Acreage Holdings Inc., a multi-state cannabis operator recently acquired by Canadian cannabis giant Canopy Growth, has agreed to pay $225,000 to settle administrative claims from the U.S. Securities and Exchange Commission (SEC) regarding a $4.2 million round-trip transaction aimed at inflating its reported cash balance.
The SEC alleged that in December 2019 and January 2020, Acreage orchestrated a transfer of cash to and from an affiliated entity, inflating its year-end cash balance for internal accounting purposes. The SEC stated that the company arranged the transaction with the explicit understanding that the money would be returned after the fiscal year concluded.
According to the SEC, Acreage falsely recorded the round-trip transaction in its accounting records, initially labeling it as a debt repayment and later as a short-term loan. The company eventually reversed the transaction after internal concerns were raised. Acreage also misrepresented the cash transfers to its external auditor.
