Acreage Stock Forecast
To many marijuana stock investors, Acreage Holdings Inc (OTCMKTS:ACRZF, CSE:ACRG.U) may not seem like a familiar name. That’s because Acreage stock has only been trading for less than two weeks. Still, its share price performance has been nothing short of impressive.
And now there’s a new reason to take a look at this pot stock. For investors searching for the Acreage stock forecast, here’s what you need to know.
Acreage Holdings went public through a reverse takeover. The stock made its debut on the Canadian Securities Exchange (CSE) on November 15.
Given the serious pullback in North America’s stock markets recently, you might think it wasn’t the best time to do that. Yet, since Acreage Holdings began trading on the CSE, its price has surged more than 20%.
Going forward, there are plenty of reasons to like Acreage Holdings stock. One of those reasons is the company’s expansion strategy in Michigan.
You see, Canada—the country where Acreage stock is listed—legalized recreational marijuana for adult use on October 17. But in the U.S., marijuana is still restricted on the federal level.
That means cannabis companies that want to legally expand their operations in the U.S. have to break into the market on a state-by-state basis. In fact, due to the inconsistency of the marijuana laws across different states, it’s not unusual to see a marijuana company focus on operating in just a single state.
And that’s where Acreage Holdings stands out. The company has operating licenses in 18 states with an aggregate population of more than 165 million.
Blue Tire Holdings Acquisition
On November 26, Acreage Holdings announced that it would acquire the real estate assets of Blue Tire Holdings, LLC, which is based in Michigan. (Source: “Acreage Holdings Acquires Blue Tire Holdings To Bring Safe, Predictable Cannabis, Products to Michigan,” Acreage Holdings Inc, November 26, 2018.)
Blue Tire has built a portfolio of real estate assets in Michigan over the past several years. These assets include a 55,000-square-foot facility in Flint, which could serve as a large-scale mixed-use indoor facility for growing, packaging, and retailing cannabis products.
With the help of Acreage Holdings, Blue Tire’s property portfolio could become the base for constructing a large vertical operation in Michigan. The two companies plan to start dispensary operations in key cities in the state, including Ann Arbor, Battle Creek, Bay City, Detroit, and Lansing.
“Acreage will invest significant financial capital in Michigan to build out existing operations and hopes to acquire additional dispensary operations over the next few years,” said the company. (Source: Ibid.)
Michigan Marijuana Legalization
At first glance, the Acreage/Blue Tire deal could mark Acreage Holdings’ foray into the Michigan medical marijuana market. But due to the results of the midterm elections, the state could represent an even bigger opportunity for this marijuana company.
You see, Michigan Proposal 1, which would legalize recreational marijuana for adults 21 and older, was approved by voters on November 6 by a margin of about 56% to 44%. The State Board of Canvassers have set the official legalization date as December 6. (Source: “Michigan’s marijuana use law set to take effect Dec. 6,” The Detroit News, November 26, 2018.)
High-Profile Board Members
Another thing to note about Acreage Holdings is its high-profile board of directors. The company’s board includes Canada’s former Prime Minister Brian Mulroney, former Massachusetts Governor Bill Weld, and former U.S. House Speaker John Boehner.
Marijuana legalization is still an ongoing process in the U.S., and having these political insiders on its board could help Acreage Holdings navigate the uncertainties facing the industry.
Acreage Holdings Stock Chart
Chart courtesy of StockCharts.com
Because Acreage Holdings stock has only been trading for a short time period, it is yet to release its financial results. But based on what Acreage Holdings has been doing, the company has a solid expansion strategy in place.
And if things work out as planned, my Acreage stock forecast is that it could see some further upside.