TerrAscend has acquired Union Chill Cannabis Company in New Jersey, enhancing its retail presence to four dispensaries and leveraging Union Chill's $11 million annual revenue for immediate financial benefits.

Information on the Target

TerrAscend Corp. has successfully completed its acquisition of Union Chill Cannabis Company LLC, a well-established dispensary located in Hunterdon County, New Jersey. This strategic transaction expands TerrAscend's retail presence in New Jersey to four dispensaries, significantly enhancing its market dominance. Union Chill is notable for its robust operational performance, generating over $11 million in annualized revenue, and is projected to contribute positively to the company’s EBITDA and overall cash flow immediately.

The acquisition, valued at $13 million, consists of a combination of $9 million in convertible notes with an interest rate of 6.5% and an additional $4 million cash contingent upon the exercise of the option to purchase 35% of Union Chill. This agreement aligns with New Jersey's regulatory framework, which promotes investments in diversity-owned businesses, thus enabling TerrAscend to fully consolidate Union Chill upon the exercise of the aforementioned option, and broaden its operations to a total of 20 dispensaries across New Jersey and several other U.S. states and Canada.

Industry Overview in New Jersey

The cannabis industry in New Jersey has experienced significant growth following the legalization of recreational cannabis in 2020. The state’s regulatory framework supports a competitive market that fosters business growth and investment, particularly for retail cannabis dispensaries. New Jersey ha