TerrAscend has worked out a deal that could mean huge growth for the cannabis operator. It is set to purchase two entities belonging to Curaleaf Holdings that, once the acquisition is complete, will allow it to increase its US footprint and, in particular, gain a solid position in Maryland. Once the deal is finalized, TerrAscend will be the owner of both HMS Health, LLC and HMS Processing, LLC, providing the company with more cultivation and processing capabilities for medical cannabis products in the state.
The two entities cover a combined 22,000-square-foot cultivation and processing facility located in Frederick, MD. They produce dried flower and oil products that are used in the medical cannabis segment and, once approved, will be able to produce cannabis edibles, as well. The integration of the two HMS companies into TerrAscend’s portfolio will give the latter substantial expansion possibilities and growth in the evolving market in and around Maryland.
TerrAscend CEO Jason Ackerman says of the planned acquisition, “This acquisition enables TerrAscend to expand its footprint into another robust limited license medical cannabis market with strong, long-term growth potential. By combining HMS with our industry-leading scaled operations in the adjacent states of Pennsylvania and New Jersey, we will leverage our strong management team and corporate support functions to drive economies of scale.”
TerrAscend is going to purchase 100% of the equity in the HMS components at a price of $27.6 million. That will include $25 million in cash and $2.5 million through a note that bears interest of 5% per annum and which will become due in April 2022. By the end of the first quarter of next year, all of HMS’ economics will be retained by TerrAscend through full ownership of HMS Health,” and a master services agreement will be signed between HMS Processing and the company. The total equity of HMS will be transferred when the note comes due in 2022.