Debra Borchardt
New York-based cannabis company Acreage Holdings began trading on the Canadian Securities Exchange using the symbol ACRG.U and pricing the shares at $25. The “U” in the symbol designates that the company is trading in Canada, but in U.S. currency. The company has raised $314 million prior to going public and gained a great deal of attention after naming high profile politicians to the board of directors.
Prior to trading Acreage had a $2.5 billion valuation and it is expected to pop to $2.8 billion following the opening of trading. CEO Kevin Murphy will own 20% of the company, but he will retain 80% of the voting rights.
Acreage Holdings has one of the largest footprints of the quickly expanding universe of multi-state operators. It is in 17 states and most recently during the company’s road show picked up the approval for a license in Oklahoma.
Investors that want to buy shares in Acreage will mostly be making that decision with little information on hard numbers. By doing a reverse takeover of TK, Acreage wasn’t required to disclose financial information. President George Allen confirmed that the company would not be releasing projected revenue figures. “We didn’t want to put out 2020 numbers,” he said. “We want people to invest with us based on our footprint and not projected revenues.” He felt that some companies suggest they will make huge revenues and then in order to make those numbers go on an acquisition bender to try to keep investors happy.
Acreage isn’t buying other companies in order to make ambitious projected sales figures, said Allen. “We’ve always been acquisitive, so this isn’t new,” he said. By raising more capital, Allen said the company would accelerate its pace of acquisitions.
Allen said that the difference between Acreage and other multi-state operators is the scale of the operation. “It’s the team and the assets we have,” he said, “Execution will be the difference. Plus, investors like larger players.”
Acreage wouldn’t comment on a recent lawsuit in which it was named as a party. The lawsuit claimed that Acreage acquired a property and this particular investor (EPMMNY) wasn’t included in the sale. A review of the legal document shows that EPMMNY’s equity stake was never finalized and so it wasn’t included in the final application for New York Canna. Acreage ultimately ended up owning all of NY Canna, also known as Terradiol NY. The plaintiff is seeking no less than $100 million to compensate it for sustained damages as well as punitive damages of at least $300 million.
Considering that this license was awarded in May of 2017, but the party didn’t file a lawsuit until a week before Acreage looked to be going public makes it seem as if the plaintiff decided to wait until it looked like Acreage could have a deep pocket following its stock going public.
Future Markets
Allen believes there are several states that could be coming on strong. He thinks that Colorado could potentially change its laws to allow outside investors into the industry. This would unlock many companies that had been hoping to sell their operations.
He is also keenly interested in Michigan. The state recently legalized adult use cannabis. “States that began with a caregiver model that then add adult use, tend to be strong markets,” said Allen.
Acreage’s home state of New York has one of the most restrictive medical cannabis markets in the country. However, the midterm elections flipped the state to a democratic rule and there has been a lot of speculation that New York will legalize adult use. “We’ll watch the budget cycle in March and April and if the Governor is serious, we see that reflected in the budget.”
Allen actually thinks Connecticut will legalize adult use sooner. “The governor is open to cannabis and the state is having major financial difficulties,” he said. “They could use the extra revenue.”
21 comments
robert wolcott
November 15, 2018 at 10:32 am
Hi, is acreage holdings planning on listing on the US stock exchange?
Debra Borchardt
November 15, 2018 at 7:17 pm
Yes, they plan on trading on the OTC.
Chris
November 15, 2018 at 11:45 pm
What is the symbol in the us. Acrg.u doesnt work
Bill
November 16, 2018 at 7:52 am
Do you know when they will start on the OTC?
Debra Borchardt
November 16, 2018 at 10:06 am
I don’t have that information yet
Steve
November 16, 2018 at 2:56 pm
ACRZF is the OTC symbol. Just bought some.
Doc
November 15, 2018 at 11:03 am
Acreage will be them dominant US Cannabis company. Their leadership and phenomenal Board they have assembled will only accept the top podium spot. You can take that to the bank.
Steve Nielsen
November 15, 2018 at 12:19 pm
There is an error in your article, the shares were priced at $25 USD, not $25 Cdn. Thx.
Debra Borchardt
November 15, 2018 at 7:16 pm
It’s been fixed.
Travis Martin
November 15, 2018 at 6:45 pm
I wanted to introduce myself and ask for your assistance in wrapping around the whole legalization of marijuana. I have seen that you have the Honorable John Boehner on your board. It puzzles me that he switched in his opinion and I would be interested in learning more of his testimony. Also would you tell me what kind of compensation he gets for his involvement? I have attached a letter to the editor I resent sent on some steps happening in PA. I am also part of the agricultural community and see the inroads being made there. This is a paradigm change in my thinking and I want to have understanding. Thank you for your time
Travis Martin
Attached letter for your response
City Council to Decriminalize Marijuana
Lancaster City is considering decriminalizing certain marijuana use. This jeopardizes our community and the role of the state and federal government in our drug laws. What Lancaster City is failing to adequately communicate is a definition of decriminalization or examples of how making such changes have worked out in other communities. What are the ramifications to a municipality and the community when passing ordinances that are contrary to established laws on a national and state level? I don’t understand what merit there is to make it easier to possess an addictive and illegal substance? Philadelphia, York, Erie, Pittsburg, State College, Allentown and Bethlehem have elected officials who recently passed similar ordinances to make it easier—one might say invite—a person to possess small amounts of marijuana. Understand that our silence will be interpreted as consent to this change.
I was part of the Lancaster City that embraced revitalization by implementing “The Broken Window Theory,” the concept that each problem that goes unattended to affects people’s attitude towards that environment and leads to more problems. When we address smaller issues, larger ones often get solved. Let us as individuals and as a community attend to the brokenness in each of us, our families and to the least of us. Let us believe that the broken windows are redeemable in our community and prevent them from being broken from inside and outside of our homes. Lancaster County community which includes Lancaster City is a community worth protecting from drugs.
Travis Martin
Debra Borchardt
November 15, 2018 at 7:15 pm
You should probably contact Acreage directly for an answer to your questions.
James
November 15, 2018 at 8:39 pm
When does Acreage go on the OTC and what is the symbol going to be?
Thanks
Debra Borchardt
November 16, 2018 at 10:08 am
We don’t have date for that yet.
Steve
November 16, 2018 at 3:00 pm
Today I just ordered some ACRZF.
Chris
November 15, 2018 at 11:40 pm
How do i buy the stock in the u.s. on schwab or etrade. The symbols dont show up
Debra Borchardt
November 16, 2018 at 10:07 am
They tend to show up in a day or two. Although I’m sure if you called them they could manually put it through.
Scott dust
November 16, 2018 at 5:19 am
What is the stock symbol for acreage holdings cannabis company?
Debra Borchardt
November 16, 2018 at 10:06 am
ACRG.U
Steve
November 16, 2018 at 3:01 pm
ACRZF is the OTC
Ano Demeane
November 18, 2018 at 2:36 am
Is there a Canadian Stock Exchange app for IPhone
Debra Borchardt
November 19, 2018 at 8:30 am
Most of the brokerages have their own app. Yahoo Finance app usually recognizes Canadian symbols.