TerrAscend Reports Rising Revenue, Chips Away at Debt

Company plans to pivot to 'deep and wide' strategy.

TerrAscend Corp. (CSE: TER) (OTCQX: TRSSF) posted higher sales in 2022 as it tries to find ways to uplist to a major exchange. The Ontario-based U.S. MSO reported its financial results for the fourth quarter and full year ending Dec. 31, 2022.

TerrAscend reported net revenue of $69 million in the fourth quarter, a 50.3% year-over-year rise and 4.2% sequentially. Net loss was $2 million, an improvement over the third-quarter net loss of $300.6 million.

Gross profit margin declined to 44.6%, and adjusted EBITDA from continuing operations was $12.2 million, a decline from the third quarter of 2022. The company attributed the decline to pricing pressure in Michigan and start-up expenses at the company’s Hagerstown facility in Maryland.

“Looking ahead, we expect the distress in the industry to lead to opportunities for us to pivot our ‘deep not wide’ strategy to a ‘deep and wide’ strategy, on our terms,” said executive chairman Jason Wild.

Net revenue for the full year was $247.8 million, a 27.6% increase compared to 2021, driven by the launch of adult-use sales in New Jersey and acquisitions in Michigan, though G&A expenses increased for the same reasons as gross profit margin for the year declined.

Net loss was $299.4 million in 2022. The company recorded a non-cash impairment charge of $331.2 million for its Michigan business in the third quarter, though the fair value of net assets acquired was finalized by the fourth quarter, resulting in a $20.2 million reduction in the impairment charge.

Adjusted EBITDA for full year was $38.8 million, a decline compared to 2021.

TerrAscend achieved positive cash flow from operations worth $7.3 million during the quarter, reduced debt by $80 million, and applied to uplist to the Toronto Stock Exchange (TSX). The company ended in the quarter with $26.2 million in cash and cash equivalents, down from $34.2 million in September 2022.

The company spent $13.5 million on capex during the quarter, mostly to pay for a new facility. It also completed a $45.5 million financing with Pelorus Equity Group and paid down $30 million of its $55 million term loan with Chicago Atlantic, refinancing the remaining balance of $25 million.

Adam Jackson

Adam Jackson writes about the cannabis industry for the Green Market Report. He previously covered the Missouri Statehouse for the Columbia Missourian and has written for the Missouri Independent. He most recently covered retail, restaurants and other consumer companies for Bloomberg Business News. You can find him on Twitter at @adam_sjackson and email him at adam.jackson@crain.com.

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the latest cannabis news delivered right to your inbox

The Morning Rise

Unpack the industry with the daily cannabis newsletter for business leaders.

 Sign up

About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


Recent Tweets

Get the latest cannabis news delivered right to your inbox

The Morning Rise

Unpack the industry with the daily cannabis newsletter for business leaders.