TerrAscend Earnings + Call Notes
U.S. canna leader reports and looks ahead.
$65.5M Revs; est. $65.4M
$17.4M AEBITDA; est. $16.4M
$34.6M GP; est. $33.9M
52.8% GM; est. 51.9%
($6.8M) NI; est. ($9.8M)
($0.03) EPS; est. ($0.03)
$8.7m OPCF
$7.8m FCF
Management Commentary
“The business returned to year-over-year revenue growth from continuing operations, while gross margins,
Adjusted EBITDA margins and other key profitability metrics grew sequentially and exceeded our targets for the quarter.
This positive operational momentum, combined with the recently completed rescheduling of medical cannabis, and the promise of further progress, has the team more excited than ever about our future.
We remain committed to executing on our business strategy, driving efficiency, profitability, and growth while continuing to generate positive cash flow.
Together with our strong balance sheet and disciplined approach to capital allocation and M&A, we are positioned to deliver value for our patients, customers, and shareholders.
The decision by the U.S. Department of Justice to reclassify state-licensed medical cannabis to Schedule III is a historic step forward that has resulted in the elimination of the 280E tax burden. In addition, we believe the anticipated rescheduling of adult-use cannabis in the coming months will further expand access to institutional capital and provide TerrAscend with an opportunity to up-list to the NASDAQ or NYSE.
These developments are expected to improve profitability, strengthen our balance sheet, and lower our cost of capital over time.”
Jason Wild, Chairman
Call Notes
Rescheduling a monumental inflection point for the whole industry.
Rescheduling should lead to uplisting and international export.
Retroactive tax relief should represent a meaningful upside, not reflected in valuations.
Operating independent of regulatory reform.
Upcoming Q4 hemp regulation a strong tailwind for the sector.
$65.5m net revs from continuing ops.
$17.4m adj EBITDA from continuing ops,
^ grew 130bps QoQ and exceeded targets.
26.5% margin
52.8% GM.
^ grew 70bps QoQ and exceeded targets.
$8.7m OPCF+
^ 15th consecutive quarter.
$7.8m FCF.
^ 11th consecutive quarter.
10.3% FCF yield.
MD a $75m R/R; GMs in high 50s
Consolidated Union Chill dispensaryIn PA, generated revenue growth for 4th consecutive quarter.
Expanded PA cultivation harvested
Selective on M&A.
^ passed on opportunities not attractive
Distressed assets available in core markets.
Look forward to sharing M&A details in the coming weeks.
NJ revenue improved during the quarter, led by retail (full quarter of Union Chill acquired dispensary)
NJ wholesale revenue declined slightly QoQ
NJ GM improved QoQ, driven by improved verticality
All NJ dispensaries in top 25, gained market share QoQ
NJ Highest grossing retailer in state
NJ Kind Tree and Legends continue to perform well, combined growth across key categories
NJ Legend vape sales grew double digit share
NJ leading position in vape, seeing growth in edibles
Expect disciplined growth in NJ, including evaluating cult/manu expansion, and additional retail licenses
MD $75m R/RMD GMs in high 50s
Hagerstown facility expansion driving improved flower output and operating leverage
MD retail revenue stable, wholesale revs modestly lower
Two of 4 top 10 MD stores
MD Kind Tree and Legend showing notable growth in flower and vape.
Launched Legend pre-rolls in MD during the quarter
PA YoY rev growth for 4th consecutive quarter
Wholesale and retail revenue in PA grew YoY
5 of 6 TSND PA doors rank in top 15 statewide
PA Kind Tree and Legend saw double digit growth QoQ across key categories
Fully built out PA large scale cultivation facility, no need for additional investment
Reactivated 6 additional cultivation rooms in ’25, first harvests in April ‘26
Kind Tree remains a leading brand in PA
Higher revenue per store in PA vs. peers
Ratio Cannabis in OH now consolidated into operations
Completed majority of asset stales in MI, will use proceeds to pay down debt
Core markets of NJ MD PA
Focused on efficiency, disciplined cost management
Generated $31.4m OPCF in last 4 quarters
Generated $24.3m FCF in last 4 quarters
$65.5m Q1 revs; $19.1m wholesale + $46.4m retail
52.8% GM vs. 52.1% in Q4’25^
Growth driven by PA MD NJ
32.8% SG&A margin
$17.4m Adj EBITDA,
26.5% margin (vs. $16.7m or 25.2% margin in Q4 ’25)
QoQ improvement driven by strong GM and operating discipline
Cash of $39.1M
$0.9m CAPEX
Expect Q2 YoY rev growth of 2-3%
Expect consistent strong GM perf in Q2
Anticipate continued OPCF and disciplined capital deployment
Not much change in M&A front, in several discussions
^ No change in tone post-rescheduling, if anything, makes them more bullish on doing a deal
^ Looking at TSNDF stock as a higher likelihood of going public on a US exchange in the next 12-24mo
1 store in OH today, performing well vs. expectations
OH strategy to build the same business similar to other states
Conversations w/ acquisitions are going well
Have said no to some M&A deals that didn’t make sense on price, but continue to have conversations
Wholesale decline QoQ is a result of price compression and focus on vertical integration
Small part is timing between Q4 and Q1
Wholesale starts w/ quality of products
Record single quarter for finished unit sales of TSNDF SKUs
Penetration and number of wholesale accounts continues to be strong, no scale back
Added 1 healthy store to NJ footprint, added GM protection due to increased verticality.
Will continue to see increased verticality, plans for further M&A in NJ
Strain selection strategy is developed a year out, more room on this front
Pricing pressure will continue to happen, will have to continue to work on increasing verticality to protect gross margins
Confident in Q1 GM and delivering the same level for the rest of the year
Launching the most number of SKUs in Q2 and Q3
/end
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CB1 has a position/ is an advisor and nothing herein should be considered advice.