TerrAscend Corp.

What they do

The company cultivates, processes and sells cannabis through four cultivation and processing facilities and twenty operational dispensaries, operating under one reportable segment in its 10-K and three state-level segments (New Jersey, Maryland, Pennsylvania) in its latest 10-Q, with other states in 'All other'. Its retail stores are branded The Apothecarium, and it sells in-house brands Kind Tree, Legend, Valhalla, State Flower and Ilera Healthcare, plus licensed third-party brands Wana and Cookies. It has majority-owned operations in New Jersey and Canada and wholly-owned operations in Maryland, Pennsylvania, California and Ohio.

Revenue drivers

• Pennsylvania retail and cultivation — TerrAscend PA is a wholly-owned operation with six dispensaries and a cultivation/processing facility, the largest store count of any state operation named in the 10-K.
• New Jersey retail and cultivation — TerrAscend NJ is majority-owned with four dispensaries and a cultivation/processing facility; the company signed an option on Aunt Mary's Dispensary LLC in June 2026 for total consideration of $9,000, which would add a fifth New Jersey dispensary.
• Maryland retail and cultivation — TerrAscend MD is wholly-owned with four dispensaries and a cultivation/processing facility, and is the sole manufacturer, supplier and commercialization partner for Wana edibles in the state and a cultivator/supplier of Cookies products in Maryland and New Jersey.
• California and other markets — TerrAscend CA is wholly-owned with four dispensaries and a cultivation facility, while Ohio has one wholly-owned dispensary and Ontario, Canada has a majority-owned Cookies Canada dispensary in Toronto; these are grouped outside the three state reportable segments.

Recent performance

Second quarter 2026 net revenue was $67.1 million, up 2.4% sequentially from $65.5 million and 3.3% year-over-year from $65.0 million. Gross profit margin was 54.0%, versus 52.8% in Q1 2026 and 51.1% in Q2 2025. GAAP net loss from continuing operations was $10.1 million, compared with $6.8 million in Q1 2026 and $6.4 million in Q2 2025. Adjusted EBITDA from continuing operations was $17.7 million, or 26.3% of net revenue, up 11% year-over-year. Net cash provided from continuing operations was $7.4 million and free cash flow was $5.7 million, which the company described as its 16th consecutive quarter of positive cash flow from continuing operations and 12th consecutive quarter of positive free cash flow.

Strategy

Management said the quarter's revenue, gross margin and Adjusted EBITDA increased sequentially and year-over-year as revenue rose across New Jersey, Maryland and Pennsylvania in both retail and wholesale channels. The company completed an oversubscribed $21.8 million convertible debenture financing in June 2026, which it said extended convertible debt maturity to 2031 at a lower interest rate and enhanced financial flexibility, using $11,124 of proceeds to retire convertible debentures maturing June 23, 2026. It signed an option to acquire a fifth New Jersey dispensary in June 2026 and, per the 10-K, is running an active program to sell TerrAscend Michigan assets expected to be substantially completed in the first half of 2026. Executive Chairman Jason Wild said the company is taking steps to prepare for an uplisting to a major U.S. exchange. The Board authorized a Share Repurchase Program of up to 10,000,000 common shares running from August 22, 2025 to August 21, 2026.

Risks

• Federal illegality — Cannabis remains illegal under U.S. federal law under the Controlled Substances Act, even where states have legalized medical or adult use.
• Section 280E tax treatment — The 10-K states state-licensed cannabis businesses are assessed a comparatively high effective U.S. federal income tax rate because Section 280E prohibits deducting certain expenses, with the bulk of operating and general administrative costs not deductible.
• Michigan receivership and forbearance — A Receiver was appointed over the Michigan Receivership Entities on May 6, 2026, and the company entered a Forbearance Agreement with lenders on May 1, 2026 as a result of the Michigan Receivership.
• Debt and leverage — At June 30, 2026 total liabilities were $469.7 million against shareholder equity of $84.0 million, including $209.7 million of long-term debt and $217,682 thousand outstanding principal under the FG Loan as of December 31, 2025 at 12.75% interest.

Outlook

Management said second quarter revenue, gross margin and Adjusted EBITDA exceeded its expectations and highlighted a strong cash position of $42.0 million. It cited regulatory momentum, including the April 23, 2026 Final Order reclassifying cannabis for medical use from Schedule I to Schedule III under the Controlled Substances Act, which does not apply to adult-use cannabis and established an expedited registration process for state medical licensees. The company said it is taking steps to prepare for an uplisting to a major U.S. exchange and, in June 2026, signed an option to acquire a fifth New Jersey dispensary.