TerrAscend’s Leadership Team Takes a Deep Dive into Its Operations and Industry Outlook

Exclusive Webinar Hosted by New Cannabis Ventures Featuring TerrAscend Executive Chairman Jason Wild, President and COO Ziad Ghanem and CFO Keith Stauffer

On Jan. 19, New Cannabis Ventures hosted a webinar featuring three members of the TerrAscend (CSE: TER) (OTCQX: TRSSF) leadership team. Executive Chairman Jason Wild traced the company’s history and discussed where the MSO stands today. President and COO Ziad Ghanem delved into the company’s operations in each of its states and explained the company’s brand strategy. CFO Keith Stauffer provided updates on the company’s latest financial results and its balance sheet. Following the presentation, all three leaders answered questions from the audience about the company’s operations and future.

Listen to the entire webinar or read the summary below:

The History of TerrAscend

Wild runs JW Asset Management, a fund based in New York. He first began investing in the cannabis space in 2014. Initially, he focused his efforts in the Canadian market due to the federal illegality in the U.S. In 2017, he determined that TerrAscend would be the main platform to make a bigger play in the industry. That year, the company received a $52.5 million private placement. JW Asset Management funded 60 percent of the deal, and Canopy Growth funded the other 40 percent. At that time, Wild stepped into his role as Chairman of the company.

By 2018, the team determined that it was time to pivot into the U.S. market. They felt that the Canadian market wasn’t large enough to support the growing company. TerrAscend acquired The Apothecarium dispensary chain in California. In 2018, it applied for and won a license in the New Jersey market.

The company has continued to build out its presence on the East Coast. In 2019, it purchased Ilera Healthcare, taking it into the Pennsylvania market. Over the last year and a half, it has also acquired a cultivator and manufacturer in Maryland. It has since built out that asset, completing a larger, state-of-the-art facility.

TerrAscend has also established a significant footprint in the Michigan market via the acquisition of Gage Cannabis. It also acquired Pinnacle, adding five dispensaries to its footprint in the state.  While Michigan is undeniably a competitive market, the company is planning to demonstrate positive EBITDA and cash flow in the state.

TerrAscend Today

The company is in a strong place from a talent perspective, according to Wild. With its leadership, its assets and a strong balance sheet, he anticipates plenty of growth ahead.

Today, it has 1,200 employees, operations in five states, 32 operating dispensaries and several brands. The company is planning to leverage industry distress to acquire more assets at attractive prices. Wild anticipates adding more assets will drive improved margins and give the company further scale.

Market Deep Dive

Ghanem took over to discuss the company’s strategy and the importance of connecting with patients and customers. Over the past several weeks, he visited the company’s dispensaries in California and New Jersey to talk to team members and consumers. He was pleased to find the strength of the company’s KPIs reflected in the field. Next, he offered insight into the company’s operations across each of its five states.

New Jersey

In New Jersey, TerrAscend is a top-three player. It has nearly 20 percent market share in the flower and vape category and 50 percent market share in the concentrate category, according to Ghanem.


In Maryland, the company has invested in bringing its new facility online. Now, it is prepared for the launch of adult use. It plans to operate four dispensaries in the state, the maximum number allowed.


TerrAscend is also awaiting the launch of adult-use in Pennsylvania. Ghanem noted that the market is behaving like many others prior to adult-use. The patient registry is plateauing, and capacity is reduced, but the company is thinking long-term in the state. It is adjusting its supply to remain in-line with demand and preparing for the eventual launch of adult-use.


In Michigan, the company has resisted playing the pricing game, according Ghanem. The team is betting that the premium segment will remain the winning strategy. It does offer a value brand to reach customers who are more price-sensitive, but it plans to avoid playing in the mid-tier segment.

The company has had to make tough decisions in this market. It has optimized its operations and reduced its operating expenses. Ultimately, it does view Michigan as core to its overall success. It plans to go deeper in the state, bolting on deals, that will allow it to maintain positive EBITDA and cashflow from operations.


The TerrAscend team views California as its guiding compass for how the cannabis industry will grow. It often pilots projects in the state, especially on the cultivation front, that it then brings to its bigger markets to drive efficiency and cost savings.

Brand Strategy

The company has its own brands as well as brand partnerships. Most recently, it announced a new partnership with Wana. It also has a partnership with Cookies. These relationships are rooted in data on how the company performs across various segments, according to Ghanem. The company has a clear path forward for improving its market share in the edible segment.

TerrAscend’s brands are coupled with an elevated retail experience, which the company measures via consumer loyalty and speed of service. Ghanem shared how thrilled he is by the stickiness and customer loyalty he observed while visiting the company’s dispensaries. He also pointed to New Jersey as an example of the company’s customer service. That market’s dispensaries serve customers within an average of three minutes.


Next, Stauffer broke down the company’s Q3 results. The company reported $67 million in revenue for the quarter, sequential growth of 3 to 4 percent and year-over-year growth of approximately 30 percent. It reported an adjusted gross profit margin of 46.1 percent for the quarter, and it reported adjusted EBITDA of 16.9 percent, sequential growth of roughly 100 percent, according to Stauffer. He noted that the company achieved small, but important, cashflow from operations. The company’s Q3 results are a reflection of its efforts to build its business and reduce costs.

Stauffer also highlighted the progress the company has made on its balance sheet. TerrAscend has been able to reduce its debt levels by approximately 50 percent. Once it has taken some final actions in March, debt levels will go from $320 million on a pro forma basis to $150 million. This will also help to reduce the company’s annual interest expenses, going from $35 million to approximately $20 million. The company has been laser focused on clearing its hurdles to positive cashflow from operations and then, ultimately, to positive free cashflow, according to Stauffer.

Audience Q&A

After Wild, Ghanem and Stauffer shared their insight into the company’s story, the leadership team spent time answering questions from the webinar audience.

Question: As the US slumps deeper into recession, what is TerrAscend doing to attack the budget value minded consumer?

Answer: The company is monitoring the needs of its consumers. It recently launched Legend, its value brand, to complement its premium brands. The company often sees a combination of premium brands and the value brand in consumer baskets, according to Ghanem.

Question: Is the Gage brand being sold in New Jersey dispensaries other than Apothecarium?

Answer: TerrAscend has a retail business and wholesale business in New Jersey. It is seeing a high demand for its brands from other players in the market, and it sells many of its products through wholesale channels.

Question: If descheduling were to take place, how would the company’s profitability be impacted?

Answer: Descheduling would have a positive impact on the company’s profitability, particularly if it was accompanied by the elimination of the 280E tax. The company would also likely be able to access loans at much lower rates and list on U.S. exchanges. Stauffer estimates the benefit of descheduling could be in the tens of millions of dollars.

Question: If cannabis was rescheduled, as opposed to descheduled, and the FDA began regulating the industry, what would that mean for TerrAscend compared to its peers?

Answer: If the FDA began to regulate the space and set the bar for higher quality, Wild is confident that the company would be able to set itself apart from its competition.

Question: Would the Toronto Stock Exchange (TSX) require the company to execute a transaction where the newly listed parent would have an exchangeable infrastructure of the existing TerrAscend business? Or is it simpler than that? Is the company looking to move from the CSE to the TSX?

Answer: The company’s team has already had discussions about listing on the TSX, and it believes the company meets the criteria for a listing. It has also engaged outside counsel and put together a project team.

Question: Is the interaction with Canopy Growth going to drive that, or is that a side issue?

Answer: It is more of a side issue, according to Wild. As a company with Canadian and U.S. operations, the company already has the general structure it would need for a TSX listing. The company may need to make some tweaks, but it is largely set up favorably for a TSX listing, according to Stauffer.

Question: There is one MSO that has big plans in Europe. Does the company have plants to international, beyond Canada and the United States?

Answer: Wild still sees plenty of low-hanging fruit in the U.S. Once the company has filled in another 15 to 20 states, it may consider expansion outside of the U.S.

Question: California was TerrAscend’s first state in the U.S., but it is a messy market. What are you doing to address the challenges in California?

Answer: The company has leveraged its small grow in California to test innovations that it has since taken to other markets. It has been able to improve yield while decreasing costs. Within California, it is managing its costs. It has also partnered with a third-party supplier to relieve some of the pressure on the buying side.

Question: Michigan has been experiencing large price reductions in flower. How has your acquisition of Gage Cannabis exceeded or fallen short of your expectations?

Answer: While it is a little early to say, Ghanem stressed how the Gage brand and quality has exceeded expectations.

Wild chimed in to talk about how the company will likely have the opportunity to make more acquisitions in the Michigan market. The market is largely made up of smaller, private companies that are beginning to struggle, and TerrAscend is fielding inbound interest.

When the company acquired Pinnacle in Michigan, it was able to keep the labor model at the stores. The Gage was able to absorb the rest of the infrastructure. As the company acquires more dispensaries, they will be more profitable for the company than the previous owners because of that model, according to Wild.

Question: Is TerrAscend considering executing any sale leasebacks to boost liquidity for any future possible mergers, acquisitions or further debt reduction?

Answer: Thus far, the company has largely avoided sale leasebacks. It tends to favor leveraging its owned assets, according to Stauffer.

Question: With New Jersey retail capped at three stores, where will new Jersey retail growth come from over the next one to two years?

Answer: New dispensaries will continue to open in the state, offering TerrAscend opportunities to grow its wholesale business. Additionally, the state plans to allow current license holders to invest in and own up to 35 percent of seven social equity owned dispensaries, according to Wild. Those dispensaries could be branded with the Apothecarium or Gage name. The company could get up to 10 retail locations by exploring that option.

Question: If cannabis becomes federally legal in the United States, how would your expansion plans be impacted?

Answer: If cannabis became federally legal, the company likely would not need the same scale in each state. There would be cultivation and manufacturing consolidation, but the team doesn’t think this is a near-term possibility.

Question: It’s a big advantage for TerrAscend to have a narrow footprint as it does now. Because you can enter states where your peers are already operating and locked out from expanding, what are some of the states that you find most interesting that you’re not operating it now?

Answer: As cultivation becomes sophisticated, customers continue to expect higher quality products. Wild believes that many operators that own facilities in several markets won’t be capable of providing those high-quality products. This could give the company an advantage as it looks to acquire new licenses and facilities.

The northeast is a clear focus for the company. It may also be interested in Midwestern markets, like Ohio or Illinois. It would prefer to enter states that are either just starting to launch adult use or are planning to do so in the future.

New Cannabis Ventures hosts a sponsored Investor Dashboard for TerrAscend. Investor Dashboards quickly tell the official story and financial status about the company. You can visit the TerrAscend Investor Dashboard to get the most updated financial information and news on the company.

Exclusive article by Carrie Pallardy
Carrie Pallardy, a Chicago-based writer and editor, began her career covering the healthcare industry and now writes, edits and interviews subject matter experts across multiple industries. As a published writer, Carrie continues to tell compelling, undiscovered stories to her network of readers. For more information contact us.

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