As the holiday season goes on and a new year coming just around the corner, another significant Canadian cannabis company has announced that is will be moving into the now legal U.S. hemp market.
Toronto-based TerrAscend Corp (OTCMKTS: TRSSF) announced today that it had signed an agreement to acquire another U.S. hemp company Grander Distribution, effectively entering the U.S. market.
As a producer and distributor of hemp-derived wellness products, Grander’s hemp products are cultivated entirely in the U.S. and are currently available in over 10,000 retail locations across the world. By the end of 2018, the company expects 2018 sales to exceed $10,000,000.
TerrAscend ended up spending USD $13,000,000 to purchase Grander, a valuation that is a combination of cash and stock with a potential bonus of up to $10,000,000 based on them meeting their 2019 and 2020 revenue targets. The arranged transaction is expected to be completed by mid-January 2019.
“We are thrilled to welcome the Grander team and look forward to leveraging their expansive distribution and branding expertise as we complete the first acquisition of our US strategy,” said TerrAscend President Matthew Johnson. “In addition to their seasoned sales force, Grander has a proven track record of driving the development, manufacturing and processing of innovative hemp-derived cannabinoid products.”
With the recent implementation of the Hemp Farming Act of 2018, analysts have predicted that the CBD-hemp product could be worth as much as $600 million over the next few years. As such, many Canadian companies are expected to begin shifting southwards to operate in the U.S. market.
“We couldn’t be more excited to join forces with TerrAscend,” added Grander CEO Scott Frohman. “The collaboration of talent and expertise across the combined organization will give TerrAscend a significant competitive advantage in developing, marketing, and supplying the most cutting-edge products in the hemp-derived cannabinoid market.”
In response to the news, TerrAscend stock shares increased mildly today, increasing by 3.9 percent. Other mainstream cannabis stocks, such as Aurora (NYSE: ACB) and Canopy Growth Corp (NYSE: CGC), have also gone up mildly in value today, inching up a couple of percentage points. In comparison, the Dow Jones dropped 653 points today in what is now seen as the worst Christmas eve loss in its history.
TerraAscend Corp Company Profile
TerrAscend is a biopharmaceutical and wellness company that is committed to quality products, brands and services for the global cannabinoid market. TerrAscend provides support to patients and consumers through its wholly-owned subsidiaries, TerrAscend Canada Inc., a licensed producer of cannabis pursuant to the Cannabis Regulations under the Cannabis Act (Canada) that provides medical cannabis to patients through its online medical marketplace Solace Health, and Solace Health Network Inc., a clinical support program and education platform led by healthcare professionals.
TerrAscend participates in the legal adult-use market in Canada through direct and indirect supply agreements in several provinces and intends to expand into the US market in states where cannabinoids have been legalized for therapeutic or adult-use. TerrAscend also launched Ascendant Labs, a company committed to the continuous improvement of cannabinoid expressing plants, which is a strategic joint venture with leading researchers Cistron Corp. – TerrAscend