The Toronto-based firm has operations in Canada, the U.S. and Europe, and it is in the process of buying retail chain The Apothecarium. It has been releasing increasingly bullish messages throughout the year regarding its commercial potential, but it has now been forced to backtrack on those claims.
At the time, chief executive Michael Nashat said the firm was experiencing a substantial acceleration in sales growth and he declared that he expected this to continue through the fourth quarter. It has now been admitted that it was being overly optimistic.
Chairman Jason Wild said that TerrAscend previously thought its “continued ability to execute” would overcome slower than expected growth in the Canadian retail market. “Unfortunately, we have realized that achieving our 2019 revenue target would lower our return on capital due to unacceptable profit margins in Canada, especially as compared to our U.S. business units,” he added.
It has reported preliminary unaudited Q3 revenue of $26 million. It brought in $14.6 million during Q1 and revenue jumped up to $17.6 million in Q2, so it is continuing on an upward curve.
Wild admitted poor forecasting on its Canadian business, but said he hopes this does not detract from a “tremendous” year for the firm.
TerrAscend is planning to launch stores Berkeley, California, and Phillipsburg, New Jersey, before the end of 2019 after closing the deal for The Apothecarium, which already has three stores in San Francisco and another in Las Vegas. It began shipping medical cannabis to Europe earlier this year after tying up a deal with German pharmaceutical wholesaler Iuvo Therapeutics GmbH.
TerrAscend has just appointed New York-based Jason Ackerman, founder and former CEO of online grocer FreshDirect, as executive chairman. He will oversee day-to-day operations at the company and work alongside Wild and Nashat to drive it forward.
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