Do you know who the only cannabis company with sales in the US, Canada, and Europe is?
For investors wanting broad cannabis sector exposure with one of the fastest-growing cannabis companies globally (with rapid revenue growth), this one is for you.
TerrAscend Corp. (CSE: TER | OTCQX: TRSSF) is “the first North American operator with scale operations in both Canada and the US….(and) the first and only cannabis company with sales in the US, Canada, and Europe.” By participating in the medical and legal adult-use cannabis market across Canada and in several legalized US states, where cannabis is used for therapeutic or adult-use, TerrAscend provides quality products, brands, and services to the global cannabinoid market.
Let’s start with some numbers for the cannabinoid market. Presently the potential for clients in Canada is 37 million, 327 million in the US, and 279 million in Europe.
TerrAscend businesses operations
- The Apothecarium – An award winning cannabis dispensary with several retail locations in California and Nevada.
- Arise Bioscience Inc. – A manufacturer and distributor of hemp-derived products.
- Ilera Healthcare – Pennsylvania’s premier medical marijuana cultivator, processor, and dispenser.
- Ascendant Laboratories Inc. – A biotechnology and licensing company committed to the continuous improvement of cannabinoid expressing plants.
- Solace RX Inc. – A proposed Drug Preparation Premises (DPP) focused on the development of novel formulations and delivery forms.
- Valhalla Confections – A manufacturer of premium cannabis-infused edibles.
- (A vertically integrated medical cannabis operation in the making) – TerrAscend has been chosen by the state of New Jersey to be one of six permit applicants for a vertically integrated medical cannabis operation.
Looking at the above businesses owned by TerrAscend it is clear they have a very broad and rapidly growing exposure to the legal cannabinoid market. In a highly fragmented market with significant opportunity for consolidation and a strong emphasis on innovation and R&D, TerrAscend is developing world-class licensed intellectual property for commercialization, and amplifying revenue opportunities (as discussed below).
The GMP certified indoor cannabis facility tripling of expansion is approved
In the first week of October, TerrAscend Corp. received approval from Health Canada for significant expansion at its facility in Mississauga, Ontario. This will increase the licensed space at the facility nearly three-fold from 17,800 sq. ft. to 51,800 sq. ft. It will include a greater cultivation capacity, a commercial kitchen, formulation rooms and increased primary and secondary packaging capacity to allow for new product formats and extracts for the Canadian Cannabis 2.0 market. The 2.0 market relates to cannabis edibles, beverages, and vapes.
Michael Nashat, CEO of TerrAscend stated: “Achieving this approval milestone is a crucial step in our plan to cultivate premium grade cannabis at scale for distribution to the EU and other international markets.”
The GMP certified indoor cannabis facility was first licensed for cultivation in July 2017. The expansion will serve as a platform for the export of cannabis products to Europe and other international jurisdictions.
Revenues on track to grow by 2,200% (pro forma) over the last 3 quarters
As an expanding U.S. Multi-State Operator (MSO) the Company is looking to capture an unprecedented market opportunity estimated at US$40 billion by 2024. Robust revenue growth is estimated to finish FY 2019 at ~C$135 million in revenue, up from only C$6.8 million in FY 2018. That would be a ~20 fold increase in just 1 year.
Adam Kozak CFO of TerrAscend comments: “As CFO of TerrAscend Corp. it has been exciting to lead TER to a global cannabis company with operations in both the U.S. and Canada, as well as distribution to Europe. We have been executing on our U.S. expansion strategy and organic initiatives, which have resulted in over 2,200% growth over the last 3 quarters (on a pro forma basis).”
TerrAscend is on track to achieve a 2,200% (pro forma) revenue growth
2019 will certainly see incredible revenue growth, which should continue in 2020 and 2021. Revenues are forecast to grow significantly to reach C$364 million in 2020, and $480 million in 2021. TerrAscend is forecast to become profitable in 2020, with a forecast C$17.1 million of net profit.
The TerrAscend leadership team has a proven track record in life sciences with deep roots in pharmaceutical and medical industries, with a lifelong dedication to consumer health.
TerrAscend is based in Canada and is now serving a growing global market and has surging revenue growth. TerrAscend’s growth strategy should see them as a big winner in the fast-growing global cannabinoid industry. TerrAscend has a market cap of C$ 271.5 million, and an average analyst price target of C$9.00 representing ~80% upside.