Mr. Dennis Curran reports

ACREAGE REPORTS FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL RESULTS

Acreage Holdings Inc. has released its financial results for the fourth quarter and full year ended Dec. 31, 2023.

Fourth quarter 2023 financial highlights:

• Consolidated revenue of $52.8-million;
• Gross margin was 32 per cent; excluding the impact of non-cash inventory adjustments, Q4 2023 adjusted gross margin was 33 per cent;
• Net loss for Q4 2023 was $35.7-million;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $4.3-million, and adjusted EBITDA as a percentage of consolidated revenue was 8 per cent.

Full-year 2023 financial highlights:

• Full-year consolidated revenue of $223.4-million compared with $237.1-million in full-year 2022;
• Full-year adjusted EBITDA was $28.3-million compared with $34.8-million in full-year 2022; adjusted EBITDA as a percentage of consolidated revenue was 13 per cent for full-year 2023.

Fourth quarter operational highlights:

• Launched Superflux in New Jersey, the fourth state in which the craft cannabis brand is available, following Ohio, Massachusetts and Illinois; following the initial rollout of limited-edition, small-batch flower selections, consumers in the state have access to the full Superflux product line, including its award-winning concentrates;
• Deepened operations in New Jersey with the completion of the Egg Harbor facility expansion; the cultivation and processing upgrades, which included expanded canopy, the addition of an edibles kitchen, and extraction technology upgrades, will support demand for wholesale and retail products and enable the further expansion of Acreage's flagship brands throughout the state; in its first month of operation as an expanded facility, productivity per plant was doubled;
• Debuted The Botanist line of tetrahydrocannabinol-infused gummies in the New York market, expanding the brand's product offering in the state to include all its available form factors, including flower, prerolls, vapes, tinctures and extracts; earlier this year, The Botanist expanded its selection of gummies in New York with the launch of fast-acting and extrahigh-potency gummies, respectively, in a variety of flavours and ratios;
• Upgraded the cultivation facility in Freeport, Ill., enabling Acreage to be one of few operators in the state to produce some of the highest-quality, non-remediated whole flower.

Recent developments:

• Entered the New York adult-use wholesale market with The Botanist's full product menu available for wholesale purchase to eligible adult-use dispensaries across the state; in the coming months, Acreage intends to expand its wholesale offering with the launch of new products;
• Expanded availability of The Botanist product portfolio to nearly all states within the company's footprint as of January, 2024, including Illinois, Maine, Massachusetts, New Jersey, New York, Ohio and Pennsylvania;
• Broadened footprint in Connecticut with the relocation of Acreage's third dispensary to the town of Vernon, making it the first cannabis storefront in the borough; The Botanist Vernon became a hybrid dispensary in the first quarter of 2024, and is serving both patients and adult-use consumers.

Management commentary

"Throughout 2023, we completed various strategic initiatives that have positioned us strongly ahead of our acquisition by Canopy USA," said Dennis Curran, chief executive officer of Acreage. "During the quarter, we completed the anticipated expansion of our Egg Harbor, N.J., facility, bolstering these operations with more canopy and manufacturing equipment to increase output of in-demand, high-margin products such as edibles and concentrates. We also upgraded our cultivation capabilities in Freeport, Ill., where we produce non-remediated flower, a unique and top-selling offering to the market. Our flagship brands continue to perform exceptionally well, particularly in new states where they have recently made their debut, such as New Jersey for Superflux and New York and Pennsylvania for The Botanist. This has prompted us to optimize our portfolio and focus on expanding distribution of our most successful products and brands that will cohesively fit into Canopy USA's ecosystem alongside Wana and Jetty."

Mr. Curran continued: "Following the quarter, we achieved a major milestone through our long-awaited entry into New York's adult-use wholesale market. I am incredibly proud of our team and the countless hours of hard work and dedication they put into making this a reality for Acreage. In Connecticut, we expanded our retail footprint with the relocation of our third dispensary to Vernon, which is now operating as a hybrid storefront, serving both patients and adult-use consumers. We firmly believe we have built one of the strongest northeastern footprints, and our robust presence in states such as New York, New Jersey and Connecticut will continue to grow our topline as we deepen our presence in these developing markets in anticipation of our entry into Canopy USA."

About Acreage Holdings Inc.

Acreage is a multistate operator of cannabis cultivation and retailing facilities in the United States, including the company's national retail store brand, The Botanist. With its principal address in New York, Acreage has a wide range of national and regionally available cannabis products that include the award-winning brands The Botanist and Superflux. Since its founding in 2011, Acreage has focused on building and scaling operations to create a seamless, consumer-focused, branded experience.

We seek Safe Harbor.