Acreage Holdings Cashes-Up On Largest Private Funding Raise in U.S. Cannabis History

Benjamin A. Smith
|

Acreage Holdings—one of the United States’ largest vertically integrated multi-state cannabis operators—announced a significant milestone today. The late stage Canadian Securities Exchange applicant disclosed that it has just closed the biggest private financing round ever for an American-based cannabis operator. At some point this fall, average investors will have an opportunity to partake in the action.

All told, Acreage Holdings secured $119 million of capital and concurrently completed the rollup of control positions in several U.S. states. The company plans on using the proceeds to prepare itself for its impending public listing on Canada’s CSE, which is fast transforming itself into the world’s foremost junior cannabis exchange. Of the exchange’s 360-odd total listings, almost a quarter are cannabis-related.

Including this latest round, Acreage has raised about $225 million in invested capital thus far. Thus, owing to immense current sales and operational scale, Acreage Holdings should easily supplant TerrAscent Corp. (around $400 non-diluted) as the largest market capitalization cannabis company on the CSE post-listing. By exactly how much remains to be seen, but it should be in multiples of “X”.

Acreage Holdings CEO Kevin Murphy talks about the importance of John Boehner joining the Board and other company musings

One of the main attributes separating Acreage Holdings from the pack is their current revenue generating ability. According to the Green Market Report, CEO Kevin Murphy estimated his company would do “$130 million in revenue in 2018 and projects that will rise to $3 billion by 2020.”

In comparison, the largest cannabis company by market cap in the world, Canopy Growth Corp., generated about $77.9 million of annual revenues as per their last earnings release. Aurora Cannabis—the world’s second largest cannabis company  by market cap—generated around $36 million CAD in revenue in the nine months ended March 31st 2018, according to their latest interim financial statements.

So although we don’t have intricate details of Acreage Holdings financials yet (they are a private and non-exchange listed entity), we imagine its balance sheet is quite impressive. The company also boasts a powerful roster of advisers, lead by former House Speaker John Boehner and Bill Weld, the former Republican governor of Massachusetts.

We look forward to covering the company in closer detail as further financial and operating information is disclosed.

Benjamin A. Smith

Benjamin A. Smith

Ben is a research analyst and capital markets professional with nearly 20 years of experience. His areas of expertise are broad-based, and include extensive knowledge of macro economics, stock/derivative trading, commodity complexes, cryptocurrencies and technical/quant analysis. He also maintains an particular affinity for U.S. politics and the macro-regulatory environment facing...
More Info...

[email protected] |

Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

Free Newsletter,
Priceless Content.

Be the first to hear from Midas Letter on all things Cannabis.