John Schroyer
TerrAscend Corp. (CSE: TER) (OTCQX: TRSSF) continued to post hefty losses to its bottom line in the first quarter of 2023, despite increasing revenue by nearly 43% year-over-year, the sixth sequential quarter in which revenues went up.
The Ontario-based multistate operator, which has a footprint in five states, lost $19.2 million in the quarter ending March 31, following a total loss of just under $300 million last year.
The Q1 losses were primarily attributed to “a $21.2 million reversal of goodwill and intangibles impairments in the fourth quarter of 2022 related to the finalization of the acquisition accounting for Gage,” one of its cannabis retail brands, the company reported.
Still, TerrAscend pulled in $69.4 million in revenue for the quarter, which was about flat from the end of 2022 but up 42.8% from Q1 last year. The company attributed that to “strong performance in New Jersey” – which had its first anniversary of recreational marijuana sales last month – and the $10 million acquisition of Allegany Medical Marijuana Dispensary in Maryland.
The coming year holds “substantial revenue growth,” predicted Executive Chairman Jason Wild in a press release, who added that TerrAscend will continue its expansion push as some competitors go up for sale this year.
“We operate in a number of attractive states that are converting to adult use, with Maryland starting on July 1,” Wild said. “While we would like to see the industry on stronger footing overall, we do believe that the distressed environment will present opportunities for us to acquire assets which could drive significant additional profitability.”
Among other first quarter highlights, TerrAscend reported, were:
- Its application to list on the Toronto Stock Exchange, which is still pending both shareholder approval and that of the TSX.
- The promotion of Ziad Ghanem to CEO and the appointment of Jeroen De Beijer as chief people and culture officer.
- Launches of TerrAscend’s 18th Michigan retail shop and also recreational sales at its Cookies Detroit location.
- The introduction of Gage branded products in Maryland.
- The inking of a new multiyear deal to sell Wana brand edibles at shops in California, Maryland, and New Jersey.
The company had $32.9 million in the bank as of March 31 and free cash flow of $5.9 million, a first in the black for TerrAscend since 2021, it reported.
