Acreage Holdings Reports Fourth Quarter and Full Year 2019 Results

NEW YORK, Feb. 26, 2020 (GLOBE NEWSWIRE) — Acreage Holdings, Inc. (“Acreage”) (CSE: ACRG.U) (OTCQX: ACRGF) (FSE: 0VZ), one of the largest vertically integrated cannabis operators in the U.S., today reported financial results for the fourth quarter and year ended December 31, 2019.


  • Reported fourth quarter revenue of $21.1 million and full year 2019 revenue of $74.1 million, a 101% and 251% increase, respectively, compared to the same periods in 2018

  • Pro forma revenue* for the fourth quarter and full year 2019 was $43.6 million and $155.5 million, respectively, a 90% and 101% increase compared to the same periods in 2018

  • Reported a net loss attributable to Acreage of $50.6 million and $150.3 million for the fourth quarter and full year 2019, respectively

  • Adjusted net loss* attributable to Acreage was $14.6 million and $50.6 million for the fourth quarter and full year 2019, respectively

  • Pro forma adjusted EBITDA* was a loss of $15.8 million and $44.4 million for the fourth quarter and full year 2019, respectively

*Pro forma revenue, adjusted net loss and pro forma adjusted EBITDA are non-GAAP measures. Please see discussion and reconciliation of non-GAAP measures below.

“While 2019 was a challenging year for the industry, I am pleased with the many accomplishments we delivered for shareholders including: launching three award-winning brands, implementing our Canopy Growth strategies, and significantly growing our retail and wholesale businesses.  We subsequently secured capital for our short-term operating requirements, and we are targeting positive pro-forma adjusted EBITDA in the second half of the year,” said Kevin Murphy, Chair and CEO of Acreage.


  • Build out 10 to 15 new retail dispensaries, focused on existing footprint to scale operations as quickly as possible

  • Increased focus on growing our wholesale business, leading to planned wholesale revenue mix of approximately 20%

  • Implement general and administrative (“G&A”) cost savings initiatives, leading to nearly $7 million in annualized savings, or 12% of reported G&A in 2019

  • Capital expenditures of $45 to $50 million, primarily for cultivation and processing facilities and dispensary buildouts

  • Targeting positive pro-forma adjusted EBITDA in back half of the year


Acreage will host a conference call with management on Wednesday, February 26th at 8:30 A.M. Eastern Standard Time. The call will be webcast and can be accessed at To listen to the live call, please go to the website at least 15 minutes early to register, download and install any necessary audio software.


Headquartered in New York City, Acreage is one of the largest vertically integrated, multi-state operators of cannabis licenses and assets in the U.S., according to publicly available information. Acreage owns licenses to operate or has management or consulting services or other agreements in place with license holders to assist in operations in 20 states (including pending acquisitions) with a population of approximately 180 million Americans, and an estimated 2022 total addressable market of $16.7 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. Acreage’s national retail store brand, The Botanist, debuted in 2018.

On June 27, 2019 Acreage implemented an arrangement under section 288 of the Business Corporations Act (British Columbia) (the “Arrangement”) with Canopy Growth Corporation (“Canopy Growth”). Pursuant to the Arrangement, the Acreage articles were amended to provide Canopy Growth with an option to acquire all of the issued and outstanding shares in the capital of Acreage, with a requirement to do so, upon a change in federal laws in the United States to permit the general cultivation, distribution and possession of marijuana (as defined in the relevant legislation) or to remove the regulation of such activities from the federal laws of the United States (the “Triggering Event”), subject to the satisfaction of the conditions set out in the arrangement agreement entered into between Acreage and Canopy Growth on April 18, 2019, as amended on May 15, 2019 (the “Arrangement Agreement”). Acreage will continue to operate as a stand-alone entity and to conduct its business independently, subject to compliance with certain covenants contained in the Arrangement Agreement. Upon the occurrence or waiver of the Triggering Event, Canopy Growth will exercise the option and, subject to the satisfaction or waiver of certain conditions to closing set out in the Arrangement Agreement, acquire (the “Acquisition”) each of the Subordinate Voting Shares (following the automatic conversion of the Class B proportionate voting shares and Class C multiple voting shares of Acreage into Subordinate Voting Shares) in exchange for the payment of 0.5818 of a common share of Canopy Growth per Subordinate Voting Share (subject to adjustment in accordance with the terms of the Arrangement Agreement). If the Acquisition is completed, Canopy Growth will acquire all of the Acreage Shares, Acreage will become a wholly owned subsidiary of Canopy Growth and Canopy Growth will continue the operations of Canopy Growth and Acreage on a combined basis. For more information about the Arrangement and the Acquisition please see the respective information circulars of each of Acreage and Canopy Growth dated May 17, 2019, which are available on Canopy Growth’s and Acreage’s respective profiles on SEDAR at For additional information regarding Canopy Growth, please see Canopy Growth’s profile on SEDAR at


This release contains tables that reconcile our results of operations reported in accordance with accounting principles generally accepted in the United States of America (“GAAP”) to adjusted results that exclude the impact of certain items identified as affecting comparability (non-GAAP). We use EBITDA, adjusted EBITDA, adjusted net loss attributable to Acreage, managed results of operations, and pro forma results of operations, among other measures, to evaluate our actual operating performance and for planning and forecasting future periods. We believe the adjusted results presented provide relevant and useful information for investors because they clarify our actual operating performance, make it easier to compare our results with those of other companies and allow investors to review performance in the same way as our management. Since these measures are not calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, our reported results as indicators of our performance, and they may not be comparable to similarly named measures from other companies. The tables below reconcile our results of operations in accordance with GAAP to the adjusted results mentioned above:

Pro forma Bridge
US$ (thousands)  Q4’19 Q4’18 FY’19 FY’18
Reported Revenue $21,065  $10,472  $74,109  $21,124 
Revenue from Entities under Management or Consulting Agreements*
 New England 4,547  4,098  17,300  9,746 
 Mid-Atlantic 2,837  1,509  8,315  2,490 
 Midwest 3,213    8,565   
 West 532    2,155   
Managed Revenue* $32,194  $16,079  $110,444  $33,360 
Pro forma Adjustments*        
 New England 3,811  5,266  16,004  37,484 
 Mid-Atlantic       2,111 
 Midwest   1,266  670  3,223 
 West 7,600  323  28,419  1,055 
Pro forma Revenue* $43,605  $22,934  $155,537  $77,233 
Reconciliation of GAAP to Non-GAAP Measures
US$ (thousands, except per share amounts)Q4’19 Q4’18 FY’19 FY’18
Net loss (GAAP)$(65,589) $(29,761) $(195,162) $(32,261)
Income tax expense (benefit)(1,136) 609  4,989  1,536 
Interest (income) expense, net(209) 202  (2,784) 3,439 
Depreciation and amortization2,280  1,905  7,593  3,749 
EBITDA (non-GAAP)*$(64,654) $(27,045) $(185,364) $(23,537)
Adjusting items:       
(Income) loss from investments, net1,249  3,249  480  (21,777)
Loss on impairment of intangible assets13,463    13,463   
Equity-based compensation expense – Plan14,720  9,862  62,946  9,862 
Equity-based compensation expense – Plan (CGC Awards)11,971    23,056   
Equity-based compensation expense – other3,005  34  11,536  1,368 
Canopy Growth transaction costs    7,580   
Other non-recurring expenses1,968  7,109  11,148  15,004 
Adjusted EBITDA (non-GAAP)*$(18,278) $(6,791) $(55,155) $(19,080)
Pro forma Bridge
US$ (thousands)  Q4’19 Q4’18 FY’19 FY’18
Adjusted EBITDA* $(18,278) $(6,791) $(55,155) $(19,080)
Managed/Pro forma Adjustments*        
 New England 1,381  2,545  6,824  12,793 
 Mid-Atlantic 1,082  (747) 2,804  (900)
 Midwest (268) (2,163) (2,306) (1,972)
 West 301  337  3,409  (83)
Pro forma Adjusted EBITDA* $(15,782) $(6,819) $(44,424) $(9,242)

Due to the Company’s transition from IFRS to U.S. GAAP, certain expenses related to leased assets formerly classified as depreciation and interest expense are now included in EBITDA as a general and administrative expense. The Company’s lease expenses associated with non-finance leases were $1,141 in Q1’19, $1,241 in Q2’19, $1,935 in Q3’19, and $2,148 in Q4’19, for a full year 2019 impact of $6,465.

Reconciliation of GAAP to Non-GAAP Measures
US$ (thousands, except per share amounts)Q4’19 Q4’18 FY’19 FY’18
Net loss attributable to Acreage Holdings, Inc. (GAAP)$(50,631) $(25,587) $(150,268) $(27,483)
Net loss per share attributable to Acreage Holdings, Inc. (GAAP)$(0.56) $(0.31) $(1.74) $(0.41)
Adjusting items:(1)       
(Income) loss from investments, net$969  $2,779  $367  $(20,684)
Loss on impairment of intangible assets10,446    10,307   
Equity-based compensation expense – Plan11,421  8,436  48,191  9,367 
Equity-based compensation expense – Plan (CGC Awards)9,288    17,652   
Equity-based compensation expense – other2,332  29  8,832  1,299 
Canopy Growth transaction costs    5,803   
Other non-recurring expenses1,527  6,081  8,535  14,251 
Total adjustments$35,983  $17,325  $99,687  $4,233 
Adjusted net loss attributable to Acreage Holdings, Inc. (non-GAAP)*$(14,648) $(8,262) $(50,581) $(23,250)
Adjusted net loss per share attributable to Acreage Holdings, Inc. (non-GAAP)*$(0.16) $(0.10) $(0.59) $(0.35)
Weighted average shares outstanding – basic and diluted90,245  82,736  86,185  66,699 
Weighted average NCI ownership %22.41% 14.46% 23.44% 5.02%

(1) Adjusting items have been reduced by the respective non-controlling interest percentage for the period.

Managed results of operations are GAAP reported results plus the results of all entities for which we provide operational assistance to through management or consulting services or other agreements. Such entities operate independently and Acreage has no control over their operations. We do not consolidate revenue from these entities due to lack of control.

Pro forma results of operations are managed results, plus the pre-acquisition results for all acquired entities from the beginning of the applicable period presented through the date prior to the acquisition date.