Gage Growth Corp., a leading cannabis brand and operator based in Detroit, reported its first financial results since announcing the company’s shareholders approved the sale to Canada’s TerrAscend, showing a revenue of $27.2 million in the third quarter of 2021.
This was a record third quarter for the company, marking an increase of 119.6 percent year-over-year revenue growth and a 3.2 percent jump from the last quarter. Its gross profit of $9.9 million was up from $9 million in the second quarter of 2021.
“In the third quarter of 2021, Gage had a record performance across all financial and operating metrics,” says Fabian Monaco, CEO of Gage. “We will continue to invest while improving our margins. Moreover, as we further introduce our in-house branded concentrate products, we expect our gross margin to further improve over the next two quarters.”
Along with the increase to 11 cultivation facilities — three Gage operated and eight contracted cultivation assets — the company released its in house brand vape cartridges in October, which accounted for nearly 80 percent of overall vape cartridge sales so far in November by Gage.
“We are very pleased with the announcement of the proposed acquisition of Gage by TerrAscend,” says Monaco. “Our shared strategic and corporate values make this combination a strong fit, and I am extremely excited and looking forward to executing on our shared strategy of deep vertical integration and scale in our core markets. In addition, I am also very pleased with the closing of our recent debt financing which further strengthens our balance sheet.”
The company closed on a senior secured term loan for $55 million, which it will use to finance its retail acquisition strategy in Michigan to support future growth, as well as for working capital purposes.
In addition to 10 retail dispensaries in operation today, Gage is in active discussions with multiple retail operators in Michigan to potentially acquire more than 10 retail locations in the coming months. One acquisition in Sturgis is expected to close by the end of November.
“Overall, we will continue to execute on our growth strategy in the remaining months of 2021 and into 2022,” says Monaco. “With a strong balance sheet, we are well positioned to execute on our near-term acquisition opportunities that will fuel the overall growth of the company.”