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Acreage Holdings Inc. (CSE: ACRG.A.U, ACRG.B.U) (OTCQX: ACRHF, ACRDF) reported wider losses in the third quarter as the multi-state cannabis operator wrestles with competitive pressures ahead of its planned acquisition by Canopy USA.

The New York-based company posted a net loss of $22.2 million for the quarter ending Sept. 30, versus a loss of $7.9 million a year earlier. Revenue fell 30% to $39.6 million from $56.5 million, though it increased 2% from the previous quarter.

The results come off the heel of Acreage launching adult-use cannabis sales in Ohio, where initial recreational revenue accounted for 38% of total state-level sales in the third quarter. The company operates five dispensaries in the state under The Botanist brand in Akron, Canton, Cleveland, Wickliffe and Columbus.

“With our strengthened financial position, we have bolstered our capacity to pursue opportunities in these markets as they continue to mature,” CEO Dennis Curran said in a statement. “The Ohio market presents an incredible growth opportunity for us, based on our solid reputation as a trusted medical provider and strong operational foundation already in place.”

The company’s planned acquisition by Canopy USA, LLC remains on track to close no later than the first half of 2025, executives said. The deal would bring Acreage under the same umbrella as cannabis brands Jetty and Wana.

Canopy Growth Corp. (TSX: WEED) (Nasdaq: CGC) CEO David Klein said last week the Canopy USA team is “focused on execution at Acreage” with a strategy centered on “deeper, not wider” market penetration.

“(We want to) get better in the markets that we’re in and use the production assets that we have at Acreage to bolster the other parts of the portfolio, meaning Wana and Jetty,” Klein said during Canopy’s earnings call on November 8.

Acreage secured additional funding during the quarter through an amended credit agreement that provided approximately $8 million in net proceeds. The deal included a $65 million advance from a new lender with an original issue discount of 10%, or $6.5 million. About $48 million was used to repay existing debt.

The company carried $274.6 million in total debt as of Sept. 30, with nearly all of it classified as long-term obligations, according to financials. Total liabilities of $419.3 million exceeded assets of $293.1 million, resulting in a $126.1 million deficit. The new credit agreement carries a 13.5% annual interest rate and matures in September 2027.

Gross margin declined to 35% from 38% a year earlier, which the company attributed to increased costs for inventory inputs and industry-wide price compression. Operating expenses fell 5% to $22.6 million.

The company expects to open its relocated New Jersey dispensary in Collingswood for medical and adult-use sales in the fourth quarter, pending final regulatory approval. The new location will be the borough’s first cannabis retailer.