Acreage Holdings Inc. (CSE: ACRG.A.U, ACRG.B.U) (OTCQX: ACRHF, ACRDF) reported its third-quarter financial results, revealing a mixed performance on a revenue dip.
The company, which has been preparing to be absorbed by Canopy USA, the American arm of Canadian producer Canopy Growth, reported a slight decline in consolidated revenue, marking $56.5 million, an 8% fall from the previous year.
Acreage’s gross margin stood at 38%, a figure that would rise to 41% excluding non-cash inventory adjustments. However, the company faced a net loss of $7.9 million during the quarter, which was still better than the $25 million net loss in the same period last year.
Overall, the company saw a big rise in sales in Connecticut, with a year-over-year growth of 27%. The Botanist Danbury, one of its stores in Connecticut, recorded a 64% sales increase. Similarly, in New Jersey, the company experienced a 34% rise in sales compared to the same period last year, signaling strong market performance in these states.
“The playbook we have created from our experiences launching adult-use sales in Connecticut and New Jersey will benefit us greatly as our other core markets begin to adopt adult-use regulations,” CEO Dennis Curran, , who took the reins in July after a C-suite shuffle, said in a statement.
“With the adult-use market finally beginning to open in New York, and the recent vote for adult-use legalization in Ohio, we are readying our operations for increased output and innovation to continue differentiating our offering in anticipation of the long-term growth potential these markets offer.
Strategic initiatives marked the quarter for Acreage, with the company making headway in its expansion and product diversification efforts. That included starting construction on a new dispensary in Connecticut and nearing completion of a an infrastructure project in New Jersey. The company also introduced its Superflux brand in New Jersey and new product launches in New York and Illinois.
The year-over-year revenue decrease was primarily attributed to market price compression, though partially offset by revenue growth in New Jersey and Connecticut. Acreage also achieved a notable 37% reduction in total operating expenses, mainly due to lower general and administrative costs.