TerrAscend Closer To Gage Cannabis Acquisition, Receives Michigan Pre-Qualification Approval

Cannabis company TerrAscend Corp. TER TRSSF is a step closer to wrapping up Gage Growth Corp's GAGE GAEGF previously announced acquisition.

What Happened?

Based in New York and Toronto, the company said Friday that it has received prequalification approval for cultivation, processing and retail licenses from the state of Michigan's Marijuana Regulatory Agency pursuant to the Medical Marihuana Facilities Licensing Act.

This approval represents the finalization of the company's most comprehensive portion of the licensing and regulatory approval process in the Great Lake State, as well as the key closing condition for the acquisition of Gage.

Why It Matters?

"Our prequalification is an important step as we progress towards closing the acquisition of Gage in a timely manner," Jason Wild, executive chairman of TerrAscend, disclosed. "Upon closing, our combined company will bring together strong cultivation, processing capabilities, brands, and retail networks to execute on the significant opportunities ahead."

TerrAscend And Gage Deal Details

Earlier this month, the companies revealed their plan to merge in an all-stock deal worth $545 million.

Under the terms of the agreement, TerrAscend will acquire all of the issued and outstanding subordinate voting shares of Gage. In return, Gage shareholders will receive 0.3001 of a common share of TerrAscend for each Gage share held.

The combined business will operate across five states and Canada, including seven cultivation and processing facilities and 23 operating dispensaries, following the transaction's closing, which is pending shareholder, court and other regulatory approvals.

"The acquisition of Gage expands our footprint to the third-largest cannabis market in the U.S.," Wild said, adding that they are looking forward to "leveraging Gage's profound connection with Michigan's consumers, in addition to its established partnerships with award-winning brands like COOKIES, to provide our patients and customers with best-in-class product offerings and retail experiences."

Price Action

TerrAscend shares traded 0.76% higher at $7.24 per share after market close on Thursday.

Photo: Courtesy of Esteban Lopez on Unsplash