TerrAscend To Benefit From M&A Activity, Reports Strong Q1 Results, 106% YoY Increase In Net Sales, Strong Cash Balance

TerrAscend Corp. TER TRSSF reported Wednesday its financial results for the first quarter of 2021, highlighting a substantial cash balance of $234 million.

In the first three months of the fiscal year, net sales amounted to $53.4 million, up by 106% year-over-year.

The North American cannabis company also raised its full-year 2021 guidance for net sales to over $300 million while expecting adjusted EBITDA to exceed $128 million.

"I'm pleased with the strong results our team has delivered to begin the year," said TerrAscend executive chairman Jason Wild, highlighting strong revenue growth, margin expansion and cash generation over the period.

Q1 2021 Financial Highlights

• Adjusted gross profit margin (non-IFRS measure, calculated before the impact from biological assets) rose to 65% versus 45% in the corresponding quarter of 2020.
• Positive adjusted EBITDA of $22.6 million, compared to a $3.7 million gain in the same period of last year.
• The adjusted EBITDA margin (non-IFRS measure) was 42% compared to 14% in the first quarter of the prior year.
• Cash flow from operations amounted to $13.3 million versus a $0.8 million loss in the same period of 2020.
• Net loss totaled $12.7 million, compared to $87.8 million in the prior quarter and $800,000 in the first quarter of last year.
• General and administrative expenses amounted to $15.8 million, accounting for 30% of net sales.

2021 Moves

In January, TerrAscend obtained a permit from the New Jersey Department of Health to grow medical cannabis and also secured some $175 million in financing through an oversubscribed non-brokered private placement.

The company also reported completing the construction of its cultivation and manufacturing facility in Boonton, New Jersey.

In addition, TerrAscend opted to expand its retail footprint in Northeast Pennsylvania in April by acquiring three Keystone Canna Remedies stores for $63 million.

Earlier this month, the company closed the $27.5 million acquisition of Curaleaf Holdings, Inc's CURA CURLF Maryland-based cannabis grower and processor, MS Health, LLC and HMS Processing, LLC, ahead of launching its second New Jersey medical cannabis dispensary in Maplewood.

Price Action

TerrAscend’s shares were trading 2.73% higher at $11.65 per share at the time of writing.

Photo by Jhon David on Unsplash