Investors who believed in the potential of US cannabis operator TerrAscend some five years ago are enjoying solid returns today. TerrAscend has vertically integrated operations in Pennsylvania, New Jersey, Michigan, and California, plus licensed cultivation and processing activities in Maryland and licensed production in Canada. The company also operates a chain of retail dispensaries, The Apothecarium, Gage, and Cookies. Perhaps it is all of this that has led it to report financial results for the third quarter ending September 30, 2022, that are quite positive.
The leading North American cannabis operator unveiled financial highlights such as net income, which rose 3.4% sequentially and 36.4% year over year to $67 million. When it comes to its adjusted EBITDA, the company reported a figure in excess of $11 million, up 96% sequentially and 22.8% year over year.
Moreover, cash flow from operations was positive $1.5 million, compared to negative $16.1 million in the second quarter of 2022. The company noted that once the third quarter came to an end, it was able to close a $45.5 million non-brokered senior secured term loan.
“We took decisive action to reduce our operating expenses in the quarter while still generating record sales,” commented Jason Wild, TerrAscend’s chief executive officer. “These factors combined to drive substantial improvement in quarter-over-quarter adjusted EBITDA margins and positive cash flow from operations.”
The CEO added that the company plans to implement its brand strategy in Maryland and Pennsylvania similar to how it does in New Jersey. There, it has quickly established itself as a leading operator with three of the top ten flower SKUs, including No. 1. The Keystone State and the Old Line State are still waiting to formalize the launch of their recreational cannabis market.
TerrAscend’s most recent moves include the acquisition of KISA Enterprises MI, LLC (known as Pinnacle), a dispensary operator in Michigan. The purchase is immediately accretive to TerrAscend in terms of both sales and EBITDA. News of the acquisition came on the heels of the launch of the first cannabis concentrates in New Jersey.