TerrAscend Corp., a leading North American cannabis company, today reported its financial results for the fourth quarter and full year ended December 31, 2023. All amounts are expressed in U.S. dollars and are prepared under U.S. Generally Accepted Accounting Principles (GAAP), unless indicated otherwise.
The following financial measures are reported as results from continuing operations due to the shutdown of the licensed producer business in Canada, which is reported as discontinued operations through September 30, 2023. All historical periods have been restated accordingly.
Fourth Quarter 2023 Financial Highlights
- Net Revenue was $86.6 million, an increase of 25.5% year-over-year.
- Gross Profit Margin was 48.2%, compared to 44.6% in Q4 2022.
- GAAP Net loss from continuing operations was $41.8 million, inclusive of $57.7 million of non-cash impairment charges, compared to a net loss of $2.0 million in Q4 2022. The non-cash impairment charges were recorded against goodwill and intangibles for the Company’s Michigan and California businesses.
- EBITDA from continuing operations1 was ($36.7) million, including the aforementioned non-cash impairment charges of $57.7 million, compared to $30.0 million in Q4 2022.
- Adjusted EBITDA from continuing operations1 was $19.6 million, an increase of 60.7% year-over-year.
- Adjusted EBITDA Margin from continuing operations1 was 22.7%, compared to 17.7% in Q4 2022.
- Cash flow provided by continuing operations was $9.4 million compared to $7.3 million in Q4 2022.
- Free Cash Flow2 was $7.9 million compared to $3.9 million in Q4 2022.
Full Year 2023 Financial Highlights
- Net Revenue was $317.3 million, an increase of 28.0% year-over-year.
- Gross Profit Margin was 50.3% compared to 41.0% in 2022.
- GAAP Net Loss from continuing operations was $82.3 million, inclusive of $58.0 million of non-cash impairment charges, compared to a net loss from continuing operations of $299.4 million in 2022, inclusive of $311.1 million of non-cash impairment charges. The non-cash impairment charges were recorded against goodwill and intangibles for the Company’s Michigan and California businesses.
- EBITDA from continuing operations1 was ($3.3) million, compared to ($248.5) million in 2022, including the aforementioned non-cash impairment charges of $58.0 million in 2023 and $311.1 million in 2022.
- Adjusted EBITDA from continuing operations1 was $68.8 million, an increase of 77.1% year-over-year.
- Adjusted EBITDA Margin from continuing operations1 was 21.7% compared to 15.7% in 2022.
- Cash flow provided by (used in) continuing operations was $31.1 million compared to ($21.8) million in 2022.
- Free Cash Flow2 was $23.4 million compared to ($61.5) million in 2022.
“We made substantial progress in 2023 across virtually all facets of our business, including significantly improving our margins, transforming our balance sheet, materially lowering our interest expense, and delivering positive free cash flow, all while driving industry leading revenue growth of 28%. I am extremely pleased that, for the first time in our history, we generated positive cash flow for a full year, with $31.1 million in cash flow from continuing operations and $23.4 million in free cash flow,” stated Jason Wild, Executive Chairman of TerrAscend. “We have the right team, high-performing assets, strong operating results and cash flow, and ample greenfield opportunities to pursue additional growth. 2023 was about operational excellence and strengthening the foundation. 2024 is about expansion by capitalizing on the current environment and entering into attractive states on accretive terms which would not have been possible two years ago.”
2023 Business and Operational Highlights
- First full year of positive cash flow provided by continuing operations and positive Free Cash Flow in the Company’s history.
- In March 2023, promoted Ziad Ghanem to the role of Chief Executive Officer.
- Closed on Private Placements totaling $21.0 million, enabling qualification for Toronto Stock Exchange (“TSX”) listing.
- Completed sale of Mississauga facility in Canada for CAD $19.7 million.
- Closed on a $25.0 million commercial loan with Stearns Bank carrying an interest rate of prime plus 2.25%, equivalent to 10.5%, with proceeds used to pay down higher interest debt.
- Paid down $43.0 million of Ilera senior secured term loan.
- Closed on the acquisition of four high-performing retail dispensaries in Maryland.
- Commenced adult-use sales in Maryland with the maximum four retail dispensaries permitted and a state-of-the-art cultivation and manufacturing facility.
- Commenced trading on the TSX under the symbol ‘TSND’ on July 4, 2023.
- Introduced Wana infused gummies in New Jersey and Maryland.
- Successfully launched both Kind Tree and Legend in Michigan, as well as Legend and Valhalla in Pennsylvania.
- Scaled up production of non-flower THC SKUs at Hagerstown, Maryland facility.
- Opened 18th and 19th Michigan retail locations.
- Awarded Maryland “Best Retail Expansion Strategy” by Benzinga.
- Provided foundational support to the David Boies lawsuit filed against the U.S. Attorney General, seeking equal treatment for cannabis businesses.
