Toronto’s cannabis operator TerrAscend Corp (TSE: TSND) (OTCMKTS: TSNDF) will be buying a dispensary in a state that’s generating piles of cash from recreational bud.
Ohio has generated US$131 million from adult-use sales since its recreational market opened in early August. That dollar figure is about 65 per cent higher than the amount provided by the state’s medical pot sector during the period. Residents appear to be happy with fewer restrictions.
The marijuana cultivator announced its impending US$10.3-million-dollar acquisition of New Philadelphia’s Ratio Cannabis on Wednesday. Ohio is the sixth American state the Canadian operator will be active in. This new dispensary has no competition within a 20-mile radius, TerrAscend says.
“Entering Ohio and expansion in the Midwest has long been a priority for us,” the company’s Executive Chairman, Jason Wild, explained in a statement.
Ohio currently has a 10 per cent excise tax on cannabis merchandise while other states like California, Colorado and Arizona have 15 per cent or higher.
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TerrAscend reports unfavourable Q3 results; stock slides
TerrAscend’s net losses increased by over 154 per cent year-over-year during the quarter at US$21.4 million. The sequential increase was even greater, ascending from US$6.2 million in Q2 this year.
The North American marijuana supplier failed to meet analysts’ revenue expectations during Q3 too. TerrAscend generated over US$2 million less than expected at US$74.2 million. However, cash flow has remained positive for nine consecutive quarters.
Since Jan. 1, the grower’s stock has dropped by nearly 43 per cent.
Cultivator obtains major loan; initiates share repurchase program
The flower producer secured a US$140-million-dollar loan to propel its California, Pennsylvania and Maryland operations in August. That sum will also be used to balance TerrAscend’s Michigan balance sheet. This process was overseen by Ventum Financial.
TerrAscend initiated a 12-month share buyback program to repurchase US$10 million worth of its stock after securing that funding.
The distributor currently has 20 dispensaries in Michigan — far more than any other state in which it operates. The company also claims to hold the number-one market share in New Jersey where it runs a large-scale cultivation and extraction facility.
Cannabis suppliers active in the U.S. are eagerly awaiting results from the DEA’s upcoming hearing on federal rescheduling next month.
rowan@mugglehead.com
