TerrAscend Corp. announced in a press release on June 30 that it has completed a strategic review of its Michigan business operations and decided to exit the Michigan market.
“After an extensive evaluation, we have made the strategic decision to exit the Michigan market,” said Jason Wild, Executive Chairman of TerrAscend. “Michigan is an extremely difficult market and we have come to the realization that our resources can be better utilized in our other markets. This move will unlock value for TerrAscend and its shareholders. By concentrating our efforts and resources in the Company’s core northeastern U.S. markets—New Jersey, Maryland, Pennsylvania, and Ohio—I am confident that we are now positioned to deliver stronger financial performance including improved margins and operational efficiencies.”
As part of the exit plan, TerrAscend and its consolidated entities (collectively, the “Company”) intend to sell or divest all of the Company’s Michigan assets, including four cultivation and processing facilities, twenty retail dispensaries, and real estate. Net proceeds from the divestitures will be used to pay down existing Company debt. T
The Michigan exit is expected to be substantially completed in the second half of 2025. The Company’s business in Michigan will be reported as discontinued operations beginning with the Company’s financial results for the second quarter of 2025.
Following the completion of the Michigan exit, the Company will operate nineteen dispensaries and four cultivation and processing facilities across five states, including New Jersey, Maryland, Pennsylvania, Ohio, and California, and in Toronto, Ontario. The strategic move is expected to meaningfully enhance TerrAscend’s financial profile. The Company anticipates improvements across key metrics on a consolidated basis, including gross margin, adjusted EBITDA, and cash flow conversion, in addition to a strengthened balance sheet.
The actions associated with the Michigan exit plan are expected to include a reduction of approximately 21% of the Company’s overall workforce, which consists of about 1,200 employees as of June 30, 2025. Most of this reduction is expected to occur by the end of the third quarter of fiscal year 2025.
For more information visit www.terrascend.com.
Caution Regarding Cannabis Operations in the United States
Investors should note that there are significant legal restrictions and regulations that govern the cannabis industry in the United States. Cannabis remains a Schedule I drug under the U.S. Controlled Substances Act, making it illegal under federal law in the United States to, among other things, cultivate, distribute or possess cannabis in the United States. Financial transactions involving proceeds generated by, or intended to promote, cannabis-related business activities in the United States may form the basis for prosecution under applicable U.S. federal money laundering legislation.
While the approach to enforcement of such laws by the federal government in the United States has trended toward non-enforcement against individuals and businesses that comply with medical or adult-use cannabis programs in states where such programs are legal, strict compliance with state laws with respect to cannabis will neither absolve TerrAscend of liability under U.S. federal law, nor will it provide a defense to any federal proceeding which may be brought against TerrAscend. The enforcement of federal laws in the United States is a significant risk to the business of TerrAscend and any proceedings brought against TerrAscend thereunder may adversely affect TerrAscend’s operations and financial performance.
