TerrAscend Corp. (OTCQX: TRSSF) reported financial results for its fourth quarter and year ending December 31, 2020. Net sales for TerrAscend increased 152% to $65 million in the fourth quarter of 2020, as compared to $26 million in the fourth quarter of 2019. Net sales increased 28% sequentially. The net loss for the fourth quarter of 2020 was $109 million, largely impacted by a net increase in fair value of warrant and derivative liability of $124 million and a revaluation of contingent consideration of $5 million.
For the full year of 2020, the company reported net sales of %198.3 million versus 2019’s net income of $84.9 million. The net loss was trimmed to $154 million for 2020 versus 2019’s net loss of $219 million. TerrAscend said it continued to expand organically through an increase in cultivation capacity in Pennsylvania and California, the first sales into the New Jersey market, the continued growth and ramp-up at its three retail stores in Pennsylvania as well as two new store locations in California.
“In Q4, we drove strong revenue growth, margin expansion and cash generation by focusing on operational excellence, disciplined cost control, and effective allocation of capital,” said Jason Wild, Executive Chairman of TerrAscend. “I’m pleased to see how our team has executed in the quarter.”
Mr. Wild added, “Looking at our growth plans for 2021, we are well-positioned to continue our momentum. The business is firing on all cylinders and we are only now just beginning to realize the benefits of our recently completed investments. Sales from facility expansions in Pennsylvania, New Jersey, and California are just starting to come to market, our acquisition in Maryland is expected to close imminently, and two additional retail stores are set to open in New Jersey .”
TerrAscend said in a statement that it is raising its full-year 2021 guidance to exceed the high end of previously communicated ranges. Additionally, the company is converting guidance into US dollars due to the anticipated change to USD reporting currency from CAD in the first quarter of 2021. TerrAscend expects full-year 2021 net sales to exceed $290 million and Adjusted EBITDA to exceed USD $122 million. TerrAscend said its 2021 outlook is driven by the company’s emphasis on organic growth through expansion in high-quality, limited license markets while continuing to maintain tight control on costs.
The company has big plans for the state of New Jersey. It received a permit to dispense medical cannabis at the first New Jersey dispensary in Phillipsburg. The company completed its second phase of the New Jersey 140,000 sq ft cultivation and manufacturing facility. It received a permit in New Jersey allowing for processing, extraction and manufacturing of cannabis products.
Sales from the Company’s 40,000 square foot greenhouse and 80,000 square foot indoor cultivation facilities are expected to ramp throughout 2021. TerrAscend’s Phillipsburg, New Jersey dispensary will achieve its first full quarter of sales in the first quarter of 2021 and the Company plans to open two additional dispensaries in the state in the second quarter and third quarter of 2021.
CEO Is Out
TerrAscend also announced that Jason Ackerman is stepping down from his role as CEO and Executive Chairman of the Company effective March 23. Jason Wild, current Chairman of the Board, will assume the position of Executive Chairman with the senior management team reporting directly to him. Additionally, Ed Schutter, current board member, has been appointed Lead Independent Director.
“On behalf of the entire team, I’d like to thank Jason Ackerman for his contributions as CEO and Board Member during his time with TerrAscend,” said Jason Wild, Executive Chairman. “Unfortunately, there were differences in philosophy over management style and culture, and the Board and I decided it is in the best interest of the company for us to part ways. We wish him the best in all his future endeavors.”
Richard Mavrinac, board member commented, “As the only TerrAscend Board member who pre-dates Jason Wild’s start as Chairman and lead investor in 2017, I have witnessed firsthand how he has shaped and grown TerrAscend into the innovative and profitable multi-state operator that it is today. With an extremely talented team in place and some of the best operational assets in the industry, I have every confidence that Mr. Wild will continue to lead the company to exciting new heights in his new and expanded role as Executive Chairman.”