Cannabis Watch: TerrAscend eyes more M&A after closing big acquisition of Gage
TerrAscend Corp. plans to continue building out its U.S. presence as a multi-state cannabis operator through fresh acquisitions and organic growth, a company executive told MarketWatch.
Looking past the close Thursday of its major acquisition of Gage Growth to enter the Michigan market, TerrAscend
executive chairman Jason Wild said the company plans to operate 40 dispensaries by the end of the year, from 25 now in five states.
“From a merger and acquisition perspective, we’re looking to go deeper into states where we are, and we want to add one to two additional states over the next six to 12 months,” Wild said. “We’re looking at Michigan east toward the East Coast and up and down the East Coast from Massachusetts to Georgia.”
See: New York State to award up to 200 licenses to marijuana convicts
TerrAscend also plans to increase its head count from its current employee base of 1,250, which includes 750 people from TerrAscend and 500 for Gage.
The company currently operates a grow facility in Boonton, N.J., and is opening a dispensary in Lodi as the Garden state prepares to allow adult use sales of cannabis.
“We have a lot on our plate,” Wild said. “New Jersey is going to be massive.”
The company has purchased a warehouse in Maryland and it’s eying a greater presence in Pennsylvania, which is moving toward adult use cannabis from medical use now.
Last September, TerrAscend agreed to buy Gage for up to 77.1 million shares including 51.3 million shares upfront and 25.8 million additional shares in exchange for the target company’s convertible securities.
At last check, the 77.1 million shares are valued at about $369 million at $4.79 a share as of Friday’s trades. That’s down from the $550 million value of the all-stock deal in September when TerrAscend traded at nearly $7 a share just prior to airing its plan to buy Gage.
At the close of its merger with TerrAscend, Gage had $72.3 million in pro forma cash, including $55 million in proceeds from a senior secured debt financing. TerrAscend also has $103 million in cash as of Sept. 30. Wild said the company’s balance sheet remains in a strong position to do more deals.
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