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ACREAGE HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
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Commission File Number: 000-56021
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British Columbia, Canada
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98-1463868
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(State or other jurisdiction of incorporation)
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(IRS Employer Identification No.)
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366 MADISON AVENUE, 11TH FLOOR
NEW YORK, NEW YORK, 10017, UNITED STATES
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(Address of principal executive offices, including zip code)
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(646) 600-9181
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(Registrant’s telephone number, including area code)
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Subordinate Voting Shares, no par value
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ACRGF
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OTC Markets Group Inc.
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Item 2.02
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Results of Operations and Financial Condition.
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Item 9.01
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Financial Statements and Exhibits.
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ACREAGE HOLDINGS, INC.
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Date: February 26, 2020
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/s/ Glen Leibowitz
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Glen Leibowitz
Chief Financial Officer
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•
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Reported fourth quarter revenue of $21.1 million and full year 2019 revenue of $74.1 million, a 101% and 251% increase, respectively, compared to the same periods in 2018
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•
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Pro forma revenue* for the fourth quarter and full year 2019 was $43.6 million and $155.5 million, respectively, a 90% and 101% increase compared to the same periods in 2018
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•
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Reported a net loss attributable to Acreage of $50.6 million and $150.3 million for the fourth quarter and full year 2019, respectively
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•
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Adjusted net loss* attributable to Acreage was $14.6 million and $50.6 million for the fourth quarter and full year 2019, respectively
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•
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Pro forma adjusted EBITDA* was a loss of $15.8 million and $44.4 million for the fourth quarter and full year 2019, respectively
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•
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Build out 10 to 15 new retail dispensaries, focused on existing footprint to scale operations as quickly as possible
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•
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Increased focus on growing our wholesale business, leading to planned wholesale revenue mix of approximately 20%
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•
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Implement general and administrative ("G&A") cost savings initiatives, leading to nearly $7 million in annualized savings, or 12% of reported G&A in 2019
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•
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Capital expenditures of $45 to $50 million, primarily for cultivation and processing facilities and dispensary buildouts
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•
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Targeting positive pro-forma adjusted EBITDA in back half of the year
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Pro forma Bridge
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|||||||||||||||||
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QTD
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YTD
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||||||||||||
US$ (thousands)
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Q4'19
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Q4'18
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FY'19
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FY'18
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||||||||
Reported Revenue
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$
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21,065
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$
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10,472
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$
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74,109
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$
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21,124
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Revenue from Entities under Management or Consulting Agreements*
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|||||||||||||||||
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New England
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4,547
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4,098
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17,300
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9,746
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Mid-Atlantic
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2,837
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1,509
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8,315
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2,490
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Midwest
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3,213
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—
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8,565
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—
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West
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532
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—
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2,155
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—
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Managed Revenue*
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$
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32,194
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$
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16,079
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$
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110,444
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$
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33,360
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Pro forma Adjustments*
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New England
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3,811
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5,266
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16,004
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37,484
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Mid-Atlantic
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—
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—
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—
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2,111
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Midwest
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—
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1,266
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670
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3,223
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West
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7,600
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323
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28,419
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1,055
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Pro forma Revenue*
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$
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43,605
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$
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22,934
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$
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155,537
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$
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77,233
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Reconciliation of GAAP to Non-GAAP Measures
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US$ (thousands, except per share amounts)
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Q4'19
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Q4'18
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FY'19
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FY'18
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Net loss (GAAP)
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$
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(65,589
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)
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$
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(29,761
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)
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$
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(195,162
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)
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$
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(32,261
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)
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Income tax expense (benefit)
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(1,136
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)
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609
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4,989
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1,536
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Interest (income) expense, net
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(209
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)
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202
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(2,784
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)
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3,439
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Depreciation and amortization
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2,280
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1,905
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7,593
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3,749
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EBITDA (non-GAAP)*
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$
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(64,654
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)
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$
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(27,045
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)
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$
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(185,364
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)
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$
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(23,537
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)
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Adjusting items:
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(Income) loss from investments, net
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1,249
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3,249
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480
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(21,777
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)
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Loss on impairment of intangible assets
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13,463
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—
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13,463
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—
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Equity-based compensation expense - Plan
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14,720
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9,862
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62,946
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9,862
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Equity-based compensation expense - Plan (CGC Awards)
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11,971
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—
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23,056
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—
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Equity-based compensation expense - other
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3,005
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34
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11,536
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1,368
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Canopy Growth transaction costs
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—
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—
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7,580
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—
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Other non-recurring expenses
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1,968
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7,109
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11,148
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15,004
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Adjusted EBITDA (non-GAAP)*
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$
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(18,278
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)
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$
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(6,791
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)
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$
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(55,155
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)
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$
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(19,080
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)
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Pro forma Bridge
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|||||||||||||||||
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QTD
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YTD
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US$ (thousands)
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Q4'19
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Q4'18
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FY'19
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FY'18
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Adjusted EBITDA*
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$
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(18,278
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)
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$
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(6,791
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)
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$
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(55,155
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)
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$
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(19,080
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)
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Managed/Pro forma Adjustments*
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New England
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1,381
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2,545
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6,824
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12,793
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Mid-Atlantic
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1,082
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(747
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)
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2,804
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(900
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)
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Midwest
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(268
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)
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(2,163
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)
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(2,306
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)
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(1,972
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)
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West
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301
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337
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3,409
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(83
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)
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Pro forma Adjusted EBITDA*
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$
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(15,782
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)
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$
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(6,819
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)
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$
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(44,424
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)
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$
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(9,242
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)
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Reconciliation of GAAP to Non-GAAP Measures
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|||||||||||||||
US$ (thousands, except per share amounts)
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Q4'19
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Q4'18
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FY'19
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FY'18
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||||||||
Net loss attributable to Acreage Holdings, Inc. (GAAP)
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$
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(50,631
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)
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$
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(25,587
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)
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$
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(150,268
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)
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$
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(27,483
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)
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Net loss per share attributable to Acreage Holdings, Inc. (GAAP)
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$
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(0.56
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)
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$
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(0.31
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)
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$
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(1.74
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)
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$
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(0.41
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)
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Adjusting items:(1)
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(Income) loss from investments, net
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$
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969
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$
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2,779
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$
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367
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$
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(20,684
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)
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Loss on impairment of intangible assets
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10,446
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—
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10,307
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—
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Equity-based compensation expense - Plan
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11,421
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8,436
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48,191
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9,367
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Equity-based compensation expense - Plan (CGC Awards)
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9,288
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—
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17,652
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—
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Equity-based compensation expense - other
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2,332
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29
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8,832
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1,299
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Canopy Growth transaction costs
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—
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—
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5,803
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—
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Other non-recurring expenses
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1,527
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6,081
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8,535
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14,251
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Total adjustments
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$
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35,983
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$
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17,325
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$
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99,687
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$
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4,233
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Adjusted net loss attributable to Acreage Holdings, Inc. (non-GAAP)*
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$
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(14,648
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)
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$
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(8,262
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)
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$
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(50,581
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)
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$
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(23,250
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)
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Adjusted net loss per share attributable to Acreage Holdings, Inc. (non-GAAP)*
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$
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(0.16
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)
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$
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(0.10
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)
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$
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(0.59
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)
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$
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(0.35
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)
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Weighted average shares outstanding - basic and diluted
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90,245
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82,736
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86,185
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66,699
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Weighted average NCI ownership %
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22.41
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%
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14.46
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%
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23.44
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%
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5.02
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%
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Media Contact:
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Investor Contact:
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Howard Schacter
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Steve West
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Vice President of Communications
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Vice President, Investor Relations
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h.schacter@acreageholdings.com
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investors@acreageholdings.com
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646-600-9181
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646-600-9181
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Robert Vanisko
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Director of Communications
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r.vanisko@acreageholdings.com
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646-600-9181
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