Acreage stock tumbles on Wednesday after Acreage Holdings (OTCQX:ACRGF) reported a wider loss for the fiscal first quarter.
Q1 Loss $31.2 million
New York-based cannabis producer Acreage Holdings posted its financial results for the fiscal first quarter on Tuesday and also made the presentation of the financial highlights for the company. In its financial results, Acreage Holdings’ losses widened to $31.2 million compared to $4.2 million in the same quarter a year ago. The loss per share came in at 39 cents, while it stood at 8 cents in the year-ago period.
However, despite the pain of losses, the company managed to grow its revenues considerably and recorded revenues of $12.9 million for the quarter, a whopping 487% jump from $2.2 million in the same quarter of 2018.
Acreage stock is down over 5% in late morning trade, selling at $18.26 on the OTC market.
Update on Canopy-Acreage Deal
There was other news regarding the company that was quite significant in nature. Canopy Growth (TSX:WEED) (NYSE:CGC), one of the biggest players in the cannabis industry, back in April reached a deal to buy Acreage Holdings within the next 90 months, and it is believed it is geared towards the potential legalization of cannabis in the United States. There are many other factors that could affect the deal, but it has now emerged that the company’s shareholders are fully behind the deal.
Acquisitions of this nature require the approval of shareholders, and in a significant development, it has come to light that in a special meeting, 91% of Acreage stock shareholders agreed to the deal with Canopy Growth.
If cannabis is legalized by the US Congress, then the deal could be completed immediately, and Acreage Holdings could walk away with $3.4 billion. There is hope within many quarters that legalization could happen at some point in the future.
However, it remains to be seen how the shareholders of Canopy Growth reacted to the proposal. Kevin Murphy, the Chief Executive Officer of Acreage, has stated that top executives at the company are fully behind the deal. He stated, “Our executives remain 110% committed to the long-term Acreage story.”
Acreage stock has fallen over 25% from its recent peak price of $24.15.
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