Acreage Holdings, Inc. (OTC:ACRHF), a multi-state operator of cannabis cultivation and retailing facilities, announced its Q2 2024 earnings on Wednesday, revealing a mixed financial landscape marked by strategic expansions yet shadowed by a significant net loss and a revenue dip, down 33% year-over-year.

Q2 2024 Financial Highlights

• Consolidated revenue of $39 million, compared to the $58 million in Q2 2023.
• Net loss was $24.1 million, increasing from the $18.2 million of the same quarter last year.
• Adjusted EBITDA was a gain of $1.9 million, down from the $6.8 million reported in the second quarter of 2023.
• Gross profit was $16.9 million, a slight decrease compared to the $21.1 million in Q2 2023.

Revenue Decline Linked To Liquidity Constraints

The company attributed the revenue decline primarily to liquidity constraints that affected inventory levels and sales. Despite these challenges, Acreage highlighted strategic growth initiatives and a robust restructuring plan poised to steer future profitability.

Acreage also experienced a gross margin improvement to 43% compared to 36% in the same period last year. However, constrained by credit issues and cash preservation needs, the company reported a stark decrease in adjusted EBITDA to $1.9 million, a significant drop from $6.8 million in Q2 2023.

Read Also: $75 For An Eighth Of An Ounce? Why Are New Jersey Cannabis Prices Still So High?

CEO Commentary

Dennis Curran, CEO of Acreage, acknowledged the financial hurdles. "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."

Ohio Market Expansion And Growth In Key States

In addition, Acreage has been active in expanding its market reach, notably with legal recreational sales in Ohio where the cannabis market is estimated to hit $2.3 billion within a year. The move is expected to double the state's revenue by 2025 from approximately $50 million in 2023.

Despite the challenging quarter, Acreage is gearing up for a reaccelerated growth trajectory in core states including New Jersey, Illinois and Connecticut, supported by a recapitalization strategy and new product launches aimed at revitalizing its market presence.

Acreage Integration With Canopy

The quarter also saw Acreage advancing its acquisition by Canopy USA (NASDAQ:CGC), which is set 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.

ACRHF Price Action
ACRHF's shares were trading 14.91% higher at $0.2197 per share at the time of this writing around 10:30 AM ET Thursday.

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