Acreage Holdings: Significant Arbitrage Opportunity If US Legalizes Says Analyst

Vertically integrated company Acreage Holdings, Inc.(OTC: ACRDF) reported its unaudited financial results Wednesday for the third quarter of 2021, revealing a consolidated revenue of $48.2 million, representing an increase of 52% year-over-year and 9% sequentially.

"At the beginning of fiscal 2021, we introduced a refreshed strategy focused on our key priorities, which include delivering improved financial results and generating shareholder value," Peter Caldini, the company's CEO said.

The Analyst

In his latest note, Cantor Fitzgerald's analyst Pablo Zuanic said that under Caldini’s management, Acreage became a more disciplined and focused operation; focused on “improving profit margins”, and “accelerating growth in Acreage’s core markets”.

Cantor remains Neutral with no changes in their price target for ACRDF at $1.92 per share.

The Thesis

The analyst noted that gross margins fell 460bps seq (to ~49%) partly due to supply issues in NJ and the ramp-up of new facilities (edibles in MA). Sales including MSA revenues (combined revenues, i.e., the sum of consolidated sales and MSAs) grew by 5% seq to $64.2 …

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