TerrAscend buying Maryland marijuana dispensary for $8 million

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TerrAscend Corp. has agreed to acquire Herbiculture Inc.’s cannabis dispensary in Burtonsville, Maryland, for $8.25 million, expanding the company’s retail footprint in the state to four outlets.

The deal has already been approved by the Maryland Cannabis Administration, the state’s chief regulator, and is expected to close in the coming days, according to a company news release.

TerrAscend is based in Mississauga, Ontario, and does business in both the United States and Canada.

The retail acquisition is the company’s fourth in Maryland since late January, and gives TerrAscend a notable toehold in the nation’s newest recreational cannabis market.

It recently agreed to acquire Hempaid, a medical marijuana dispensary, which does business as Blue Ridge Wellness, for $6.75 million.

The Herbiculture acquisition is the latest in a slew of industry acquisitions leading up to Maryland’s July 1 launch of adult-use sales.

Under recently adopted rules, companies are prohibited from selling a controlling interest within five years after converting to adult-use sales.

That’s a much lengthier stipulation compared to other markets, according to legal sources, and a potential hazard for companies with cash-flow issues, mounting debt or credit problems.

In another unique characteristics of the Maryland cannabis program, operators were also required to convert to recreational licenses before July 1 – or they couldn’t open their doors.

TerrAscend said it expects to achieve “significant sales and margin improvement” at the 3,100-square-foot Herbiculture store, which has a net revenue run rate of about $4.3 million.

“We anticipate that Herbiculture, combined with our other Maryland dispensaries, will drive substantial revenue growth and profitability,” TerrAscend Executive Chair Jason Wild said in the news release.

TerrAscend’s will operate 37 dispensaries nationwide after the Herbiculture acquisition closes.

Last week, TerrAscend received final approval to list on the Toronto Stock Exchange (TSX) – a first for a company with plant-touching operations in the U.S., where marijuana remains federally illegal.

The company will start trading on the TSX under the ticker symbol TSND on July 4.