Acreage Holdings Inc. plans to leverage its cannabis medical market presence as adult use sales open up in New York, New Jersey and Connecticut, the company’s chief financial officer said.
Adult use sales in selected stores opened up in New Jersey on April 21, as a “huge driver” for growth in 2022, plus New York and Connecticut are also readying their markets as well, CFO Steve Goertz said.
“The dominos are stacking up very well for us in the Northeast,” Goertz said.
Like other cannabis stocks, Acreage’s share price remains in the red for 2022 amid dim prospects for U.S. federal legalization in Congress in the near future.
“There was a big runup in cannabis share prices beginning in 2021 after the election when people thought that there would be federal reform right away,” Goertz said. “Those prospects go up and down, but right now sentiment is negative.”
Many big brokerages and fund managers in the U.S. won’t allow investors to buy shares of a domestic, plant-touching business because cannabis remains illegal under federal law.
“A lot of retail investors came into the space expecting large profits, but valuations have collapsed and they’ve taken losses and there’s fatigue,” Goertz said. “Until there’s impetus for change in Washington, it’ll be a tough environment” for stocks.
Acreage’s first-quarter results released on Thursday showed the company’s revenue jumped 50% with boosts from acquisitions in California, Ohio and Maine.
The company ended the quarter with 1,100 employees and $32 million in cash.
Acreage’s net loss widened to $14 million, or 12 cents a share, from $8.6 million, or 8 cents a share in the year-ago quarter.
Revenue increased to $56.9 million from $38.4 million.
Acreage fell short of the analysts estimates for a loss of 5 cents a share with revenue of $57.5 million.