Terrascend increases New Jersey dispensaries to four

Executive Summary

• Terrascend Corp. has closed the acquisition of Union Chill Cannabis Company LLC, a dispensary in Hunterdon County, New Jersey, expanding its retail footprint to four locations in the state.
• The transaction is structured as a convertible note offering with an option to purchase, totaling $13 million in consideration, and is expected to be immediately accretive to EBITDA and cash flow.
• Upon full exercise of the option and consolidation, Terrascend’s total consolidated retail footprint will increase to 20 dispensaries across five U.S. states and Canada.

Key Details

• Transaction Status: Closed on the previously announced transaction with Union Chill Cannabis Company LLC.
• Total Consideration: $13 million.
• Payment Structure:
  • $9 million in the form of convertible notes bearing interest at 6.5%.
  • These notes provide an option to purchase 35% of Union Chill.
  • $4 million in cash payable upon the exercise of the option.
• Strategic Impact:
  • Expands Terrascend’s New Jersey retail footprint to four dispensaries.
  • Increases consolidated retail footprint to 20 dispensaries across five U.S. states and Canada upon full consolidation.
  • Expected to be immediately accretive to earnings before interest, taxes, depreciation and amortization (EBITDA) and cash flow.
• Target Asset Metrics:
  • Location: Hunterdon County, New Jersey.
  • Competitive Landscape: Limited competition within a 10-mile radius.
  • Financial Performance: Currently generating over $11 million in annualized revenue.
• Regulatory Context: Transaction conforms to New Jersey’s regulatory framework facilitating investment opportunities for diversely owned businesses.

Notable Quotes

• "Union Chill will strengthen our leadership position in New Jersey with the addition of a high performing dispensary strategically located in Hunterdon county," said Jason Wild, executive chairman of Terrascend. "This dispensary is well situated with limited competition within a 10-mile radius and is currently generating over $11-million in annualized revenue. With the integration of our premium brand portfolio, we expect to drive increased sales, margins and long-term value."