TerrAscend Q1 2024 Financial Result 

The TDR Three Key Takeaways regarding TerrAscend and Q1 2024 Financial Result:

  1. TerrAscend reports $80.6 million in revenue, up 16.1% year-over-year.
  2. TerrAscend achieves 33% growth in adjusted EBITDA.
  3. TerrAscend prepares for the impact of favorable legislative outcomes.

TerrAscend Corp. (TSX: TSND, OTCQX: TSNDF), a North American cannabis operator, today announced its financial results for the first quarter ended March 31, 2024. The company showed significant progress in revenue and operational efficiency, although it continues to operate at a net loss.

TerrAscend’s net revenue for the quarter was reported at $80.6 million, marking a 16.1% increase from the $69.4 million recorded in the first quarter of 2023. This growth is due to strong sales in its core markets, including Maryland and Pennsylvania, where the company has recently expanded its operations.

Despite the revenue growth, TerrAscend registered a net loss from continuing operations of $14.9 million, which, while still a loss, shows an improvement from the $19.2 million net loss reported in Q1 2023. The loss includes a heavy tax burden from 280E taxation. The company’s gross profit margin slightly decreased to 48.0% in Q1 2024 from 48.8% in the same quarter the previous year.

The company reported a healthy cash flow from operating activities, amounting to $13.3 million, up from $10.5 million in Q1 2023. Free cash flow also showed a positive change, rising to $10.5 million from $8.0 million year-over-year. These figures indicate TerrAscend’s improving ability to generate cash from its core operations.

EBITDA from continuing operations increased to $8.7 million, up from $6.1 million in Q1 2023. Adjusted EBITDA from continuing operations significantly grew by 33.0% to $16.2 million, compared to $12.2 million in the same period last year. The Adjusted EBITDA Margin from continuing operations was reported at 20.1%, up from 17.6% in Q1 2023, reflecting improved operational efficiency.

Jason Wild, Executive Chairman of TerrAscend, commented on the results: “For the first quarter, revenue and Adjusted EBITDA increased materially year-over-year, and we delivered another quarter of strong positive Free Cash Flow.” He further noted the potential for growth stimulated by legislative changes, stating, “In Pennsylvania, adult use appears to be closer than ever given recent legislative activities and comments from the Governor. At the federal level, the recent news around DEA rescheduling is encouraging and, if implemented, would dramatically improve our balance sheet and profitability.”

During the quarter, TerrAscend continued to expand its market presence with significant achievements including the acquisition of dispensaries and enhancement of its product lineup. The company also noted several upcoming events that could potentially enhance future performance, such as legislative reforms at both state and federal levels.

TerrAscend emphasized its strategic positioning with a “wide open map” strategy that allows for extremely profitable deals to enter additional attractive states via best-in-breed operators.

TerrAscend remains focused on leveraging its operational strengths and capitalizing on legislative changes to enhance its market position. While the company faces ongoing challenges, including operating at a net loss with full 280 E effects included its improved revenue and cash flow metrics point to a potentially stronger financial footing in the future. Investors and stakeholders may look forward to updates on regulatory changes and their impacts on the company’s strategic initiatives. We will continue to monitor the company’s developments and provide updates on its ongoing progress. Want to keep up to date with all of TDR’s research and news, subscribe to our daily Baked In newsletter.

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