TerrAscend benefits from Gage revenue while waiting for New Jersey to be on the books
Tracy J. Chappelle
3 min read
TerrAscend Corp. (CSE: TER) (OTCQX: TRSSF) released its financial results for the first quarter ending March 31, 2022. The turnover for the first quarter of 2022 amounts to $49.7 million, up 1% sequentially and down 7% year-over-year. TerrAscend attributed the drop to the vape recall on the Pennsylvania company, combined with the continued intentional accumulation of inventory in New Jersey, compared to wholesale, in preparation for sales aimed at adults. The company’s Canadian operations also had a weak quarter, both sequentially and year-over-year. The declines were partially offset by three weeks of revenue from the acquisition of Gage, which closed on March 10.
The net loss for the quarter was $16.0 millionmainly due to operating loss, income taxes $3.7 millionand the financial and other expenses of $6.9 millionpartially offset by a net gain on the fair value of the warrant liability of $5.7 million.
“While first quarter revenues and margins were impacted by the industry-wide vape recall in Pennsylvania and initial operating costs in New Jersey prior to adult use, we expect revenue and margin to grow significantly in Q2 and beyond,” said CEO Jason Savage. “The strategic decisions and investments we have made over the past three years position us well for substantial growth in each of our four key markets – New Jersey, Pennsylvania, Michigan, and Maryland.”
New Jersey is getting busy
The company got very busy after the end of the quarter with its New Jersey operations. He celebrated the grand opening of adult sales on April 21thst in maple wood and Phillipsburg, New Jersey, two of twelve dispensaries currently open in the state. TerrAscend has been approved for hydrocarbon mining in New Jersey with the first products recently launched. She signed a lease for a new facility in New Jersey, which will provide extended capacity up to the 150,000 square foot canopy limit. In addition, the company received a home delivery license for medical patients in New Jersey.
Mr. Wild continued: “New Jersey sales for adult use began on April 21thst, a milestone for TerrAscend and the entire industry. Demand has been strong for our brands and high retail experience. We recently introduced the first-in-state concentrates and plan to introduce additional “first-in-state” products in the near future. In Pennsylvania, we continue to grow the highest quality flower in our history and have introduced new genetics, to which patients have responded positively. In MichiganGage has positioned us as a leader in one of the largest cannabis markets in the United States. Finally, subsequent to the end of the quarter, we announced the acquisition of a medical dispensary in Maryland and 5 dispensaries in Michigan. These acquisitions illustrate our strategy of “deepening” the markets in which we operate. While remaining focused on organic growth, the dislocation of public and private company valuations should provide attractive M&A opportunities to accelerate growth in a financially disciplined manner.
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