Combines Strong Leadership Teams, a Portfolio of Powerful Brands and Operations Delivering Quality at Scale
Expanded Footprint Includes 7 Cultivation Facilities and 25 Retail Locations with Operations in 5 States and
Upon completion of the Transaction,
"This is a defining moment for TerrAscend as we combine two leading vertically integrated operators with proven cultivation and manufacturing expertise, deep portfolios of proprietary flower strains, and top-selling brands across our core markets," said
"We are thrilled to join forces with
Key Transaction Highlights and Benefits
The Transaction is anticipated to result in the following benefits:
- Leadership in a Top State: Gage has established itself as a leader in
Michigan , which is the third largest cannabis market in theU.S. with reported cannabis sales of$168 million in the month ofDecember 2021 , representing an annualized market size of over$2.0 billion 1. - Premium Brands: The Transaction provides access to Gage's sought-after brand and pheno-hunting capabilities as well as Gage's exclusive licensing partnerships in
Michigan with Cookies,Blue River , Pure Beauty,Khalifa Kush , and others. - Efficient Operating Model: The combined company will operate or manage 7 cultivation facilities, including 3 facilities in
Michigan , in addition to Gage's multiple contract grow agreements. - Deep Market Penetration in Attractive Core Markets: The combined company will have a platform poised for significant growth and deep market penetration in its key markets. Gage's highly coveted brands and proprietary product lines are expected to accelerate the performance of
TerrAscend's existing brand portfolio. - Expanding Retail Footprint: The combined company's retail network is expected to reach 40 stores by the end of 2022. This includes 25 currently open dispensaries across 5 states with Gage managing 11 dispensaries in
Michigan and 1 Cookies dispensary inCanada , in addition toTerrAscend's 13-store footprint in key markets includingCalifornia ,New Jersey andPennsylvania . - A Leader in Experiential Retail: Gage dispensaries generate industry leading retail metrics, including strong average basket size and premium pricing for its flower products (50%+ relative to the
Michigan market average price1).TerrAscend expects to leverage Gage's portfolio and flower expertise in addition to brand and marketing capabilities, across its retail network and geographies (subject to applicable regulatory approval). - Expert Operating Teams: The Transaction combines management teams with similar core philosophies, strong track records of execution and operational expertise in building leading businesses in the most competitive cannabis markets. High quality products and experiences will remain a top priority while scaling the Company's operations across
North America . - Balance Sheet Strength: Gage's
$72.3 million pro forma cash position, which includes gross proceeds from its recently closed$55 million senior secured debt financing, combined withTerrAscend's $103 million cash balance as ofSeptember 30, 2021 , positions the combined company to execute on its growth plans. Both companies have prudently managed their debt and expense levels, while entering into minimal sale leaseback transactions. This provides the Company with financial flexibility which is expected to drive above average long-term margins and cashflow.
NOTES: |
1 |
It is expected that the Gage shares will be halted after closing and the Canadian Securities Exchange will delist the Gage shares upon completion of the Transaction.
MIPA and Arrangement Agreement Amendments
In order to facilitate the closing of the Transaction for the benefit of both
The Amendments will permit the Transaction to close based on the regulatory approvals that have been, and are expected to be, received by the expected closing date. Following the closing, the parties will continue to work to obtain, and expect to receive, the requisite approvals for
The disinterested directors of each of the
A copy of the Amendments are filed and are available under
About
About Gage
Gage is innovating and curating the highest quality cannabis experiences possible for cannabis consumers in the state of
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This news release contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information contained in this press release may be identified by the use of words such as, "may", "would", "could", "will", "likely", "expect", "anticipate", "believe, "intend", "plan", "forecast", "project", "estimate", "outlook" and other similar expressions. Forward-looking statements in this press release include, but are not limited to, statements regarding the Company's goals regarding its financial position, value proposition, market position and business strategy. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management in light of management's experience and perception of trends, current conditions and expected developments, as well as other factors relevant in the circumstances, including assumptions in respect of current and future market conditions, the current and future regulatory environment, and the availability of licenses, approvals and permits.
Forward-looking statements in this news release include, but are not limited to: statements with respect to the anticipated completion of the Transaction and the timing for its completion; the satisfaction or waiver of remaining closing conditions which include, without limitation, approvals and closing conditions contained in the arrangement agreement and the MIPA (as amended); statements related to the combined company upon completion of the Transaction, including its retail footprint and cultivation facilities; statements related to the Amendments facilitating the closing of the Transaction; the anticipated delisting of Gage shares from the CSE; the acquisition of the Licensed Operators and the approvals related to same; and the operation of Gage's businesses pursuant to the services agreements in place with the Licensed Operators. Actual results and developments may differ materially from those contemplated by these statements.
Such forward-looking statements are based on certain assumptions regarding
Among other things, there can be no assurance that the Transaction will be completed or that the anticipated benefits from the Transaction will be achieved. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking information is subject to a variety of risks and uncertainties that could cause actual events or results to differ materially from those projected in the forward-looking information. Such risks and uncertainties include, but are not limited to, current and future market conditions; risks related to federal, state, provincial, territorial, local and foreign government laws, rules and regulations, including federal and state laws in
The statements in this press release are made as of the date of this release. Each of
SOURCE
© Canada Newswire, source