Executive Summary

Q2 2024 revenue was $39.0M, down 33% YoY and down 14% QoQ, as credit constraints limited inventory availability; gross margin rebounded to 43% from -3% in Q1, reflecting operational efficiencies and fewer non‑cash inventory impacts .
Adjusted EBITDA was $1.9M (5% margin), down from $6.8M YoY and slightly below Q1’s $2.0M, as sales were constrained; non-GAAP addbacks included inventory and other non-recurring items .
Liquidity improved via a $10M brokered private placement and recapitalized credit facility; management expects H2 2024 revenue and Adjusted EBITDA to “significantly accelerate” as retail inventory is restocked in NJ/IL/CT .
Ohio adult-use launch (Aug 6) and regulatory wins (PA permit; NJ store relocation) are near-term catalysts; Canopy USA acquisition expected to close H1 2025 supports strategic integration with Wana/Jetty .
Wall Street (S&P Global) consensus estimates for ACRHF were unavailable; comparison vs estimates cannot be made due to missing coverage (S&P Global mapping) [SpgiEstimatesError].

What Went Well and What Went Wrong

What Went Well

Gross margin improved to 43% in Q2 (from -3% in Q1), driven by operational efficiencies, cost cutting, and pricing discipline; Q1 margins were depressed by non-cash inventory costing adjustments .
Strategic catalysts: Ohio adult-use sales commenced Aug 6 across five Botanist locations; entry positions Acreage to benefit from an estimated $2.3B market within a year and “expected to double revenue in the state by 2025 from ~$50M in 2023” .
Liquidity actions: $10M private placement and amended credit facility (including a Canopy subsidiary) support inventory restocking and H2 growth in NJ, IL, CT .
CEO tone: “expect…to significantly accelerate revenue and Adjusted EBITDA* for the remainder of the year,” highlighting Canopy USA integration and collaboration with Jetty/Wana .

What Went Wrong

Consolidated revenue fell 33% YoY to $39.0M (Q2) amid credit challenges and competitive pressure; Adjusted EBITDA declined to $1.9M vs $6.8M YoY .
Net loss widened YoY to $(24.1)M in Q2; interest expense ($8.4M) and other losses weighed on bottom line .
Retail inventory constraints pressured sales across the footprint in H1; management began restocking to recover lost throughput .

Financial Results

Metric	Q4 2023	Q1 2024	Q2 2024
Revenue ($USD Millions)	$52.8	$45.3	$39.0
Revenue YoY (%)	(8.2)%	(19)%	(33)%
Revenue QoQ (%)	(6.6)%	(14)%	(14)%
Gross Margin (%)	32%	(3)%	43%
Gross Profit ($USD Millions)	$16.7	$(1.5)	$16.9
Total Operating Expenses ($USD Millions)	$41.4	$21.7	$22.5
Net Loss ($USD Millions)	$(35.7)	$(33.3)	$(24.1)
EPS (Basic & Diluted) ($USD)	$(0.27)	$(0.24)	$(0.18)
Adjusted EBITDA ($USD Millions)	$4.3	$2.0	$1.9
Adjusted EBITDA Margin (%)	8%	4%	5%

Segment revenue breakdown:

Segment	Q4 2023	Q1 2024	Q2 2024
Retail Revenue, net ($USD Millions)	$39.4	$31.8	$26.4
Wholesale Revenue, net ($USD Millions)	$13.4	$13.5	$12.6

Selected balance sheet KPIs (period-end):

KPI	Dec 31, 2023	Mar 31, 2024	Jun 30, 2024
Cash and Cash Equivalents ($USD Millions)	$13.6	$7.3	$10.0
Inventory ($USD Millions)	$47.7	$22.8	$34.0
Debt, Current ($USD Millions)	$4.1	$136.6	$3.4
Debt, Non-Current ($USD Millions)	$232.8	$101.3	$258.4

Notes:

Q1 margin was depressed by a $13.8M inventory costing change; adjusted gross margin would have been 31% excluding non-cash effects .
Non-GAAP reconciliation shows Q2 Adjusted EBITDA of $1.9M after addbacks including $1.8M non-cash inventory adjustments and $8.0M other non-recurring expenses .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Ohio Revenue	FY 2025	Not provided	Expected to double vs ~$50M in 2023	Raised
Revenue & Adjusted EBITDA	H2 2024	Not provided	“Significantly accelerate” as inventory restocking progresses	Raised
NJ Dispensary Relocation (Collingswood)	Late Nov 2024 (medical opening)	Not applicable	First borough dispensary; plans to convert to hybrid pending approval	New operational milestone
Pennsylvania Entry	Early 2025	Not applicable	Permit granted; up to three medical dispensaries; establish vertical operations	New market entry timeline
Canopy USA Acquisition	H1 2025 close expected	Not applicable	Canopy exercised option; integration advancing	Transaction timeline set

No numeric ranges provided for revenue, margins, OpEx, OI&E, tax rates, or dividends in Q2 materials; guidance conveyed directionally via management commentary .

Earnings Call Themes & Trends

No Q2 2024 earnings call transcript was found in our document catalog; therefore, themes reflect management disclosures in Q2/Q1/Q4 press releases [List: 0 earnings-call-transcript].

Topic	Q4 2023 (Prior-2)	Q1 2024 (Prior-1)	Q2 2024 (Current)	Trend
Credit/Liquidity Constraints	Emphasis on cost controls; reduced OpEx; margin pressured by price compression	Cash preservation; cost-saving measures	Credit challenges constrained retail inventory; recapitalization and $10M placement	Improving liquidity; easing constraints
Inventory/Operations	Egg Harbor expansion; productivity per plant doubled	Record monthly production NJ; SKU harmonization	Retail inventory restocking underway; margin improved to 43%	Re-acceleration expected
Regional Expansion (Northeast)	NJ/NY/CT footprint strengthened	NY adult-use wholesale entry; CT third hybrid	Ohio adult-use launch; NJ relocation; PA permit	Broader multi-state catalysts
Product Portfolio	Superflux launch in NJ; The Botanist gummies in NY	Botanist offerings expanded NY/NJ; Superflux edibles IL	Superflux live resin vapes NY/NJ; Botanist vapes/gummies NY/NJ	Deeper brand distribution
Regulatory/Strategic (Canopy USA)	Canopy reorg approved Apr 12	Anticipating entry into Canopy USA	Canopy option exercised; H1 2025 close expected	Integration progressing

Management Commentary

“We’ve now recapitalized our business and expect our commercial activities in key markets, as well opening of the non‑medical market in Ohio, to significantly accelerate revenue and Adjusted EBITDA* for the remainder of the year.” — Dennis Curran, CEO
“We are accelerating our integration including driving greater collaboration with our partners at Jetty and Wana… poised to seize these opportunities and drive profitability forward as a unified force.” — Dennis Curran, CEO
“In the first quarter, we diligently focused on cash preservation, implementing cost-saving measures, and honing our business strategy… We have harmonized and standardized our SKUs… for greater consumer access and brand alignment.” — Dennis Curran, CEO
“We firmly believe we have built one of the strongest Northeastern footprints… in anticipation of our entry into Canopy USA.” — Dennis Curran, CEO

Q&A Highlights

No Q2 2024 earnings call transcript was available; Q&A themes and clarifications cannot be assessed from transcripts. We rely on management commentary in the press releases [List: 0 earnings-call-transcript].

Estimates Context

S&P Global consensus estimates (Revenue, EPS) for Q2 2024 were unavailable due to missing CIQ mapping for ACRHF; therefore, no comparison to Street consensus can be made at this time (Values unavailable; S&P Global coverage gap) [SpgiEstimatesError].
Given directional guidance (H2 acceleration; Ohio adult-use), sell-side models may need to reflect improved throughput and margin normalization as inventory restocking progresses .

Key Takeaways for Investors

Revenue contracted sharply in Q2 due to credit-driven inventory constraints, but margin rebounded to 43%; Q1 margin was distorted by non-cash inventory costing changes, making Q2 a cleaner operational read-through .
Liquidity actions (recapitalized credit facility; $10M private placement) and inventory restocking are pivotal to the H2 recovery narrative in NJ/IL/CT; monitor sequential revenue and Adjusted EBITDA trajectory in Q3/Q4 .
Ohio adult-use launch is a material catalyst; management expects Ohio revenue to double by 2025 vs ~$50M in 2023, with additional brand rollouts (Jetty solventless) to follow .
Strategic integration with Canopy USA (expected close H1 2025) and collaboration with Wana/Jetty should enhance product/brand synergies and potentially support margin structure as distribution scales .
Balance sheet watch items: interest expense remains elevated; debt structure changed materially between Q1 and Q2 (current vs non-current mix), and warrant liability appeared in Q2; track cash, inventory, and debt mix closely .
Competitive price compression persists; brand standardization and premium offerings (Superflux live resin) aim to offset pricing pressure and improve mix .
Near-term trading: focus on signs of retail sell-through normalization and wholesale mix in NY/NJ; medium-term thesis hinges on H2 acceleration, Ohio ramp, and Canopy USA close timing .

Bolded highlights:

Gross margin rebound to 43% in Q2 from -3% in Q1 is a significant positive surprise, reflecting operational normalization and cost actions .
Ohio adult-use start with expectation to double state revenue by 2025 represents a major growth catalyst for 2025 .
Revenue down 33% YoY in Q2 underscores the impact of credit constraints; watch for evidence of restocking-driven recovery in H2 .

Acreage Holdings, Inc. (ACRHF)·Q2 2024 Earnings Summary