- Acreage Holdings eliminated 40 positions after a strategic review of the company's spending.
- The company posted disappointing fourth-quarter earnings, amid a tough market for cannabis companies.
- An Acreage spokesperson told Business Insider that the company is also hiring for a number of open roles.
- Click here for more BI Prime stories.
Multi-state cannabis company Acreage Holdings eliminated 40 positions earlier this week in a strategic reassessment of its spending, a source familiar with the matter said.
The source added that the job cuts were across the organization and not concentrated in one specific team or department. Acreage Holdings has well over 250 employees, a company spokesperson said.
Reports of the job cuts first surfaced on Twitter on Tuesday from @BettingBruiser, who posted a snippet of a memo circulated to Acreage employees. Business Insider then reviewed a full copy of the memo.
"In releasing our corporate strategic objectives, I shared with you that we would be faced with many decisions that will be straightforward, while others may be very difficult," the memo, signed by Acreage Chief Operating Officer Robert Daino reads. "Well, today we made some of those very difficult decisions as we notified a number of our colleagues across our organization that their employment has been eliminated as of today. These decisions, while difficult to communicate, were necessary."
'This is a tough day'
"This is a tough day, but the executive team and I are counting on you to come together as an integrated team, laser-focused upon our objectives, and passionate about executing with precision," the memo said.
After viewing the memo, Business Insider reached out to Acreage directly to confirm the details.
An Acreage spokesperson said the company is still hiring for a number of open positions and that the cuts were about eliminating positions that aren't necessary anymore as the company transitions from an investment fund to an operator. A search of Acreage's website revealed open listings for positions in roles including cultivation, dispensary sales, and retail operations.
"As the life cycle of our business continues to mature, we continually assess our resources against our corporate strategic objectives," Acreage Vice President of Communications Howard Schacter said in a statement. "When we conducted our last assessment we identified functions across certain departments and in our Form Factory business unit in places that are not as critical today as when they were first acquired."
Acreage is still hiring in some areas
"At the same time, we've identified strategic areas where we've decided to make new hires," Schacter said.
The company has recently made two senior-level hires, including a chief revenue officer.
Founded as High Street Capital Partners in 2014 by Kevin Murphy - who remains CEO - the company shifted its model from an investment fund to a cultivator and operator of cannabis dispensaries in states with legal medical and recreational marijuana in 2017.
Last April, Canadian cannabis giant Canopy Growth entered into a conditional agreement to purchase Acreage if, or when, federal legalization occurs in the US. According to the announced deal terms, the agreement will be terminated if in seven years a federally legal pathway to close doesn't emerge.
Acreage reported its fourth-quarter earnings on Wednesday, which include a $50.5 million loss while bringing in $21 million in revenue - well below most analyst estimates. The company attributed the losses to delays in cannabis store openings across the states it operates in a call with analysts and investors.
The stock fell after a disappointing earnings report
Cowen analyst Vivien Azer lowered her estimate for Acreage and maintained her market perform rating on the stock.
"ACRG continues to demonstrate the difficulties associated with an overly broad geographic presence which has driven the company's lower margins and bloated cost profile, though ACRG does have a proven ability to raise capital with its most recent $150 mm financing transactions," Azer wrote in a note on Wednesday.
The stock fell over 9% on Thursday.
Acreage is far from the only publicly-traded cannabis company to eliminate positions in recent months. Business Insider has identified over 2,000 layoffs across the cannabis industry since last Fall.
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