Acreage Holdings, Inc. (ACRFH), a multi-state operator in the cannabis industry, announced its second-quarter 2024 earnings on Wednesday, revealing a mixed financial picture. The company experienced strategic expansions, but also a significant net loss and a drop in revenue, down 33% year-over-year.
Consolidated revenue for Q2 2024 reached $39 million, a decrease from $58 million in the same period last year. The company attributed this decline primarily to liquidity constraints, which impacted inventory levels and sales. Despite these challenges, Acreage highlighted its strategic growth initiatives and a robust restructuring plan aimed at driving future profitability.
The net loss for the quarter was $24.1 million, an increase from the $18.2 million recorded in Q2 2023. While the company reported a gain in adjusted EBITDA of $1.9 million, this represented a significant drop from the $6.8 million achieved in the second quarter of 2023. Gross profit also saw a slight decrease, landing at $16.9 million compared to $21.1 million in Q2 2023. Despite these challenges, Acreage achieved an improved gross margin of 43% compared to 36% in the same period last year.
Acreage’s CEO, Dennis Curran, acknowledged the financial hurdles the company faced. He stated that “While our results in the first half of 2024 were constrained by credit challenges and the need to preserve cash, we’ve now recapitalized our business and expect our commercial activities in key markets, as well opening of the non‐medical market in Ohio, to significantly accelerate revenue and Adjusted EBITDA for the remainder of the year.”
Looking ahead, Acreage is focusing on expanding its market reach, particularly in Ohio, where the cannabis market is projected to reach $2.3 billion within a year. This expansion is expected to double the state’s cannabis revenue by 2025 from approximately $50 million in 2023. Despite the challenges faced in Q2, Acreage is confident in its ability to achieve reaccelerated growth in key states such as New Jersey, Illinois, and Connecticut, leveraging its recapitalization strategy and new product launches to revitalize its market presence.
The quarter also saw Acreage making progress with its acquisition by Canopy USA (CGC), which is slated to close in the first half of 2025. This acquisition is anticipated to further integrate Acreage into the broader Canopy ecosystem, enhancing collaborative opportunities and operational synergies. As of Thursday morning, ACRHF’s shares were trading 14.91% higher at $0.2197 per share.
