TerrAscend Corp. announced today that it has signed an agreement that would give the company the option to acquire a fifth dispensary in New Jersey, while also moving forward with a shareholder vote intended to help position the company for a potential listing on a major U.S. stock exchange.
The company said its consolidated entities have entered into an option agreement to purchase Aunt Mary’s Dispensary LLC, located in Flemington, New Jersey. The Hunterdon County dispensary generates more than $10 million in annualized revenue, according to TerrAscend, and the transaction is expected to be immediately accretive on an EBITDA and free cash flow basis.
Aunt Mary’s opened in February 2023 and operates from a 5,200-square-foot retail space in a high-traffic corridor with limited nearby competition.
“Aunt Mary’s is a strong performer, generating over $10 million in annualized revenue,” said Jason Wild, executive chairman of TerrAscend. “We see a clear opportunity to enhance margins through vertical integration and the introduction of our premium brand portfolio, including Kind Tree, Legend, Valhalla and Cookies.”
Under the agreement, the total purchase price is $9 million. TerrAscend will pay $3 million through a five-year unsecured convertible promissory note carrying 6% interest for the option to purchase 35% of Aunt Mary’s, with another $6 million payable in cash if the option is exercised. Closing remains subject to customary conditions, including regulatory approval.
The acquisition would further expand TerrAscend’s New Jersey footprint, where the company already operates in the medical and recreational marijuana markets.
The announcement comes one day after TerrAscend filed a preliminary proxy statement with the U.S. Securities and Exchange Commission and on SEDAR+ for a special shareholder meeting scheduled for August 24. Shareholders of record as of June 30 will be eligible to vote.
At the meeting, shareholders will be asked to approve a proposed share consolidation of the company’s common shares, exchangeable shares and preferred shares. The consolidation ratio would be set by TerrAscend’s board within a range of one post-consolidation share for every five to 20 pre-consolidation shares, with the board given discretion to determine the exact ratio and timing within 12 months of shareholder approval.
TerrAscend said the move is intended to help the company meet minimum share price requirements established by major U.S. stock exchanges. The company noted that its financial statements are already prepared in accordance with U.S. GAAP, its shares are registered with the SEC and its shares are quoted on the OTCQX.
“The regulatory progress that has occurred over the past several months is real and meaningful,” Wild said in the company’s proxy announcement. “We believe uplisting to a major U.S. exchange is no longer a question of if, it is a question of when.”
The company said it intends to mail a notice of internet availability to shareholders on July 15. The proxy voting deadline is 1 p.m. Eastern Time on August 20.
TerrAscend currently has operations in Pennsylvania, New Jersey, Maryland, Ohio and California through TerrAscend Growth Corp., as well as retail operations in Canada. Its brands include The Apothecarium, Kind Tree, Legend, Valhalla, Ilera Healthcare, State Flower, Wana and Cookies.
