Acreage Shifts Gears, Sells Assets, Takes Up To $100M Write-Down

Cannabis investment firm Acreage Holdings Inc., ACRG (OTC: ACRGF) announced Monday the sale of undeveloped real estate located in Nantucket, Rhode Island and a dispensary in Fargo, North Dakota.

The deal terms were not disclosed.

The New York-based multistate operator said the moves should prompt margin improvements and a positive pro-forma adjusted EBITDA in 2020. 

Acreage estimates it will report a write-down of $80 to $100 million in the first quarter of this year.

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Acreage moved its strategic focus due to the coronavirus pandemic's consequences for the regional and national economy as well as the cannabis market, Acreage Chairman and CEO Kevin Murphy said in a statement. 

"The impact of the COVID-19 pandemic on U.S. cannabis operators has been profound, at a time when the industry was already reeling from decreased access to capital, legislative uncertainty, and the illicit-market vaping crisis that struck our industry by association." 

Earlier this year, Acerage made similar maneuvers to optimize its operational costs, including April's business cutbacks when the company fired 122 employees and transformed its Queens dispensary into a delivery hub. 

At that time, Murphy disclosed the company's withdrawal from deals with Deep Roots and Greenleaf.

The stock was trading 12.08% higher at $2.32 at the time of publication Monday.

Courtesy photo.