Cannabis company TerrAscend Corp. TER TRSSF wrapped up the acquisition of an additional 12.5% of the issued and outstanding equity of TerrAscend NJ, LLC from BWH NJ, LLC and Blue Marble Ventures, LLC.
The move comes on the heels of announcing an agreement with Berner's Cookies to bring its products to cannabis shops in New Jersey.
In return, the New York and Toronto-based company said Friday that it agreed to pay $25 million in cash and an additional $25 million in the combination of cash and its common shares before the year-end.
Currently, TerrAscend owns 87.5% of the issued and outstanding equity of TerrAscend New Jersey.
"I am thrilled to increase our stake in TerrAscend New Jersey ahead of the commencement of adult-use sales," Jason Wild, executive chairman of TerrAscend, said.
In addition, the company can buy an additional 6.25% stake in TerrAscend New Jersey at a pre-determined valuation during the period starting April 1, 2023, through June 15, 2023.
TerrAscend New Jersey operates a 140,000 sq. ft cultivation and processing facility located in Boonton, as well as two Alternative Treatment Centers or dispensaries located in Maplewood and Philipsburg. It plans to launch a third ATC in the high-traffic town of Lodi in the vicinity of New York City in 2021.
"We are focused on exceeding New Jersey customers' expectations and are well-positioned with our Cookies brand partnership and new Lodi dispensary set to open before year-end," Wild added.
Q2 Revenue And Guidance Withdrawal
The company withdrew the financial guidance for 2021 due to "expansion related yield reduction in Pennsylvania, which I believe to be temporary, and a decision to prioritize the allocation of our branded products to our own New Jersey dispensaries," Wild explained.
TerrAscend also reported that its net sales totaled $58.7 million in the second quarter of 2021, up by 72% year-over-year and 10% sequentially.
Price Action
TerrAscend's stock traded 3.93% lower at $7.11 per share at the time of writing on Friday morning.
Photo: Courtesy of Avery Meeker on Unsplash
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