Executive Summary

Q1 2024 revenue was $45.3M, down 14% sequentially and 19% year-over-year; gross margin printed at -3% due to a change in inventory costing estimates, with adjusted gross margin at 31% after non-cash adjustments. Net loss was $33.3M; diluted EPS was -$0.24 .
Adjusted EBITDA was $2.0M (4% margin), down from $4.3M in Q4 2023 and $10.6M in Q1 2023 as price compression and inflation weighed on profitability despite OpEx falling 15% YoY .
Strategically, Acreage entered New York’s adult-use wholesale market, converted its third Connecticut dispensary to hybrid, and achieved record monthly production in New Jersey in March—all aimed at strengthening its Northeastern footprint .
Liquidity tightened: cash was $7.3M and restricted cash $2.5M; current debt reclassified to $136.6M with non-current debt at $101.3M, elevating near-term balance sheet risk focus .
Management highlighted a forthcoming “transformational period” tied to the Canopy USA ecosystem and adult-use sales commencing in Ohio—key potential stock catalysts alongside New York wholesale scale-up .

What Went Well and What Went Wrong

What Went Well

Entry into New York adult-use wholesale with The Botanist’s full product menu; expanded offerings (fast-acting/ratio/extrahigh gummies, all-in-one vapes, new flower strains) broadened the brand’s presence .
Record-breaking monthly production in March in New Jersey following cultivation and manufacturing enhancements, supporting both retail and wholesale under The Botanist and Superflux .
Management emphasized SKU harmonization and standardized packaging across markets to improve consumer access and brand alignment: “we have harmonized and standardized our SKUs” .

What Went Wrong

Gross margin turned negative (-3%) from 48% YoY, driven largely by a change in inventory costing estimates impacting margin by $13.8M; adjusted gross margin was 31% after non-cash adjustments .
Revenue contracted to $45.3M (-19% YoY, -14% QoQ), reflecting price compression across states despite adult-use tailwinds in Connecticut .
Profitability pressure: Adjusted EBITDA fell to $2.0M (-81% YoY; -54% QoQ) amid competitive pricing and inflation; diluted EPS deteriorated to -$0.24 vs -$0.13 YoY .

Financial Results

Sequential performance (oldest → newest)

Metric ($USD Thousands unless noted)	Q3 2023	Q4 2023	Q1 2024
Revenue	$56,502	$52,798	$45,301
Gross Profit	$21,274	$16,664	$(1,497)
Gross Margin %	38%	32%	-3%
Adjusted Gross Margin %	41%	33%	31%
Total Operating Expenses	$23,775	$41,378	$21,685
Net Loss	$(7,859)	$(35,707)	$(33,319)
Diluted EPS ($)	$(0.07)	$(0.27)	$(0.24)
Adjusted EBITDA	$6,574	$4,335	$1,979
Adjusted EBITDA Margin %	12%	8%	4%

Year-over-year comparison (Q1)

Metric ($USD Thousands unless noted)	Q1 2023	Q1 2024
Revenue	$55,963	$45,301
Gross Profit (Loss)	$26,585	$(1,497)
Gross Margin %	48%	-3%
Total Operating Expenses	$25,440	$21,685
Net Loss	$(16,157)	$(33,319)
Diluted EPS ($)	$(0.13)	$(0.24)
Adjusted EBITDA	$10,593	$1,979

Segment breakdown (Q1)

Segment ($USD Thousands)	Q1 2023	Q1 2024
Retail Revenue, net	$41,881	$31,811
Wholesale Revenue, net	$13,998	$13,490
Other Revenue, net	$84	$—

Selected balance sheet KPIs

KPI ($USD Thousands)	Dec 31, 2023	Mar 31, 2024
Cash & Equivalents	$13,631	$7,342
Restricted Cash	$3,984	$2,502
Inventory	$47,675	$22,833
Debt, Current	$4,132	$136,637
Debt, Non-Current	$232,810	$101,306
Total Liabilities	$359,323	$365,280
Shareholders’ Deficit (Acreage)	$(8,906)	$(41,355)

Non-GAAP reconciliation detail is provided in Exhibit 99.1; Adjusted EBITDA excludes items including non-cash inventory adjustments and other non-recurring expenses .

Guidance Changes

No formal quantitative guidance was issued in the Q1 2024 press release. Management commentary focused on operational milestones (NY adult-use wholesale, CT hybrid expansion) and anticipated integration with Canopy USA and Ohio adult-use launch rather than specific revenue/margin ranges .

Metric	Period	Previous Guidance	Current Guidance	Change
Quantitative financial guidance	N/A	N/A	No formal quantitative guidance provided	Maintained “no guidance” stance

Earnings Call Themes & Trends

Note: A Q1 2024 earnings call transcript was not found in the document repository or public sources; themes below reflect management commentary across quarterly press releases .

Topic	Previous Mentions (Q3 2023)	Previous Mentions (Q4 2023)	Current Period (Q1 2024)	Trend
Canopy USA transaction & ecosystem	Primed business for adult-use markets; maintaining cost controls and positive Adjusted EBITDA	“Positioned strongly ahead of our acquisition by Canopy USA”; Canopy shareholders approved reorganization on Apr 12, 2024	“Anticipate a transformational period… entry into the Canopy USA ecosystem”	Intensifying strategic focus
Northeastern footprint (NY/NJ/CT)	NJ & CT strong; Vernon CT dispensary construction; Egg Harbor NJ upgrades nearing completion	Egg Harbor NJ expansion completed; Superflux launched in NJ; The Botanist gummies in NY; CT Vernon relocation	Entered NY adult-use wholesale; third CT hybrid dispensary; record NJ production in March	Expanding scale and capability
Cost discipline	“Implementing a cost structure that will allow for future growth”; disciplined cost controls	Q4 OpEx down 72% YoY, G&A down ~46%	“Focused on cash preservation… cost-saving measures” ; Q1 OpEx -15% YoY	Persistent, with mixed margin outcome due to accounting/inflation
Product innovation & brand strategy	Superflux expansions; The Botanist infused pre-rolls/new edibles	Superflux NJ, The Botanist NY gummies; edibles kitchen and extraction upgrades	The Botanist fast-acting/ratio/high potency gummies, vapes; new flower strains; SKUs harmonized	Ongoing portfolio optimization
Regulatory/legal & market openings	Preparing playbook for adult-use adoption (NY, OH)	Reorganization approval step toward Canopy USA; continued regulatory cautions	Emphasis on NY wholesale ramp and anticipated Ohio adult-use sales	Moving toward execution

Management Commentary

“In the first quarter, we diligently focused on cash preservation, implementing cost-saving measures, and honing our business strategy… entry into the New York adult-use wholesale market and the conversion of our third dispensary in Connecticut to a hybrid model” — Dennis Curran, CEO .
“We anticipate a transformational period for Acreage as we gear up for our entry into the Canopy USA ecosystem, coupled with adult-use sales kicking off in Ohio… uniquely positioned to cater to the Buckeye State's burgeoning market” — Dennis Curran, CEO .
2023 set-up for Canopy USA: “completed various strategic initiatives that have positioned us strongly ahead of our acquisition by Canopy USA… Egg Harbor, New Jersey facility expansion… upgraded cultivation in Freeport, Illinois” .
Cost discipline and brand focus: “building a company focused on strong brands and implementing a cost structure that will allow for future growth… New Jersey and Connecticut remain strong areas of performance” .

Q&A Highlights

A Q1 2024 earnings call transcript could not be located; the quarter appears to have been communicated via press release without a publicly available call transcript. Key clarifications came through the release: inventory costing change impact ($13.8M), OpEx reduction (-15% YoY), and adjusted margin dynamics .

Estimates Context

Wall Street consensus estimates via S&P Global were unavailable for ACRHF due to missing mapping; therefore, no comparison versus estimates is provided. Given reported results—revenue down 19% YoY, adjusted gross margin 31% after significant non-cash inventory adjustments, and Adjusted EBITDA down 81% YoY—coverage (where it exists) would need to reflect ongoing price compression and the accounting change’s near-term impact .

Key Takeaways for Investors

Revenue contraction and margin volatility: Q1 revenue fell to $45.3M (-14% QoQ, -19% YoY) and gross margin was -3% due to a $13.8M inventory costing change; adjusted gross margin was 31%—watch for normalization post-methodology shift .
Profitability under pressure: Adjusted EBITDA declined to $2.0M (4% margin) as price compression and inflation offset cost actions; sequential downtick from $4.3M in Q4 .
Northeastern scale-up as growth lever: Entry into NY adult-use wholesale, CT hybrid expansion, and record NJ output provide near-term volume and mix catalysts .
Balance sheet watch items: Cash of $7.3M and current debt reclassification to $136.6M heighten near-term liquidity focus; monitor debt maturities/structure and working capital (inventory drawdown to $22.8M) .
Canopy USA and Ohio adult-use as structural catalysts: Management guides to a “transformational period” with expected Ohio adult-use launch—integration synergies and product partnerships (e.g., Wana, Jetty) could expand distribution and margin profile over time .
Operating discipline continues: OpEx -15% YoY and SKU harmonization should support efficiency, but competitive pricing and inflation remain headwinds to EBITDA scaling .
No formal guidance/estimates: With no quantitative guidance and S&P Global consensus unavailable, traders should anchor on operational milestones (NY wholesale ramp, Ohio timing, Canopy USA progress) and observed price/margin trends .

Sources: Q1 2024 8-K and Exhibit 99.1 press release ; Q4 2023 press release ; Q3 2023 press release . Additional public posting of Q1 press release:

Acreage Holdings, Inc. (ACRHF)·Q1 2024 Earnings Summary