TerrAscend Cannabis Wraps Up $140M Debt Financing, 'No Other Material Debt Maturing' Until 2027, Says Exec Chairman

TerrAscend Corp. TSND TSNDF announced on Friday that together with certain entities that are consolidated by the company, it has closed on a senior secured term loan for gross proceeds of $140 million from funds managed by FocusGrowth Asset Management, LP.

Read Also: Cannabis Company TerrAscend Posts Q1 2024 Gains In Revenue And Operational Efficiency

What Happened

The loan includes an initial draw of $114 million in gross proceeds by certain of the company's consolidated entities in Pennsylvania, Maryland and California, with a second draw of $26 million in gross proceeds expected in September 2024 by the company's consolidated entities in Michigan.

The loan carries an interest rate of 12.75%, maturing in August 2028, while containing no prepayment penalties, and is guaranteed by the company and TerrAscend USA, Inc. No warrants were issued as part of the loan.

Why It Matters

Proceeds from the initial draw were used to retire TerrAscend's existing indebtedness in Pennsylvania with the remainder available for potential M&A transactions focused on geographic expansion.

The proceeds from the second draw will be used to retire the company's existing indebtedness in Michigan.

"Completing this non-dilutive financing strengthens our balance sheet and provides us the financial flexibility to continue executing our growth strategy," said Jason Wild, executive chairman of TerrAscend. "With this financing closed, we have no other material debt maturing until late 2027. This transaction also reflects our lender's confidence in our vision and strategy. The FocusGrowth team has been a pleasure to work with and we look forward to a long and successful partnership together."

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TSNDF Price Action

TerrAscend's shares traded 3.62% lower at $1.33 per share at the time of writing on Friday morning.