TerrAscend Corp. (OTCQX: TRSSF) reported that its total revenue increased 36% sequentially and 169% year over year to $47.2 million for its second quarter ending June 30, 2020. The net loss for TerrAscend in the quarter was $13.6 million, which was down from last year’s net loss of $19.1 million for the same time period.
The company also reported an adjusted EBITDA of $11 million, a 131% increase from the last quarter. The gross margin expanded sequentially to 56% from 45%, which shows its solid momentum.
With cash and cash equivalents of $75 million, the strikingly impressive revenue was contributed by the US operations, which generated 90% of consolidated net sales compared to the prior quarter.
The CEO and Executive Chairman of TerrAscend, Jason Ackerman, believes that the top performance is as a result of their unwavering commitment to achieving best-in-class results from their operations. “We have been thoughtful in our approach to expanding our business, primarily focused on the areas of the U.S. market, where we see the highest probability of sustained, long-term growth. With cultivation at our New Jersey production facility underway and our Pennsylvania operations continuing to track ahead of plan, I am confident we can continue this solid momentum into the second half of the year.”
Prices Increase, But Write-Offs Happened
Terrascend did state that its dry bud prices increased from $8.51 per gram in December 2019 to $9.14 in June 2020. The trim prices increased from $2.42 in December to $6.01 in June 2020.
Still, during the quarter ending in March, management assessed that the net book value of inventory held at its Canadian facility relating to raw materials and Cannabis 1.0 products (finished goods) exceeded the net realizable
value and thus recorded an impairment of $1,772 (December 31, 2019- $9,184). Management also determined net realizable value as the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale. In addition, during the three months ended March 31, 2020, management wrote off $135 (December 31, 2019 – $5,078) of inventory that it deemed unsaleable.
Since The Quarter Ended
On July 6, 2020, the Company opened its third Apothecarium dispensary in Pennsylvania and sixth overall. On July 31, 2020, the Company opened its fourth Apothecarium dispensary in California, in Berkeley. This is the
Company’s seventh Apothecarium dispensary overall. The stores will carry a wide variety of medical cannabis products, including dried flower, vaporizable and activated oils, concentrates, capsules, tinctures, topicals, and ancillary products.
On August 4, 2020, the Company’s greenhouse located at its Boonton facility has been approved by the New Jersey Department of Health (“NJ DOH”) to begin cultivating cannabis. Concurrently, TerrAscend has commenced initial
planting of this facility with the first harvest anticipated occurring during the fourth quarter of this year.
On August 5, 2020, the company announced the appointment of Jason Marks as Chief Legal Officer.
TerrAscend is forecasting that its full-year net sales should be at least $192 million driven by second half 2020 net sales growth of at least 34% versus the first half of 2020 and 109% year over year. The company also said that the adjusted EBITDA for the year is expected to be at least $45 million. TerrAscend noted that the outlook is driven by the company’s continued emphasis on further expansion of its most profitable business in Pennsylvania and ramp-up and further expansion of its retail footprint in Pennsylvania, New Jersey, and California while maintaining a tight overall focus on costs.