Revenues fall at Acreage Holdings, as expenses are slashed

Acreage Holdings, Inc. (CSE: ACRG.A.U, ACRG.B.U) (OTCQX: ACRHF, ACRDF) reported its financial results for the fourth quarter and full fiscal year ending December 31, 2023, after the markets closed on Monday.

Fourth-quarter earnings

Acreage reported that its consolidated revenue in the fourth quarter was $52.8 million, a drop from last year’s revenue of $57.4 million for the same quarter. The net loss for the quarter was $35.7 million, which was a huge improvement over last year’s fourth-quarter net loss of $119 million. The company attributed the decline in sales to market price compression across various markets, which was somewhat offset by revenue growth in both New Jersey and Connecticut.

On a positive note, total operating expenses for the quarter were $41.4 million which dropped 72% from last year’s $147.6 million. The company said the operating expenses decreased due to an approximate 46% reduction in general and administrative expenses related to lower professional fees achieved by continued cost controls. “Additionally, a decrease in equity-based compensation expenses and depreciation and amortization expenses contributed to the reduction in operating expenses when compared to Q4 2022,” said the company in its earnings statement.

Full-year earnings

Acreage reported that its full-year consolidated revenues were $223.4 million, which fell from 2022’s revenue of $237.1 million. The net loss for the year was $69 million, which fell from last year’s net loss of $139 million. Acreage ended the fiscal year 2023 with $13.6 million in cash and cash equivalents and $4.0 million of restricted cash. The company ended 2022 with $24 million in cash.

“Throughout 2023, we completed various strategic initiatives that have positioned us strongly ahead of our acquisition by Canopy USA,” said Dennis Curran, Chief Executive Officer of Acreage. “During the quarter, we completed the anticipated expansion of our Egg Harbor, New Jersey facility, bolstering these operations with more canopy and manufacturing equipment to increase output of in-demand, high-margin products such as edibles and concentrates. We also upgraded our cultivation capabilities in Freeport, Illinois, where we produce non-remediated flower, a unique and top-selling offering to the market. Our flagship brands continue to perform exceptionally well, particularly in new states where they have recently made their debut, such as New Jersey for Superflux and New York and Pennsylvania for The Botanist. This has prompted us to optimize our portfolio and focus on expanding distribution of our most successful products and brands that will cohesively fit into Canopy USA‘s ecosystem alongside Wana and Jetty.”

Mr. Curran continued, “Following the quarter, we achieved a major milestone through our long-awaited entry into New York’s adult-use wholesale market. In Connecticut, we expanded our retail footprint with the relocation of our third dispensary to Vernon, which is now operating as a hybrid storefront serving both patients and adult-use consumers. We firmly believe we have built one of the strongest Northeastern footprints, and our robust presence in states such as New York, New Jersey, and Connecticut will continue to grow our topline as we deepen our presence in these developing markets in anticipation of our entry into Canopy USA.”

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