Cannabis Operator TerrAscend Secures $140 million Loan

TerrAscend Corp., a Canadian-headquartered cannabis operator with U.S. assets, has closed on a $140 million senior secured term loan from FocusGrowth Asset Management, a leading capital provider to the marijuana sector, and other members of a loan syndicate.

According to a news release, the loan:

• Carries an interest rate of 12.75%.
• Matures in August 2028.
• Contains no prepayment penalties.
• Is guaranteed by TerrAscend.

The loan will be made in two parts:

• The first disbursement of $114 million will go to TerrAscend’s operations in California, Maryland and Pennsylvania. The company used the funding to retire debt at its Pennsylvania operations. If money is left over, it will be used for “potential M&A transactions focused on geographic expansion,” according to the release.
• The second draw of $26 million, expected in September 2024, will be used to retire debt at TerrAscend’s businesses in Michigan.

No warrants were issued as part of the loan.

“Completing this non-dilutive financing strengthens our balance sheet and provides us the financial flexibility to continue to execute on our growth strategy,” Jason Wild, TerrAscend’s executive chair, said in a statement.

“With this financing closed, we have no other material debt maturing until late 2027.”

In October 2022, TerrAscend’s subsidiaries in Maryland and New Jersey received a $45.5 million loan from Pelorus Equity.