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(This story has been updated to correct TerrAscend’s year-over-year revenue increase percentage and the university Jason Wild attended when he began investing.)

When Jason Wild, the executive chair of marijuana multistate operator TerrAscend Corp., and his team first approached potential investors earlier this year to raise $15 million to list on the Toronto Stock Exchange, he said hardly anyone was interested.

Wild even offered to let his brother-in-law, who has supported his ventures in the past, use his house in the Hamptons for six weeks for free instead of renting a place down the block for around $40,000 if the relative agreed to pump an additional $50,000 into TerrAscend.

Wild’s brother-in-law initially agreed but then reneged after talking it over with his wife, who told him the family couldn’t do it after all.

“‘We can’t lose any more money on cannabis,’” Wild recalled his brother-in-law saying in an interview with MJBizDaily.

A lot of investors are feeling the same way, Wild said – something that’s reflected in the low stock prices among publicly held U.S. operators.

Shares of the AdvisorShares Pure US Cannabis ETF – which includes big multistate operators and trades as MSOS on the New York Stock Exchange Arca – have fallen from around $20 in March 2022 to just below $5.

“If this is so hard for us, then it’s got to be impossible for others,” Wild would say to colleagues Ziad Ghanem, TerrAscend’s CEO, and Keith Stauffer, chief financial officer, on a daily conference call.

But Wild and his colleagues were able to raise $21 million in equity and senior unsecured convertible debentures in two tranches to meet the TSX’s listing requirements, largely through what he said were smaller checks for amounts between $10,000 and $50,000.

The company – which operates in Canada, California, Maryland, Michigan, New Jersey and Pennsylvania – completed its corporate restructure, also required by the TSX.

On July 4, TerrAscend became the first U.S. plant-touching company to list on the third-largest stock exchange in North America, trading as TSND.

The move could give the company access to a deeper pool of institutional investors, and already, big financial institutions such as Morgan Stanley have removed the company from its “restricted” list of marijuana-related businesses.

Other companies could follow. New York-based Curaleaf Holdings, for example, is watching closely and could follow suit.

On TerrAscend’s earnings call for the quarter ending June 30, Wild and his team celebrated the company’s “transformative” year, citing achievements such as:

The company’s net loss was $12.9 million compared with $19.2 million in the first quarter and a net income of $16.9 million in the second quarter of 2022.

Andrew Parthenious, a research analyst for Quebec-based financial services company Stifel, wrote in an Aug. 10 newsletter that TerrAscend “has transformed into a growth story which is scarce in this industry.”

Pioneering Canadian cannabis

Wild, 50, first became interested in legal cannabis as an investor.

He started investing in his last year of pharmacy school at the Arnold & Marie Schwartz College of Pharmacy and Health Sciences in the Brooklyn borough of New York City while following in the footsteps of his pharmacist dad, who ran pharmacies in New York.

His college roommate lent him books by investing legend Peter Lynch, and Wild began taking his advice to “buy what you know,” focusing on the pharmaceutical and health sectors.

In his first year as a pharmacist, Wild said he earned $60,000 and managed to put $20,000 into his Charles Schwab account for investing purposes.

He said that year he earned more than $400,000 from those investments and started to see that he had a gift for picking drug stocks.

Wild continued working as a pharmacist in New Jersey as he started his own fund, JW Asset Management.

JW Asset Management grew its assets from the tens of thousands to the tens of millions and eventually bought a company called Arbor Pharmaceuticals in 2010 for $2 million.

Arbor’s sales grew from $2 million to $127 million in its first year.

Wild’s fund later sold a third of the company to private equity firm KKR & Co.

It was around that time that Wild heard that Canada was legalizing medical cannabis.

“I’ve been a fan of cannabis since I was 20 years old or something like that, at college, and I’d never been to a grow,” Wild said.

He toured regulated medical cannabis cultivation facilities north of the border, and JW Asset Management became one of the first American institutional investors in Canadian legal cannabis, investing in companies such as Cronos Group and Mettrum, which later became a brand of Canopy Growth Corp.

After getting to know the cannabis landscape and its players, Wild said he told former Canopy CEO Bruce Linton that he believed he could join the competition and be more hands-on.

“I said to Bruce, ‘I think that if I started something from scratch or we funded something from scratch, we could do like an Arbor 2.0 or something like that,’” Wild said.

“It just seemed like there was no competition.”

In 2017, Wild convinced one of the Canadian companies his fund had invested in, TerrAscend, to take a private placement of 52.5 million Canadian dollars from him and Canopy Growth.

Wild became chair of the company and made its first U.S. cannabis acquisition in 2019, buying a San Francisco cannabis chain, The Apothecarium.

TerrAscend has since grown its U.S. operations to five state markets, leading the competition in market share in many of those states.

Uphill battle ahead

In the large, lucrative New Jersey market, TerrAscend has maintained its top-three share position and increased its margins to more than 50%, largely through increasing its cannabis yields.

It’s still early days in Maryland, where adult-use sales got off to a strong start after launching in July.

In Pennsylvania, the company plans to continue to run lean operations in the state’s medical market until adult-use marijuana is legalized – assuming it is indeed legalized.

It’s in competitive and oversaturated Michigan that TerrAscend could be most impressive, growing sales in its 19 stores by 6% from the previous quarter and developing consumer loyalty to its Gage and Cookies stores.

CEO Ziad Ghanem said in an interview with MJBizDaily that part of what’s driving those increases is thinking more carefully about various types of consumer segments in different regions of the state.

Michigan borders Indiana, Ohio and Wisconsin.

Indiana and Wisconsin have no legal marijuana markets, and Ohio’s is currently medical only.

Ghanem said stores close to the border have a different product mix than urban stores – for example, with premium products such as Cookies being a hot commodity among curious cross-border buyers.

Those border-store consumers also take less frequent trips but also want to buy more – meaning bulk and value are important to prioritize in those stores as well.

“We’re looking for those insights and making decisions based on that data,” Ghanem said.

Despite the company’s accomplishments thus far, the remainder of 2023 and 2024 will be the true test of whether TerrAscend is positioned for success.

Wild has repeatedly said on earnings calls and media interviews that the TSX listing isn’t a “magic bullet” that will immediately solve problems around raising capital.

But he told MJBizDaily he believes the listing is already making some crucial incremental progress.

For example, Morgan Stanley and BNY Mellon have removed the ban on providing custodial services for the company’s TSX listing, which could improve its chances of securing the institutional investment it hopes for in an upcoming road show.

The slow pace of federal marijuana reform and disappointing returns so far have scared a lot of investors away from the industry in recent years, and it’s far from certain the TSX listing will generate institutional investors’ interest in TerrAscend.

Firms will need to decide whether investing fits within their compliance, Wild said, but at least he knows the ban won’t get in the way if TerrAscend can attract interest.

“We’ve got what we think is a really good growth story out of this,” he said.

“I’m super grateful that we’re not where we were a year ago. where we got this thing that people thought might be good but we weren’t able to go in there and tell them.”

Kate Robertson can be reached at kate.robertson@mjbizdaily.com.