TerrAscend Corp. (OTC: TRSSF) is an integrated cannabis company founded in 2017 and based in Mississauga, Canada. It offers prescription cannabinoids as well as medical cannabis solutions for patients who are suffering from debilitating illnesses and chronic pain. TerrAscend was the first company in the cannabis industry to start sales in the US, Canada, and Europe. But is TerrAscend a Buy?
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TerrAscend’s Businesses
TerrAscend has a number of synergistic businesses which include – The Apothecarium, an award-winning cannabis dispensary having several retail locations in the state of California, Arise Bioscience, a distributor and manufacturer of hemp-derived products, Ilera Healthcare, Pennysylvania’s premier medical marijuana processor, dispenser, and cultivator, and Valhalla Confections, a manufacturer of premium quality cannabis-infused edibles. In addition, the company holds a cultivation permit in the state of New Jersey (massive new cannabis market) as well as a Medical Cannabis Processor License in Utah.
Stellar 2020 Performance for TerrAscend
The year 2020 was a rather good one for TerrAscend Corp. Full-year net sales increased by 134% year-over-year to $198 million. Q4 net sales increased 152% year-over-year and 28% quarter-over-quarter to $65 million. The company recorded a net loss of $154.3 million for 2020. The adjusted gross margin also increased by 60% while its Q4 adjusted EBITDA went up 46% quarter-over-quarter to $26 million. The company ended the year with $75 million in cash and it also managed to raise $224 million this year to boost the overall liquidity position.
Additionally, the company expects full-year 2021 net sales to exceed $290 million and adjusted EBITDA to exceed $122 million, both of which exceed the high end of previous guidance ranges announced.
Jason Wild, Executive Chairman said, “Sales from facility expansions in Pennsylvania, New Jersey, and California are just starting to come to market, our acquisition in Maryland is expected to close imminently, and two additional retail stores are set to open in New Jersey.”
In New Jersey, sales from its 40,000 square foot greenhouse and 80,000 square foot indoor cultivation facilities are expected to ramp up throughout 2021. Its Phillipsburg, New Jersey dispensary will achieve its first full quarter of sales in the Q1 of 2021 and it plans to open two additional dispensaries in the state in 2021.
In California, TerrAscend completed an expansion of its State Flower cultivation facility in 2020 which is expected to increase the annual production capacity of super-premium craft flowers by 500%. It said that overall business continues to recover from the easing of COVID restrictions in the state.
This is all great news but is TerrAscend a Buy?
What Next for TerrAscend Investors?
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The company recently went through a change in its top official, wherein Jason Ackerman, its CEO stepped down from his role as CEO and Executive Chairman on March 23. The official reason given is that “there were differences in philosophy over management style and culture”. Considering that TerrAscend has come off one of its best years, the decision was a little jarring.
Jason Wild who is the current Chairman of the board has now taken up the position of the Executive Chairman will be having the senior management team reporting to him. Ed Schutter who is another board member will be the lead independent director.
TerrAscend said it “anticipates becoming a U.S. filer with the United States Securities and Exchange Commission by the end of 2021.” It is preparing to list on a major US exchange when permissible.
At present, this cannabis stock has increased by over 386% since April 20, 2020. TerrAscend’s current stock price as of April 2, 2021 is $10.14. The stock has fallen from its highs of $15.22 since the middle of February. Is now the time to buy TerrAscend?
Bottom Line: Is TerrAscend a Buy?
According to Cannin.com analysts, the TerrAscend stock has a price target of $18.50, meaning that TerrAscend has a potential upside of 82% from its current price of $10.14. With such a promising upside, we certainly believe TerrAscend is a buy.
Is TerrAscend a Buy?
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