NEW YORK –TerrAscend Corp., a leading North American cannabis operator, today announced the signing of a definitive agreement to acquire HMS Health, LLC, and HMS Processing, LLC from Curaleaf Holdings, Inc. HMS is a cultivator and processor of medical cannabis products in the state of Maryland. The acquisition is expected to be immediately accretive to TerrAscend on an EBITDA basis.
HMS currently operates a 22,000 square foot cultivation and processing facility inFrederick, Maryland. Today, HMS produces dried flower and oil products for the medical cannabis market and has the capability to produce edibles upon regulatory approval. TerrAscend plans to significantly expand this existing capacity in the coming year. The majority of HMS’ employees are expected to join TerrAscend’s US operations.
“This acquisition enables TerrAscend to expand its footprint into another robust limited license medical cannabis market with strong, long-term growth potential,” saidJason Ackerman, Executive Chairman and Chief Executive Officer of TerrAscend. “By combining HMS with our industry leading scaled operations in the adjacent states ofPennsylvaniaandNew Jersey, we will leverage our strong management team and corporate support functions to drive economies of scale. We will also standardize cultivation practices, brand portfolio, and formulations to provide patients inMarylandwith the high-quality, medical-grade productsthat TerrAscend is known for producing.”
TerrAscend has agreed to acquire 100% of the equity of HMS from Curaleaf for a total consideration of$27.5 million, comprised of$25 millionin cash and a$2.5 millionnote which bears 5.0% annual interest, dueApril 2022. Upon closing in the first quarter of 2021, 100% of HMS’ economics will be retained by TerrAscend through full ownership of HMS Health, LLC and a master services agreement with HMS Processing, LLC. The transfer of 100% equity of HMS Processing is expected to close inApril 2022.
The Proposed Acquisition is subject to certain closing conditions, including approvals from regulatory authorities and there can be no assurance that the transaction will be completed.