Acreage Holdings Inc (OTCMKTS:ACRGF) Continues to Walk the Line

Acreage Holdings Inc (OTCMKTS:ACRGF) Continues to Walk the Line

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As cannabis stocks get hot and stay hot, we have seen a few laggards, such as Acreage Holdings Inc (OTCMKTS:ACRGF). The question here is really about whether or not we see a catch-up second and third tier process. In that vein, the company just reported financial results for the first quarter of 2020.

According to the release, first quarter reported revenue was $24.2 million, an 88% increase compared to the same period in 2019, and a 15% increase compared to the fourth quarter of 2019; pro forma revenue was $37.6 million, a 65% increase compared to the same period in 2019, and a 17% increase compared to the fourth quarter of 2019; and gross margin was 41.1%, a 10 basis point decrease versus the same period in 2019, and a 400 basis point increase compared to the fourth quarter of 2019.

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 reported financial results for the first quarter of 2020.

We’ve witnessed 2% tacked on to share pricing for the name in the past week. In addition, the listing has witnessed a pop in interest, as transaction volume levels have recently pushed 19% beyond its prior sustained average level.

“With the COVID-19 pandemic affecting millions across the U.S., the cannabis industry was faced with yet another significant challenge. Our dispensary and processing and cultivation associates quickly adapted to these changing dynamics ensuring our patients and customers in need were still served with dignity and respect, while maintaining a safe environment for everyone.  Additionally, I am pleased with the reacceleration of our reported and pro forma revenue as our wholesale business continues to ramp and our dispensaries continue to mature,” said Bill Van Faasen, interim Chief Executive Officer of Acreage.

Currently trading at a market capitalization of $221M, 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.