Acreage Holdings, Inc. (the “Company” or “Acreage”) (CSE: ACRG.A.U, ACRG.B.U) (OTCQX: ACRDF, ACRHF) today announced it filed restated unaudited interim financial statements for the three and nine month periods ended September 30, 2020 (the “Restated Interim Financial Statements”) and corresponding amended management’s discussion and analysis.
The Company filed interim financial statements for the three and nine month periods ended September 30, 2020 on Form 10-Q (the “10-Q”) with the Securities and Exchange Commission on December 18, 2020. Certain items were identified in the context of preparing the 10-Q that required a restatement of the Company’s previously-issued unaudited interim financial statements for the three and nine month periods ended September 30, 2020 (the “Initial Interim Financial Statements”).In the context of preparing the 10-Q, it was determined that a contingent liability that had not been resolved at the time of filing the Initial Interim Financial Statements was subsequently determined and therefore has now been recognized within the Company’s financial results as an increase to Losses from Legal Settlements within Operating Expenses. The recognition of this liability resulted in a US$6.0 million increase to total net loss, consisting of a US$1.2 million increase to net loss attributable to non-controlling interests and a US$4.8 million increase to net loss attributable to the Company for both the three month and nine-month periods ended September 30, 2020, along with corresponding increases to accrued liabilities. It was also determined that additional losses from legal settlements totaling approximately $8.2 million should be included within Operating Expenses as part of Losses from Legal Settlements, rather than as a component of Other Loss, Net. This change in financial presentation had no impact on the net loss of the Company that had been previously reported in the Initial Statements. Details of the foregoing transactions are further described in Note 13 to the Restated Interim Financial Statements.
The Restated Interim Financial Statements and corresponding amended management’s discussion and analysis are available on SEDAR at www.sedar.com. The Restated Interim Financial Statements and corresponding amended management’s discussion and analysis replace and supersede, in entirety, the respective previously-filed Initial Interim Financial Statements and accompanying management’s discussion and analysis for the three and nine month periods ended September 30, 2020 together with the Company’s press release dated November 11, 2020 reporting its financial results for quarter then ended (collectively, the “Previous Documents”). The Previous Documents should no longer be relied upon.
ABOUT ACREAGE
Headquartered in New York City, Acreage is a multi-state operator of cannabis cultivation and retailing facilities in the U.S., including the company’s national retail store brand, The Botanist. Acreage’s wide range of national and regionally available cannabis products include the award-winning Botanist brand, the highly recognizable Tweed brand, the Prime medical brand in Pennsylvania, the Innocent edibles brand in Illinois and others. Acreage also owns Universal Hemp, LLC, a hemp subsidiary dedicated to the distribution, marketing and sale of CBD products throughout the U.S. Since its founding in 2011, Acreage has focused on building and scaling operations to create a seamless, consumer-focused, branded experience. More information is available at www.acreageholdings.com.
On June 27, 2019, Acreage implemented an arrangement under section 288 of the Business Corporations Act (British Columbia) with Canopy Growth Corporation (“Canopy Growth”), which was subsequently amended on September 23, 2020 (the “Amended Arrangement”). Pursuant to the Amended Arrangement, upon the occurrence (or waiver by Canopy Growth) of changes in federal laws in the United States to permit the general cultivation, distribution and possession of marijuana (as defined in the relevant legislation) or to remove the regulation of such activities from the federal laws of the United States (the “Triggering Event”), Canopy Growth will, subject to the satisfaction or waiver of certain closing conditions, acquire all of the issued and outstanding Class E subordinate voting shares (the “Fixed Shares”) on the basis of 0.3048 of a Canopy Growth share per Fixed Share (following the automatic conversion of the Class F multiple voting shares and subject to adjustment in accordance with the terms of the arrangement agreement entered into between Acreage and Canopy Growth on April 18, 2019, as amended on May 15, 2019 and on September 23, 2020.
In addition, Canopy Growth holds an option, exercisable at the discretion of Canopy Growth, to acquire all of the issued and outstanding Class D subordinate voting shares (the “Floating Shares”) at the time that Canopy Growth acquires the Fixed Shares, for cash or Canopy Growth shares, as Canopy Growth may determine, at a price per Floating Share based upon the 30-day volume-weighted average trading price of the Floating Shares on the CSE relative to the trading price of the Canopy Growth shares at the time of the occurrence or waiver of the Triggering Event, subject to a minimum price of US$6.41 per Floating Share.
For more information about the Amended Arrangement please see the Acreage proxy statement and management information circular dated August 17, 2020 (the “Circular”) and the respective information circulars of each of Acreage and Canopy Growth dated May 17, 2019, which are available on Acreage’s and Canopy Growth’s respective profiles on SEDAR at www.sedar.com and filed with the SEC on the EDGAR website at www.sec.gov. For additional information regarding Canopy Growth, please see Canopy Growth’s profile on SEDAR at www.sedar.com.
