Toronto-based cannabis company TerrAscend Corp. is closing Thursday on its acquisition of one of the largest sellers in Michigan, Gage Growth Corp.
The deal, announced this fall, is a major example of how rapid consolidation in the national cannabis industry coming to Michigan. TerrAscend operates in Canada and four U.S. states, the addition of Gage bringing that total up to five. It’s still a smaller operation compared with a giant like Curaleaf Holdings Inc. that’s in 23 states, but it’s a big fish in the Michigan pond.
Under the deal, TerrAscend will expand to seven grows and 25 dispensaries: 11 Gage retail locations in Michigan, one Gage location under the West Coast brand Cookies in Canada and TerrAscend’s 13 existing locations. TerrAscend plans to get to 40 stores by the end of the year.
“This is a defining moment for TerrAscend as we combine two leading vertically integrated operators with proven cultivation and manufacturing expertise, deep portfolios of proprietary flower strains, and top-selling brands across our core markets,” Jason Wild, TerrAscend’s executive chairman, said in the release.
Gage comes to the deal with $72.3 million in cash, including proceeds from its November $55 million senior secured term loan to finance retail acquisition plans after the TerrAscend deal.
“Together with TerrAscend, we are committed to building one of the most dominant cannabis companies in Michigan. With the closing of this debt financing, we are well positioned to execute swiftly and drive value for our shareholders,” Gage CEO Fabian Monaco said in a news release at the time.
The deal makes sense to help propel the Gage brand into more markets and garner more access to capital, Monaco told Crain’s in September.
Gage is listed on the Canadian Securities Exchange and is expected to de-list once the sale is complete. The company has its corporate headquarters in Toronto, according to filings with the federal government, but operates the large bulk of its operations out of offices in Troy.
TerrAscend had a cash balance of $103 million as of Sept. 30. It trades on the Canadian Securities Exchange and off-exchange in the U.S.
Gage and TerrAscend had to agree to some amendments to the deal, allowing it to close based on regulatory approvals that should be secured by the closing date, the release said. TerrAscend isn’t expected to get approval for acquiring all Gage’s operations until after the closing, though, and until then a subsidiary of TerrAscend plans to “operate the Gage business through existing service agreements,” according to the release.
The state of Michigan is becoming a big contender in the cannabis industry, now housing the third highest number of marijuana workers in the country, per data gathered by Seattle-based Leafly.
The number of jobs in Michigan’s marijuana industry rose 72 percent over the last year to 31,152 as of January, according to Leafly. It’s behind only California and Colorado.
Michigan racked up $1.79 billion in pot sales in 2021.
Recent Comments