TerrAscend To Bring Berner's Cookies To Cannabis Shops In New Jersey, Posts $58.7M In Revenue, Withdraws Guidance

TerrAscend Corp. TER TRSSF reported its second-quarter financial results Thursday with net sales of $58.7 million, up by 72% year-over-year and 10% sequentially. The New York and Toronto-based cannabis company also announced the signing of an agreement with Berner's Cookies, one of the country's most recognized and highest-grossing lifestyle brands, to bring its products to cannabis shops in New Jersey.

Second Quarter 2021 Financial Highlights

• Adjusted Gross Profit Margin of 61% compared to 56% in Q2 2020 and 65% in Q1 2021.
• Adjusted EBITDA of $24.3 million compared to $8.4 million in Q2 2020 and $22.6 million in Q1 2021.
• Adjusted EBITDA margin of 41% compared to 25% in Q2 2020 and 42% in Q1 2021.
• Cash Flow from Operations was positive for the third consecutive quarter.
• Cash balance of $154 million at quarter-end to support future growth initiatives.

"During the second quarter, we continued to deliver year-over-year and sequential revenue growth while maintaining industry-leading Adjusted EBITDA margins above 40%,” Jason Wild, executive chairman of TerrAscend stated. “Due to expansion related yield reduction in Pennsylvania, which I believe to be temporary, and a decision to prioritize allocation of our branded products to our own New Jersey dispensaries, I felt it was appropriate to withdraw guidance for 2021.  Looking ahead, 2022 will be a breakout year as we benefit from investment in cultivation capacity expansions and best-in-class retail experiences. “

2021 Outlook

The Company is withdrawing 2021 financial guidance primarily due to:

• Temporary reduction in yields of quality cannabis flower caused by ongoing construction and expansion in Pennsylvania. 
• Decision to increase allocation of the Company's branded products to its own Apothecarium cannabis shops in New Jersey. 

Teaming Up With Cookies

TerrAscend and Cookies entered into a multi-year deal under which TerrAscend will be the sole cultivator and manufacturer of Cookies branded products in New Jersey, subject to certain conditions and regulatory approval. TerrAscend operates a 140,000 square foot cultivation and processing facility in The Garden State.

Under the licensing agreements, Cookies will also have a “Cookies Corner” - a store-within-a-store concept - at all of TerrAscend’s Apothecarium Alternative Treatment Centers in New Jersey. The licensing agreements are subject to regulatory approval.

"We are excited to announce our agreement with COOKIES to be the sole cultivator and manufacturer in New Jersey for one of the country's most recognized cannabis brands and the planned opening of 'COOKIES Corners', a store-in-store concept, within each of our three retail locations, subject to certain conditions and regulatory approval,” Wild said. “New Jersey is an important market for us and this agreement with COOKIES will enable us to further solidify our leading position as the state is expected to implement adult-use by the end of this year.”

Welcome To The Garden State, Home Of The Sopranos

Berner, co-founder and CEO of Cookies, added that the company is thrilled to expand to the East Coast and to reach such an important market as New Jersey.

“In addition to our staple flavors, we have been working with TerrAscend on a unique Cookies menu that will only be offered in New Jersey,” Berner said. “Add that to the first Cookies retail experience, located in the shadow of the famous 'Bada Bing' from The Sopranos, this launch is going to be epic on every level!”

Price Action

TerrAscend’s shares were trading 1.80% higher at $8.43 per share at the time of writing Thursday morning.

Photo: Courtesy of TerrAscend