pulling in trailing 12-month revenues of $31.8M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 487%. We will update the story again as soon as developments 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.

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