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TerrAscend Provides Update and Closing Details for its Oversubscribed US$20 Million Private Placement
- Deal is upsized to US$30 million based on strong investor demand
- Initial tranche of approximately US$24 million closed today; final (fully subscribed) tranche to close on January 7
TORONTO, Dec. 30, 2019 /CNW/ – TerrAscend Corp. (CSE:TER) (“TerrAscend” or the “Company”), the first and only global cannabis company licensed for sales in Canada, the US, and the EU, today announced that its previously announced private placement (the “Private Placement”) generated strong investor interest and oversubscribed demand. Correspondingly, the Company has increased the offering size to approximately US$30 million which has been fully allocated and is anticipated to close in two tranches.
Today the Company closed the first tranche of the Private Placement, issuing 12,968,325 Units at an issue price of CAD$2.45 per Unit resulting in proceeds to the Company of CAD$31,772,412. Each Unit consists of one common share in the capital of the Company (the “Common Shares”) and one Common Share purchase warrant (a “Warrant”). Each Warrant will be exercisable to acquire one Common Share (a “Warrant Share”) prior to January 14, 2022 at an exercise price of CAD$3.25 per Warrant Share.
The Company has received subscriptions for the entire US$30 million, including significant participation from Chairman Jason Wild, Executive Chairman Jason Ackerman, and all of the Company’s additional directors. Subject to the satisfaction of customary closing conditions, including the approval of the Canadian Securities Exchange, the final tranche of the Private Placement is expected to close on January 7.
The Company intends to use the proceeds from the Private Placement to accelerate the completion of the New Jersey cultivation and processing facilities, to satisfy the previously announced January 2020 contingent purchase price payment related to the acquisition of Ilera Healthcare, and for working capital and general corporate purposes.
For further details concerning the Private Placement, please refer to the Company’s news release dated December 10, 2019.
The securities to be issued pursuant to the private placement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “1933 Act”), or under any state securities laws, and may not be offered or sold, directly or indirectly, or delivered within the United States absent registration or an applicable exemption from the registration requirements. This news release does not constitute an offer to sell or a solicitation to buy such securities in the United States.
The Canadian Securities Exchange (“CSE”) has neither approved nor disapproved the contents of this news release. Neither the CSE nor its Market Regulator (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
TerrAscend provides quality products, brands, and services to the global cannabinoid market. As the first North American Operator (NAO), with scale operations in both Canada and the US, the Company participates in the medical and legal adult use market across Canada and in several US states where cannabis has been legalized for therapeutic or adult use. TerrAscend is the first and only cannabis company with sales in the US, Canada, and Europe. TerrAscend operates a number of synergistic businesses, including The Apothecarium, an award-winning cannabis dispensary with several retail locations in California and Nevada; Arise Bioscience Inc., a manufacturer and distributor of hemp-derived products; Ilera Healthcare LLC, Pennsylvania’s premier medical marijuana cultivator, processor and dispenser; Ascendant Laboratories Inc., a biotechnology and licensing company committed to the continuous improvement of cannabinoid expressing plants; Solace RX Inc., a proposed Drug Preparation Premises (DPP) focused on the development of novel formulations and delivery forms; and Valhalla Confections, a manufacturer of premium cannabis-infused edibles. Additionally, TerrAscend has been chosen by the State of New Jersey to be one of six permit applicants for a vertically integrated medical cannabis operation. For more information, visit www.terrascend.com.
Caution Regarding Cannabis Operations in the United States
Investors should note that there are significant legal restrictions and regulations that govern the cannabis industry in the United States. Cannabis remains a Schedule I drug under the US Controlled Substances Act, making it illegal under federal law in the United States to, among other things, cultivate, distribute or possess cannabis in the United States. Financial transactions involving proceeds generated by, or intended to promote, cannabis-related business activities in the United States may form the basis for prosecution under applicable US federal money laundering legislation.
While the approach to enforcement of such laws by the federal government in the United States has trended toward non-enforcement against individuals and businesses that comply with medical or adult-use cannabis programs in states where such programs are legal, strict compliance with state laws with respect to cannabis will neither absolve TerrAscend of liability under US federal law, nor will it provide a defense to any federal proceeding which may be brought against TerrAscend. The enforcement of federal laws in the United States is a significant risk to the business of TerrAscend and any proceedings brought against TerrAscend thereunder may adversely affect TerrAscend’s operations and financial performance.
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