That represented a 192% sequential increase on the C$5 million the firm brought in during Q4 2018. Net loss widened slightly, from C$7.1 million in the final three months of 2018 to C$7.2 million in Q1 2019.
TerrAscend’s Canadian subsidiaries – Solace Health, Solace Rx, Solace Health Network, Haven St., and Knuba Naturals – generated Q1 revenue of C$8.9 million.
On Jan. 15, 2019, it completed the C$13 million acquisition of hemp producer and distributor Grander and renamed it Arise Bioscience. This business makes hemp-based products and sells them in 10,000 retail stores across the world, with a particular focus on the U.S. market since the 2018 Farm Bill passed into law. Arise generated revenue of C$5.7 million between Jan. 15 and Mar. 31, leaving TerrAscend with its highest ever quarterly revenue figure.
“Our first quarter results reflect substantial progress toward our goal of becoming the leading North American Operator in the cannabis sector,” said president Matthew Johnson. “While achieving strong top-line growth at Arise, we’re focused on operational excellence that will enable us to become the leading global provider of hemp-based products.”
2019 Guidance Reiterated
TerrAscend reiterated guidance claiming it will achieve revenue of C$135 million in 2019. The sharp increase will be down to U.S. retail brand The Apothecarium, which the firm has agreed to purchase in a US$118.4 million deal made up of cash and stock.
Johnson said it is “nearing the closing” of the acquisition. The Apothecarium has three stores in San Francisco and one in Las Vegas, while it will open another dispensary in New Jersey before the end of the year, plus a cultivation facility in the Garden State.
TerrAscend is a vertically integrated operator and it produces modest amounts of cannabis under the Haven St. and Knuba brands. Haven St. sells in six Canadian provinces and the company claims it is among the top bestselling lines in each.
It is keen to boost its footprint in the growing market for hemp-derived health and wellness products, and the Arise team has been working on a new brand called Original Hemp, which will launch this month.
A Global Cannabis Company
As of Mar. 31, 2019, the firm held $8.6 million in cash. It set out to raise C$20 million in a private placement funding round, and eventually upsized it twice due to high demand. In the end it closed a first tranche of C$40.2 million, with the final tranche expected to close on May 27.
This will go towards a U.S. acquisition strategy in addition to general working capital.
TerrAscend bills itself as the first cannabis company to sell its products in Canada, the U.S., and Europe after its facility secured GMP certification, which is required to sell goods in the EU. It has a sales and distribution agreement in place with German pharmaceutical wholesaler Iuvo Therapeutics GmbH and it expects its products to hit German pharmacies before the summer.
Shares in TerrAscend opened at C$7.99 on Thursday, May 23, leaving it with a market cap of C$755.5 million. It began 2019 trading at C$5.83, and reached a high of C$8.81 on Feb. 1.
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