Acreage Holdings (ACRG) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $39.0 million, down 33% year-over-year and 14% sequentially, mainly due to liquidity constraints and inventory shortages.

• Net loss for Q2 2024 was $24.1 million, compared to a loss of $18.2 million in Q2 2023.

• Adjusted EBITDA was $1.9 million, down from $6.8 million in Q2 2023, reflecting lower sales and ongoing credit challenges.

• Commenced non-medical sales in Ohio, aiming to double state revenue by 2025 from ~$50 million in 2023.

• Advancing acquisition by Canopy USA, expected to close in H1 2025.

Financial highlights

• Gross margin improved to 43% in Q2 2024 from 36% in Q2 2023, driven by operational efficiencies and cost controls.

• Total operating expenses reduced by 14% year-over-year to $22.5 million.

• Consolidated EBITDA loss was $16.5 million, compared to a positive $2.3 million in Q2 2023.

• Ended Q2 2024 with $10.0 million in cash and cash equivalents.

• Completed a $10 million brokered private placement for working capital.

Outlook and guidance

• Management expects revenue and Adjusted EBITDA to accelerate in H2 2024, supported by recapitalization and Ohio market entry.

• Retail sales are showing improvement in the current quarter, with inventory restocking underway in core states.

• Plans to open new dispensaries in Pennsylvania and relocate a New Jersey dispensary, with further expansion pending regulatory approval.