TerrAscend Expands U.S. Footprint Via Acquisition of Maryland Based Grower Processor
- Accretive Deal Paves the Way for Entry into Attractive Limited License State
- Significant Opportunity to Expand Capacity of the Asset in 2021
NEW YORK and TORONTO, Nov. 6, 2020 /CNW/ – TerrAscend Corp. (“TerrAscend” or the “Company”) (CSE:TER,) (OTCQX: TRSSF), a leading North American cannabis operator, today announced the signing of a definitive agreement to acquire HMS Health, LLC and HMS Processing, LLC (collectively “HMS”) from Curaleaf Holdings, Inc (“Curaleaf”) (CSE: CURA) (OTCQX: CURLF). HMS is a cultivator and processor of medical cannabis products in the state of Maryland. The acquisition is expected to be immediately accretive to TerrAscend on an EBITDA basis.
HMS currently operates a 22,000 square foot cultivation and processing facility in Frederick, Maryland. Today, HMS produces dried flower and oil products for the medical cannabis market and has the capability to produce edibles upon regulatory approval. TerrAscend plans to significantly expand this existing capacity in the coming year. The majority of HMS’ employees are expected to join TerrAscend’s US operations.
This acquisition enables TerrAscend to expand its footprint into another robust limited license medical cannabis market with strong, long-term growth potential. By combining HMS with our industry leading scaled operations in the adjacent states of Pennsylvania and New Jersey, we will leverage our strong management team and corporate support functions to drive economies of scale.
Jason Ackerman, Executive Chairman and Chief Executive Officer of TerrAscend
We will also standardize cultivation practices, brand portfolio, and formulations to provide patients in Maryland with the high-quality, medical-grade products that TerrAscend is known for producing.
TerrAscend has agreed to acquire 100% of the equity of HMS from Curaleaf for a total consideration of $27.5 million, comprised of $25 million in cash and a $2.5 million note which bears 5.0% annual interest, due April 2022. Upon closing in the first quarter of 2021, 100% of HMS’ economics will be retained by TerrAscend through full ownership of HMS Health, LLC and a master services agreement with HMS Processing, LLC. The transfer of 100% equity of HMS Processing is expected to close in April 2022.
The Proposed Acquisition is subject to certain closing conditions, including approvals from regulatory authorities and there can be no assurance that the transaction will be completed.
The Canadian Securities Exchange (“CSE”) has neither approved nor disapproved the contents of this news release. Neither the CSE nor its Market Regulator (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
About TerrAscend
TerrAscend is a leading North American cannabis operator with vertically integrated operations in Pennsylvania, New Jersey, and California in addition to operating as a licensed producer in Canada. TerrAscend operates an award-winning chain of Apothecarium dispensary retail locations as well as scaled cultivation, processing, and manufacturing facilities on both the East and West coasts. TerrAscend’s best-in-class cultivation and manufacturing practices yield consistent, high-quality cannabis, providing industry-leading product selection to both the medical and legal adult-use market. The Company owns a number of synergistic businesses and brands, including The Apothecarium, Ilera Healthcare, State Flower, Valhalla Confections, and Arise Bioscience Inc. For more information, visit www.terrascend.com.
