TerrAscend Reports Second Quarter 2025 Financial Results

Executive Summary

• TerrAscend reported Q2 2025 financial results showing $65.0 million in net revenue and a GAAP net loss of $6.4 million from continuing operations, while achieving its 12th consecutive quarter of positive cash flow from continuing operations.
• The company announced a strategic exit from the Michigan market to reduce debt and focus on core Northeast markets (New Jersey, Maryland, Pennsylvania), where it maintains leadership positions and is seeing sequential revenue growth.
• Subsequent to the quarter-end, TerrAscend completed a $79 million non-dilutive refinancing of existing debt, extending maturities to late 2028, and secured an additional uncommitted term loan facility of up to $35 million for strategic M&A.

Key Details

• Financial Performance (Q2 2025 vs Q2 2024):
  • Net Revenue: $65.0 million (down 3.3% YoY).
  • Gross Profit Margin: 51.1% (up from 49.6%).
  • GAAP Net Loss from continuing operations: $6.4 million (vs $6.3 million loss in Q2 2024).
  • EBITDA from continuing operations: $15.9 million (vs $15.4 million).
  • Adjusted EBITDA from continuing operations: $16.0 million (vs $17.3 million).
  • Adjusted EBITDA Margin: 24.6% (vs 25.7%).
  • Net Cash provided by continuing operations: $7.3 million (vs $16.7 million, which included an $8.4 million tax refund).
  • Free Cash Flow: $5.0 million (vs $14.8 million).
• Strategic Actions & M&A:
  • Michigan Exit: Announced decision to exit the Michigan market, planning to sell substantially all Michigan assets in H2 2025 to pay down existing debt.
  • Ohio Acquisition: Closed on the acquisition of Ratio Cannabis, TerrAscend’s first dispensary in Ohio.
  • New Jersey Acquisition: Signed a definitive agreement to acquire Union Chill dispensary (approx. $11 million revenue run rate), bringing total NJ dispensaries to four upon regulatory approval.
  • Debt Refinancing: Closed a $79 million non-dilutive senior secured syndicated term loan. $68 million was used to retire existing indebtedness; the remainder is for growth. The transaction extends all senior secured debt maturities until late 2028.
  • New Credit Facility: Secured an additional uncommitted term loan facility of up to $35 million available for strategic M&A.
• Operational Highlights:
  • New Jersey: Maintained market leadership; all three Apothecarium locations ranked in the top 15 out of 220+ dispensaries by total units sold. Phillipsburg location ranked #3 in unit sales and #2 in revenue. Completed expansion of cultivation and manufacturing capabilities.
  • Maryland: Expanded cultivation capacity by 50% (completed in April, first harvest in June). On a $75 million revenue run rate with gross margins in the high 50s.
  • Pennsylvania: Retail and wholesale revenue grew sequentially; total revenue grew 6.9% quarter-over-quarter.
  • Share Repurchases: Repurchased 535,000 shares at a weighted average price of USD $0.29 per share during the quarter as part of a $10 million program initiated in August 2024.
• Balance Sheet & Cash Position:
  • Cash and cash equivalents: $26.7 million as of June 30, 2025.
  • Total Assets: $572.0 million.
  • Total Liabilities: $453.6 million.
  • Shareholders' Equity: $118.4 million.
  • Shares Outstanding: Approximately 381 million basic shares (306 million common, 11 million preferred converted, 63 million exchangeable).
  • Warrants/Options: 38 million outstanding at a weighted average price of $3.77.

Notable Quotes

• "In the second quarter of 2025, we made the decision to exit the Michigan market, to reduce existing debt and enable concentrated growth and improved profitability in core markets... Consistent performance in our three Northeast markets of New Jersey, Maryland, and Pennsylvania were the key drivers of these results." — Jason Wild, Executive Chairman
• "On the M&A front, we announced a definitive agreement in early May to acquire Union Chill dispensary in New Jersey... Shortly thereafter, we closed on the Ratio Cannabis acquisition, our first dispensary in Ohio... Subsequent to the end of the quarter, we completed a $79 million non-dilutive senior secured syndicated term loan... Our business is strong, and our confidence remains high as we continue to work towards further operational efficiencies, expanding our core business, and additional accretive acquisitions in key markets.” — Jason Wild, Executive Chairman