It might be useful to take a look at Acreage Holdings Inc (OTCMKTS:ACRGF) after the company just announced the first closing and drawdown of $21 million on the previously announced $100 million credit facility, with net proceeds of approximately $20.2 to Acreage, and the borrowing of $22 million by an Acreage subsidiary from IP Investment Company, LLC in a transaction that represents the initial borrowing under the previously announced loan transaction.
According to the release, “in order to fund the Cash Collateral, Acreage also announced that it closed on the initial borrowing under its previously announced Loan Transaction. The financial terms of the Loan Transaction are substantially similar to those previously disclosed in Acreage’s prospectus supplement dated February 25, 2020 filed under Acreage’s profile on www.sedar.com. The maturity date for borrowings under the Loan Transaction, subject to acceleration in certain instances, will be 366 days from the closing date of the Loan Transaction.”
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 first closing and drawdown of $21 million on the previously announced $100 million credit facility, with net proceeds of approximately $20.2 to Acreage, and the borrowing of $22 million by an Acreage subsidiary from IP Investment Company, LLC in a transaction that represents the initial borrowing under the previously announced loan transaction.
Even in light of this news, ACRGF has had a rough past week of trading action, with shares sinking something like -17% in that time. That said, chart support is nearby and we may be in the process of constructing a nice setup for some movement back the other way. Moreover, the stock has benefitted from a jump in recent trading volume to the tune of 72% above its longer-run average levels.
According to its most recent release, “Kevin Murphy, Acreage’s Chief Executive Officer, loaned US$21 million of the Borrowed Amount to the Lender in connection with the Lender’s loan to the IP Borrower. Acreage has been advised that Mr. Murphy will not be a member, an officer nor a director of the Lender and that Mr. Murphy will be entitled to receive, assuming full repayment of the Borrowed Amount at maturity, $23.1 million along with up to 304,001 Acreage subordinate voting shares. Mr. Murphy’s indirect participation in the Loan Transaction constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101 of the Canadian Securities Administrators, details of which were previously disclosed in the Prospectus Supplement.”
Earning a current market cap value of $107M, ACRGF has virtually no cash on the books, which must be weighed relative to virtually no total current liabilities. ACRGF is pulling in trailing 12-month revenues of $74.1M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 101.5%. You can bet we will update this one again as new information comes into view. 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.