Ilera is one of five firms to possess a Super License in the Keystone State. This allows it to engage in the vertically integrated model of cultivating, processing, and dispensing marijuana to the good people of Pennsylvania.
It will pay US$25 million in cash to shareholders of Ilera, plus an additional US$25 million worth of proportionate voting shares in the equity of TerrAscend. It will then hand over an additional cash consideration of up to US$175 million depending on Ilera meeting certain revenue and profitability targets.
The transaction is due to close in Q4 2019, subject to Pennsylvania Department of Health approval. The plan is for Ilera’s senior team, including chief executive Greg Rochlin, director of cultivation Andrew Sack and chief scientific officer Oludare Odumosu, to continue in their roles and benefit from the support of the wider TerrAscend management.
If they hit certain targets, staged payments will be made to former shareholders of Ilera during 2020 and 2021.
Ilera’s facility in Waterfall, Pennsylvania, has a genetic library of 170 cannabis strains. It supplies Ilera’s dispensary along with 50 of the other 52 dispensaries operating in the state. It plans to open another two dispensaries in Region 1, which includes Philadelphia, in the next six months.
TerrAscend chief executive Matthew Johnson said the firm looks forward to launching Ilera products in its other jurisdictions, and bringing its existing portfolio to patients in Pennsylvania.
“We plan on launching California-born Valhalla Confections and State Flower brands and our leading premium Canadian cannabis brand, Haven St. into the Pennsylvania market,” he said.
Earlier this year, TerrAscend provided guidance revenue of C$135 million for 2019 after purchasing U.S. retail chain The Apothecarium, and it has reiterated that guidance today. That does not include additional revenue that the Ilera operation will bring in if the deal closes, as expected, in Q4.
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