TerrAscend Expands into Maryland
On July 1st, Maryland opened up its doors to adult-use cannabis sales. The day before that happened, TerrAscend (TRSSF) announced that it entered into a definitive agreement to acquire Herbiculture, a medical dispensary in Maryland. With this transaction, TerrAscendwill reaches the four dispensaries cap in the state. TerrAscend will acquire Herbiculture for total consideration of $8.25M, composed of $3.0M in cash, with the remainder in a seller’s note. Herbiculture has a loyal customer base and a net revenue run rate of approximately $4.3M. “Adding a fourth dispensary in Maryland is an important step in our strategy to become a market leader in the state. We anticipate that Herbiculture, combined with our other Maryland dispensaries, will drive substantial revenue growth and profitability,” said Jason Wild, Executive Chairman of TerrAscend. “We look forward to serving more consumers in Maryland with the start of adult-use sales in this state, and intend to utilize the same successful strategy and business model that we built in New Jersey.”
Another week, another lay off announced.
Tantalus Labs, a Canadian cannabis producer based out of British Columbia, confirmed it has filed a Notice of Intent for Restructuring in Canadian federal court. “This filing comes with the difficult reality of laying off the substantial majority of our team, retaining only a few key employees to navigate the complexity of this restructuring process,” CEO Dan Sutton said in the email. Sutton said the company is initiating “the process of restructuring with the mission to find a path forward for our brand and winning products to continue to deliver value to customers and distributors nationwide.” It is expected that they will have to lay off a large number of their 1,400 employees in the coming weeks to months. “Despite continued market success by firms like Tantalus,” he added, “the regulatory and taxation environment is persistently so burdensome that even today, five years into recreational legalization, free cash flow in the Canadian cannabis industry remains systemically challenged.”
TerrAscend pays down the loan.
TerrAscend (TRSSF) announced on Friday that its subsidiary, WDB Holding PA, Inc., has completed the paydown of $37 million of its senior secured term loan in Pennsylvania, which bears a fixed interest rate of 12.875%. 12.879%!!!!!!! The paydown reduces the Loan outstanding in Pennsylvania to $78 million and reduces annual interest expense by $4.8 million. “All of the critical steps we have taken recently, including the sale of our facility in Canada, the closing of a lower-interest bank loan with Stearns Bank, and the completed private placements, align with our strategy to reduce debt, lower interest expense, and continue to drive positive cash flow from operations,” said Jason Wild, Executive Chairman of TerrAscend. “We made a concerted effort as a team twelve months ago to transform our balance sheet. Since then, we have reduced our debt and interest expense by over 40%. We expect the increased liquidity from our upcoming TSX Listing should help to further decrease our cost of capital going forward.”
