NEW YORK, April 03, 2020 (GLOBE NEWSWIRE) — PRESS RELEASE — Acreage Holdings, Inc. has announced a series of operational updates and strategic business decisions related to the significant impact of the COVID-19 pandemic and other uncontrollable factors that have greatly shifted the cannabis landscape. The moves are intended to enable the company to maintain its business goals of profitability, conserve cash and to execute its strategic plan.
Acreage’s management executed the following initiatives:
- Temporarily furloughed 122 employees across both the corporate office and field operations teams
- Temporarily closed certain operations, including: one dispensary in each of Maryland and North Dakota; wholesale operations in Iowa; and Form Factory operations in California, Oregon, and Washington
- Converted its dispensary in Queens, New York, to a delivery hub
- Terminated the securities purchase agreement among Greenleaf Compassionate Care Center, Inc., GCCC Management, LLC (GCCCM), the equity holders of GCCCM and High Street Capital Partners, LLC relating to the proposed acquisition of a dispensary in Rhode Island
Additionally, the merger agreement entered into with Deep Roots Medical, LLC, as described in the company’s April 18, 2019 press release, was terminated due to the ongoing moratorium imposed by the Nevada Department of Taxation. The delay prevented the parties from obtaining the consents, approvals and authorizations necessary to consummate the merger prior to the outside date provided in the merger agreement.
Acreage also announced the resignation of Steve Hardardt, the company’s Executive Vice President, Chief People Officer and Administration, effective immediately.
With the COVID-19 pandemic resulting in a virtual shutdown of significant parts of the United States that is expected to continue for at least the next month and possibly longer, continued construction and regulatory delays in Illinois, California, Massachusetts, Michigan and elsewhere, and in anticipation of a significant economic downturn that will have a yet-to-be-measured impact on the U.S. cannabis industry, the company re-evaluated its business plan and determined its most prudent path toward profitability.
As a result of today’s decisions, the company is suspending its previous 2020 financial targets. The company will provide a more detailed update on its first quarter earnings call tentatively scheduled for May 13, 2020.
“Although we are facing difficult times, I remain optimistic about the U.S. cannabis industry and Acreage in particular,” said Acreage Chair and Chief Executive Officer Kevin Murphy. “But as a result of the COVID-19 pandemic, we have made the very difficult decision to furlough several of our employees and close certain facilities while we navigate through the crisis. Additionally, we withdrew from certain agreements with Deep Roots and Greenleaf as circumstances have materially changed. These bold measures will help to ensure that we emerge from this very challenging situation stronger than ever before. »