TerrAscend Corp. (TSX: TSND, OTCQX: TSNDF) is making a move that could reshape its financial landscape for the next several years. The North American cannabis company has closed on an upsize to its senior secured syndicated term loan, bringing in $79 million to retire existing debt and fuel future initiatives. Here’s a look at what’s happening behind the scenes, why it matters, and what it could mean for the company’s next chapter.
The $79 million loan, led by FocusGrowth Asset Management, comes with an interest rate of 12.75% and matures in August 2028. There are no prepayment penalties, and the loan is guaranteed by TerrAscend. Importantly, the company didn’t issue any warrants as part of this deal.
Of the $79 million, $68 million was used to retire debt with other lenders. The remaining funds are earmarked for growth initiatives, including potential mergers and acquisitions. On top of that, TerrAscend has secured access to an additional uncommitted term loan facility of up to $35 million for future M&A activity.
Debt in the cannabis industry is notoriously expensive, and access to capital can be a challenge. By locking in this loan, TerrAscend has extended the maturity of most of its debt to late 2028, giving it breathing room to focus on growth without worrying about near-term repayments.
Jason Wild, TerrAscend’s Executive Chairman, noted that the deal extends the company’s debt maturity and provides capital for growth initiatives. He also highlighted the partnership with FocusGrowth, emphasizing the lender’s confidence in TerrAscend’s strategy and vision.
FocusGrowth’s Peter Bio echoed this sentiment, pointing to TerrAscend’s established presence in multiple states and the opportunities for expansion in both new and existing markets.
The transaction also qualifies as a “related party transaction” under Canadian securities regulations. Jason Wild, an insider at TerrAscend, invested about $1.6 million as part of the loan syndicate. However, because the investment is below 25% of the company’s market capitalization, TerrAscend was able to rely on exemptions from certain valuation and shareholder approval requirements.
TerrAscend operates across the North American cannabis sector, with businesses in Pennsylvania, New Jersey, Maryland, Ohio, Michigan, and California. In Canada, it runs retail operations under brands like The Apothecarium and Gage. The company is involved in cultivation, processing, and manufacturing, supplying both medical and adult-use cannabis markets. Its portfolio includes brands such as Cookies, Lemonnade, Ilera Healthcare, Kind Tree, Legend, State Flower, Wana, and Valhalla Confections.
With this loan, TerrAscend is set up to retire expensive debt and pursue new opportunities. The additional $35 million facility for M&A could open doors for expansion or strategic partnerships, depending on how the cannabis landscape evolves over the next few years. The new debt structure also gives TerrAscend a longer runway to focus on its core operations and growth plans.
TerrAscend’s latest financing move is more than just a balance sheet shuffle. It’s a calculated step to manage debt, unlock new growth, and stay competitive in a sector where access to capital is often a hurdle.
