TerrAscend Corp. (CSE: TER) has increased its full-year guidance after it enjoyed a 21% rise in revenue during Q2.
The firm brought in $14.6 million during Q1 and revenue jumped up to $17.6 million in the subsequent three months as a result of spiralling demand for its Haven Street brand. On a pro forma basis, revenue for Q2 was $42 million after factoring in the money generated by pending acquisitions.
TerrAscend is in the process of buying retail chain The Apothecarium and that will significantly bolster its commercial performance. On June 6, it closed a portion of the acquisition and it expects the deal to fully close in Q3.
It will then launch stores Berkeley, California, and Phillipsburg, New Jersey, before the end of 2019. The Apothecarium already has three stores in San Francisco and another in Las Vegas.
In April, TerrAscend announced full-year guidance of $135 million, declaring that The Apothecarium would make a huge contribution. It has now raised that guidance to $141 million.
“We are pleased to be in the position to raise our revenue guidance only four months after initially providing it,” said chief executive Michael Nashat. “We are seeing a substantial acceleration in sales growth in the third quarter and expect this to continue through the fourth quarter.”
During Q2 the company completed an expansion of its facility in Mississauga, Ontario, and it has begun the licensing process with Health Canada. That should allow it to fill more than 400,000 vape pens per month as Canada prepares to legalize cannabis concentrates by the end of the year.
The firm’s net loss attributing to its controlling interest was $21.1 million during Q2, after gross profit was $2.2 million and operating expenses reached $21.7 million.
It held $17 million in cash and cash equivalents on June 30, 2019, and it closed a private placement for $69 million the previous month. Since then TerrAscend, which has operations in the U.S., Britain and continental Europe, has secured a deal worth up to US$225 million to purchase Ilera Healthcare, one of five firms to hold a license for vertically integrated cannabis operations in Pennsylvania.
The deal is expected to close in Q4 and that would increase its revenue further for the year.
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