TerrAscend Corp., a Mississauga, Canada-based multi-state cannabis operator, announced it has entered an agreement to acquire all issued and outstanding subordinate shares of Detroit’s Gage Growth Corp., a leading cannabis brand and operator, for approximately $545 million.
Upon completion of the transaction, the combined business will have operations in five states and Canada, including seven cultivation and processing facilities and 23 operating dispensaries serving both medical and adult-use cannabis markets.
“The acquisition of Gage expands our footprint to the third largest cannabis market in the U.S.,” says Jason Wild, executive chairman of TerrAscend. “Combining our market-leading share in our existing states with Gage’s proven cultivation, retail, and marketing capabilities, creates one of the largest and most dynamic companies in the industry.
“We look forward to leveraging Gage’s profound connection with Michigan’s consumers, in addition to its established partnerships with award-winning brands like COOKIES, to provide our patients and customers with best-in-class product offerings and retail experiences.”
The transaction combines management teams with strong track records in building leading businesses in a competitive market. TerrAscend expects to leverage Gage’s portfolio of more than 40 flower strains in addition to brand and marketing capabilities at retail locations in other states.
The combined company currently operates 23 dispensaries across five states, with Gage operating 10 location in Michigan. TerrAscend operates 13 dispensaries currently, and expects to open a 14th in Lodi, N.J., in the fourth quarter. Gage is expected to open 10 additional dispensaries across Michigan in the coming months.
“Our shared strategic and corporate values make this combination a strong fit,” says Fabian Monaco, CEO of Gage. “We also recognize the incredible success that TerrAscend has enjoyed in recent years. We could think of no better company to partner with as we execute on our shared strategy of deep vertical integration and scale in our core markets, with a vision of creating the most consumer-centric cannabis company in the world.”
Under the terms of the arrangement agreement, TerrAscend will acquire all of the issued and outstanding Gage shares, with each Gage shareholder receiving 0.3001 of a common share in the capital of TerrAscend for each Gage share, implying a price per Gage Share of $2.11, which represents an 18 percent premium based on the closing prices of both companies shares on Aug. 31, 2021.