Many cannabis companies have reported impressive earnings figures over the past few weeks, despite most of them still not operating profitably. TerrAscend Corp (TSXV: TER) announced today that it’s projecting that revenues for 2019 will exceed C$135 million, an exceedingly impressive sum for a company with a market cap of $750 million.
The largest reason for this spike in revenue comes from the acquisition of “The Apothecarium” earlier this year. The $118 million acquisition of the company brought along with it a significant retail presence along the west coast, holding ten licenses in California alone. Last year, the brand made around $45 million in revenues, with this figure only expected to grow in 2019 and will likely comprise the largest part of TerrAscend’s 2019 revenue projections.
“We are seeing the results of the foundation we laid in 2018. Our team is focused on operational excellence in our facilities across North America, continuing to procure new licenses across the US through greenfield license applications and strategic acquisitions of existing operations,” said TerrAscend President Matthew Johnson. “On behalf of all of the employees of TerrAscend, we pledge to continue our hard work and efforts in our goal of exceeding patient, customer and stakeholder expectations.”
TerrAscend also expects worldwide sales growth of hemp-derived, CBD-based products in global markets such a Germany to spike this year as the company acquires their GMP certifications. The company will announce its 2018 annual audited financial statements on April 24, with many analysts paying close attention to the results.
Many experts consider TerrAscend to be one of the more promising Canadian cannabis companies that haven’t reached $1 billion in market cap yet. Earlier in March, Clarus Securities analyst Noel Atkinson went on to predict that TerrAscend had a 71 percent upside in the coming months, issuing a “speculative buy” rating on the company and gave it a C$12.50 per share target price.
“TerrAscend Corp is one of the first Canadian cannabis licensed producers to leverage its experience and access to capital to aggressively expand into the US. We believe the company’s cannabis and hemp CBD platforms position it to be an industry leader on both sides of the border,” said Atkinson. “The acquisition of hemp CBD company Arise Bioscience and pending purchase of The Apothecarium dispensary chain will provide at least US$60 million of annual sales. This should catapult TerrAscend to being a top ten cannabis stock by US quarterly revenue.” The analyst previously estimated that TerrAscend’s 2019 revenue would be in the $96.7 million range, well below what the company now announced. By 2021, Atkinson predicts revenues to spike to $515.8 million in revenue. Based on current multiples, TerrAscend’s market cap would jump to around $3 billion if not more.
In response to today’s news, shares of TerrAscend spiked four percent this morning, settling at C$7.95 per share. While recovering slightly in January, shares of the company have been slowly declining over the past quarter. Most experts regard this as a good buying time for shareholders interested in the next wave of surging cannabis stocks in the years to come as many mid-sized marijuana companies are poised to explode in 2019 and 2020.
