Latest news with #TerrAscend
Chicago Tribune
5 days ago
- Business
- Chicago Tribune
Buzz wears off for Michigan's marijuana businesses
When Greenhouse of Walled Lake, Michigan, opened in 2019, it catered to Michigan's medical marijuana market, and business was booming. Recreational marijuana sales began later that year statewide, opening the door to new customers — and competitors. As the state's cannabis market took off, new operators flooded in and profit margins thinned. 'We're oversaturated,' said Jerry Millen, owner of Greenhouse. 'Too much product, too many stores to the point where people are just giving the product away.' Michigan's marijuana industry is showing signs of strain as companies deal with oversupply, falling prices and tightening margins. And it's forcing some operators to scale back or shut down entirely: the most notable recent retreat from the once-booming Michigan market is Canadian cannabis giant TerrAscend. In late June, the publicly traded corporation announced its 'strategic exit' from Michigan, declaring it intended to sell or divest all its assets in the state, which include four growing facilities, 20 dispensaries and real estate. The net proceeds from that pullback, the company said, would be used to pay down its debt. TerrAscend officials declined comment for this story. However, in the company's June statement, Executive Chairman Jason Wild said: 'Michigan is an extremely difficult market and we have to come to the realization that our resources can be better utilized in other markets. This move will unlock value for TerrAscend and its shareholders.' The industry's retreat has hit the college town of Ann Arbor, too. Dispensaries Arbors Wellness, Leaf and Bud, and Misty Mountain have all recently closed. TerrAscend's Cookies location in Ann Arbor is set to close on Aug. 31, a front desk worker said. Sales slump According to Michigan's Cannabis Regulatory Agency, in June 2025, both medical and adult-use recreational marijuana sales declined from the previous month. Medical sales fell 12%, from $553,315 in May to $487,087 in June. Adult-use sales dropped 4.2%, from $272.1 million to $260.6 million for the same period. Combined cannabis sales totaled $261.1 million in June, down $11.5 million, or 4.2%, from May. For the first six months of 2025, total cannabis sales were $1.58 billion, down $10.4 million, or 0.7%, from the same period in 2024. Adult-use sales totaled $1.57 billion, compared to $1.58 billion the year before. Medical sales dropped sharply, falling 72% from $12.7 million in the first half of 2024 to $3.5 million in 2025. A slowdown in sales could be due to a number of factors, said Aidan Bergsman, data scientist and senior analyst for Anderson Economic Group. Cannabis sales in Michigan began to plateau around August 2024, coinciding with the launch of Ohio's recreational market. 'You had a lot of Ohio residents crossing over to Michigan, especially for adult-use products,' Bergsman said. 'When Ohio legalized and implemented their program, that cross-border activity decreased, and that definitely shows up in Michigan's numbers.' There's also a shift from traditional retail outlets toward home cultivation and getting cannabis from friends or family, he said. There also might be cases where consumers are choosing between marijuana and alcoholic beverages, due to limited budgets. 'Consumers only have so much that they're spending on these types of products,' he said. What's left are too many marijuana businesses for too few customers. As a result, some companies feel pressure to reduce prices or to sell inferior products, said Greenhouse's Millen. That's not sustainable. 'You get what you pay for,' he said. 'If people want cheap weed, I get it, I get it. But there's a lot of good products out there that are not super cheap, but they're a better product. And I think you get what you pay for.' Millen said revenue at his store has fallen about 50% so far, with profits down about 70% over a two-year period. He's been able to maintain his business due to a loyal customer base. 'I'm just glad that we're profitable,' he said. 'Because 90% of these people in Michigan right now, I guarantee you are not profitable. And how long can that sustain for? Everybody's waiting for the big break. What's the big break? The big break is going to be when half the businesses go out, unfortunately. And it's going to happen.' Vendors are begging him to carry their products, he said: 'I feel terrible that I can't buy it. Because if I can't sell it, I can't buy it.' Nick Hannawa, vice president and part-owner of Puff Cannabis, said prices have dropped significantly, allowing customers to buy much more for the same amount of money compared to a few years ago. The company has 11 dispensaries in Michigan, according to its website. 'One vape purchase back in 2019, let's say, it was $50,' he said. 'Today, that same vape cartridge, you can get six of them for $50. Let's say that $100 that you spent in a retail store in 2019, 2020 — that $100 would be max four items. Today that same $100 will get you 10 items, for example. Whether that's gummies, whether that's vapes, whether that's chocolate bars or joints, or whatever it may be.' Puff Cannabis started in Bay City in 2019, when the market was still limited and few licenses were issued. It was among the first recreational cannabis stores in the state, which helped attract customers from across Michigan and neighboring states, Hannawa said. 'We've been able to weather the storm,' he said. 'Puff has been able to weather the storm because we do high volume, and we built a culture and a brand that people come back to. Like our Puff rewards program is a big deal, so we're able to retain the customer.' 'Not a good look' TerrAscend said its exit from Michigan would likely be completed by the 'second half of 2025.' It comes with a 21% downsizing of the firm's 1,200-person workforce. The company operates 20 dispensaries and four cultivation sites across the state, including locations in Detroit, Ferndale, Warren and Harrison Township. Wild said the company would pivot to concentrating its 'efforts and resources in the Company's core northeastern U.S. markets,' of New Jersey, Maryland, Pennsylvania and Ohio. Several TerrAscend dispensaries are preparing to close across Metro Detroit. An employee at Cookies in Oxford said the store's last day was July 30. Staff at Lemonnade in Center Line and Gage Cannabis in Adrian said their locations will close on Aug. 31. A front-desk worker at Cookies Detroit said she wasn't sure when that location would shut down. Departures like TerrAscend's hurt Michigan's image, Hannawa said: 'For this big publicly traded company to come in and do this and then have to exit out of the market, it's not a good look for us. It doesn't put the Michigan market in a good light, because it's showing that it's weak, because these guys are leaving.' Pricing has a big impact. The decline in pricing not only impacts retailers, Hannawa said, but it also affects growers and processors because they're forced to sell their products for cheap. The drop in prices also slows repeat business because customers don't have to visit the store as often. 'We don't want to see growers shuttering their doors,' he said. 'We don't want to see processors losing money or farmers losing money. We kind of want everyone to be successful.' A 'very difficult market' Kevin Sabet is the director of the advocacy organization Smart Approaches to Marijuana, which aims to curb the commercialization of marijuana. The group likens the marijuana industry to 'Big Tobacco,' arguing it prioritizes profits over consumers' health as cannabis products become increasingly potent. The retreat from the Michigan market by cannabis giants is consistent with a national trend, Sabet said. General oversaturation of the country's marijuana market is causing similar pullbacks in other states previously seen as gold mines for legal cannabis sellers, like California. Part of the issue is inherent to the plant, he said. The marijuana market is 'very difficult' because the plant 'grows everywhere.' 'That's why it's called 'weed,'' Sabet said. Another challenge, he said, is that legal marijuana sellers must compete with black-market sellers, who don't face regulatory burdens like licensing and taxes. Those illegal sellers include criminal enterprises based in foreign countries like Mexico, Colombia and China that run illegal 'grow operations' in the United States and traffic the product here. 'So if you were going to be able to have illegal entities undercut the taxed, legal product, you were going to have a successful business on the illegal side,' Sabet said. Sabet, who served as a drug policy adviser to three U.S. presidents, said he and others could see the marijuana industry's woes coming from a 'mile away.' 'We've never regulated something dangerous very well in this country,' he said. Ideas for aiding the industry As challenges continue, Michigan's cannabis business owners have a few ideas for how to help the industry. Hannawa said he would like to see the state act to stabilize Michigan's cannabis market. He wants to see price increases so businesses can remain profitable and a halt to new licenses. 'Giving out more licenses in Michigan doesn't make any sense anymore,' he said. 'We have enough processors. We have enough growers.' Millen said he would like to see federal legalization, which would result in tax savings for marijuana businesses. He said there should be fewer licenses and stores, with support for knowledgeable local businesses rather than corporate operators. He's also calling for lawmakers to work with industry entrepreneurs to create fair, realistic regulations: 'The lawmakers need to sit down with people like myself and other good players for this industry, and talk to us about what needs to change.' Millen also has a message for consumers. 'Find out who and where you're buying your cannabis from and what they stand for,' he said. 'If you truly believe in what you're buying, you should know that you're buying from good people.'
Yahoo
10-07-2025
- Business
- Yahoo
New claims for unemployment insurance jump as automakers idle plants for summer shutdowns
New weekly unemployment claims in Michigan rose by 130% last week compared with the week prior, the U.S. Department of Labor said on July 10, as automotive companies shut down manufacturing plants for the typical summer shutdowns. New claims, a proxy for layoffs, rose to 15,581 in the week ending July 5, compared with 6,783 the week before, the labor department said. A year ago at this time there were 17,675 new claims for unemployment benefits in Michigan, according to labor department data. Overall, there were 227,000 seasonally adjusted initial claims for unemployment benefits in the U.S. last week, a decrease of 5,000 claims compared with the week prior. New claims for jobless benefits in Michigan often spike in the weeks surrounding the July 4 holiday as automakers use that time for retooling or maintenance. Nick Assendelft, a spokesperson for Michigan's Unemployment Insurance Agency, confirmed that the increase in claims is seasonal and is "related to manufacturing jobs and retooling in the auto industry." Michigan's unemployment rate has inched up in the last few years after reaching its low point post-pandemic of 3.7% in May 2023, and has hovered above 5% since last August. The state's rate is higher than the average U.S. rate of 4.2%. Most recently, Michigan's unemployment rate edged down slightly to 5.4% in May after months of increases. More details on June's unemployment rate are expected to be released on July 17. More on the state's jobless rate in May: Michigan's unemployment rate drops slightly in May but is still above U.S. average There are signs that's Michigan unemployment rate could remain at these elevated levels in upcoming months. More than 230 employees of the publicly traded cannabis company TerrAscend Corp. in Michigan will lose their jobs this year as the company, which owns brands such as Gage Cannabis and Cookies, pulls out of the Michigan market, according to a WARN Act notice filed recently with the state. More on why TerrAscend is leaving: Cannabis giant TerrAscend to exit Michigan market, closing 20 stores and cutting 230 jobs Meanwhile, Blue Cross Blue Shield of Michigan laid off nearly 220 nonunion employees and eliminated more than 400 open positions in June, and is looking to cut $285 million in administrative costs this year. Michigan State University said late last month that it plans to lay off some faculty and staff as it battles rising costs and shrinking revenue. Contact Adrienne Roberts: amroberts@ This article originally appeared on Detroit Free Press: Unemployment benefit claims spike as auto plants take summer shutdown
Miami Herald
09-07-2025
- Business
- Miami Herald
Controversial retail chain closing 20 stores with no warning
Sometimes the gold rush never actually happens. There may be gold "in them there hills," but mining it might be too expensive or the quality of the ore may not be worth extracting it. In many ways, while certain opportunities seem. like they're incredibly lucrative it become a case of "is the squeeze worth the juice?" Related: Another popular movie theater chain files Chapter 11 bankruptcy There are a lot of good ideas that can be ruined by too many players entering the market. The first self-serve frozen yogurt place in your town was likely a huge hit, until another opened, leaving both on life support, and then a third killed the territory. Even complicated businesses like Lyft and Uber sabotage each other. One ride service would have pricing power and be able to make sure every ride was profitable. Once you add a second player, it becomes a pricing race to the bottom. That's why services like food delivery have struggled to actually make money. Don't miss the move: Subscribe to TheStreet's free daily newsletter We want them and use them, but have very little allegiance, so margins remain thin or non-existent. Even the cannabis space, where competition has been at east somewhat regulated in most markets has cannibalized itself. Legal dispensaries not only compete against each other, but also the illegal which never really went anywhere. Cannabis has become a commodity. It's very hard to differentiate your brand and even big-name players like MedMen ended up filing Chapter 11 bankruptcy. You could argue that only Planet 13 (PLNHF) , and there only really the Las Vegas location, has carved out a brand-name market aside from celebrities that lend their names to products. "TerrAscend is a leading TSX-listed cannabis company with interests across North America, including vertically integrated operations in Pennsylvania, New Jersey, Maryland, Michigan, and California through TerrAscend Growth Corp. and retail operations in Ohio as well as in Canada through TerrAscend Canada, Inc," according to its website. Bankruptcy news: Iconic auto repair chain franchise files Chapter 11 bankruptcyPopular beer brand closes down and files Chapter 7 bankruptcyPopular vodka and gin brand files for Chapter 11 bankruptcy The company has a long history for what has been a very transient space. "Founded in 2017, Jason Wild co-led a major investment with Canopy Growth, launching TerrAscend as a Canadian LP. We pivoted operations to the US in 2018, gaining a vertically integrated license in New Jersey. Over the next several years, we grew our operations through the acquisition of cultivation and manufacturing facilities and dispensaries in California, Pennsylvania, Maryland, Michigan, and New Jersey," it added. Now, the company has made a difficult decision to leave one major market. TerrAscend has completed a strategic review of its Michigan business operations and decided to exit the Michigan market. As part of the exit plan, TerrAscend intends to sell or divest all of the Company's Michigan assets, including four cultivation and processing facilities, 20 retail dispensaries, and real estate. Net proceeds from the divestitures will be used to pay down existing company debt. The Michigan exit is expected to be substantially completed in the second half of 2025. TerrAscend's business in Michigan will be reported as discontinued operations beginning with the Company's financial results for the second quarter of 2025. "After an extensive evaluation, we have made the strategic decision to exit the Michigan market," said CEO Jason Wild. "Michigan is an extremely difficult market and we have come to the realization that our resources can be better utilized in our other markets." Following the completion of the Michigan exit, the company will operate 19 dispensaries and four cultivation and processing facilities across five states, including New Jersey, Maryland, Pennsylvania, Ohio, and California, and in Toronto, Ontario. Related: Major retail chain supplier files for bankruptcy liquidation About 21% of the TerrAscend's workforce, or about 1,200 people will lose their jobs as part of the change. "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," Wild added. The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Newsweek
09-07-2025
- Business
- Newsweek
Cannabis Giant Announces Major Cuts: 'Extremely Difficult Market'
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. A leading American cannabis company has announced that it will cease all operations in Michigan due to challenging market conditions. TerrAscend Corp. said it will close 20 dispensaries and four cultivation and processing facilities in the state, while eliminating more than 230 jobs, according to a statement released last week and a notice filed with the state's labor bureau. "After an extensive evaluation, we have made the strategic decision to exit the Michigan market," said TerrAscend's Executive Chairman Jason Wild. "Michigan is an extremely difficult market and we have come to the realization that our resources can be better utilized in our other markets." Newsweek has reached out to TerrAscend for comment. What To Know A 'Weed' sign advertises a cannabis dispensary seen on May 24, 2024, in Los Angeles, California. A 'Weed' sign advertises a cannabis dispensary seen on May 24, 2024, in Los Angeles, was founded in 2017 and has grown into one of the most prominent brands specializing in the cultivation and retail of cannabis products in the U.S., reporting over $300 million in net revenue last year. Prior to its recent announcement, the company employed around 1,200 people, meaning the latest layoffs equate to an overall workforce reduction of roughly 21 percent. The layoffs and closures will impact all locations throughout Michigan, including Grand Rapids and Detroit. The workforce reductions will take place in the third quarter, and the company expects its exit from the state to be "substantially completed" in the second half of 2025. TerrAscend said it plans to use the proceeds from the divestitures to "pay down existing company debt," and that the move is "expected to meaningfully enhance TerrAscend's financial profile." The company had previously identified the Michigan market as an area of concern. In its most recent annual results, TerrAscend said it had incurred a $45.4 million noncash impairment charge—an on-paper reduction in the value of its assets—related to this business unit, contributing to its $72.7 million net loss for the year. The recreational sale of cannabis became legal in Michigan in 2019, but issues with oversupply have in recent times seen prices fall and posed challenges to those in the industry. Earlier this year, Governor Gretchen Whitmer also proposed a 32 percent tax on marijuana products—compared with the 10 percent excise tax and 6 percent sales tax currently paid—to help finance a $3 billion road-building project in the state, which shop owners told news outlet Bridge Detroit would add to the industry's struggles. What People Are Saying Jason Wild, executive chairman of TerrAscend, said: "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." What Happens Next? After completing the Michigan exit, TerrAscend will operate 19 dispensaries as well as four cultivation and processing facilities across five states, including New Jersey, Maryland, Pennsylvania, Ohio and California, as well as Toronto, Canada. The restructured company, TerrAscend says, will focus on improving margins, operational efficiencies and cash flow in its remaining key markets.
Hamilton Spectator
09-07-2025
- Business
- Hamilton Spectator
TerrAscend Completes $79 Million Non-Dilutive Debt Financing
Proceeds used to retire $68 million of existing debt with the remainder designated for future growth initiatives Additional facility of up to $35 million available for strategic M&A No material debt maturing until late 2028 TORONTO, July 09, 2025 (GLOBE NEWSWIRE) — TerrAscend Corp. ('TerrAscend' or the 'Company') (TSX: TSND, OTCQX: TSNDF), a leading North American cannabis company, today announced that the Company, together with certain entities that are consolidated by the Company (the 'Consolidated Entities'), has closed on an upsize to its senior secured syndicated term loan (the 'Loan') of $79 million (the 'Transaction'), $68 million of which were used to retire existing indebtedness across other lenders, with the remainder designated for future growth initiatives. As part of the Transaction, an additional uncommitted term loan facility in an aggregate principal amount of up to $35 million will be available for future mergers and acquisitions ('M&A'). The Loan, led by FocusGrowth Asset Management, LP ('FocusGrowth'), a leading capital provider to the cannabis sector, carries an interest rate of 12.75%, and matures in August 2028. It contains no prepayment penalties, and is guaranteed by the Company. No warrants were issued as part of the Loan. 'This loan extends the vast majority of our debt until late 2028 and provides additional capital to execute on our growth initiatives, including M&A,' said Jason Wild, Executive Chairman of TerrAscend. 'This transaction reflects FocusGrowth's confidence in the Company's vision and strategy. Their team has been a pleasure to work with, and we look forward to a long and successful partnership together.' 'Our team is excited to further our partnership with the TerrAscend team to support their growth,' said Peter Bio, Partner of FocusGrowth. 'TerrAscend has established itself as a market leader in multiple states with ample greenfield opportunities for growth in both new and existing markets. We have enjoyed working with the team on this transaction and are already working with management to evaluate additional opportunities.' The Transaction constitutes a 'related party transaction' within the meaning of Multilateral Instrument 61–101 Protection of Minority Security Holders in Special Transactions ('MI 61–101') because Jason Wild, an insider of the Company, directly or indirectly invested approximately US$1.6 million of the Loan as a member of the loan syndicate in connection with the Transaction (the 'Insider Participation'). The Company has relied on exemptions from the formal valuation and minority shareholder approval requirements of MI 61–101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61–101 in respect of the Insider Participation as the fair market value (as determined in accordance with MI 61-101) of the Insider Participation in the Transaction is below 25% of the Company's market capitalization (as determined in accordance with MI 61-101). About TerrAscend TerrAscend is a leading TSX-listed cannabis company with interests across the North American cannabis sector, including operations in Pennsylvania, New Jersey, Maryland, Ohio, Michigan and California through TerrAscend Growth Corp. and retail operations in Canada, TerrAscend operates The Apothecarium, Gage and other dispensary retail locations as well as scaled cultivation, processing, and manufacturing facilities in its core markets. TerrAscend's cultivation and manufacturing practices yield consistent, high-quality cannabis, providing industry-leading product selection to both the medical and legal adult-use markets. The Company owns or licenses several synergistic businesses and brands including Gage Cannabis, The Apothecarium, Cookies, Lemonnade, Ilera Healthcare, Kind Tree, Legend, State Flower, Wana, and Valhalla Confections. For more information visit . 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 US 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. Forward-Looking Information This press release contains 'forward-looking information' within the meaning of applicable securities laws. Forward-looking information contained in this press release may be identified by the use of words such as, 'may', 'would', 'could', 'will', 'likely', 'expect', 'anticipate', 'believe,' 'intend', 'plan', 'forecast', 'project', 'estimate', 'look forward to', 'outlook' and other similar expressions, and include, but are not limited to, statements with respect to the Company's expectation of future availability of funds under the uncommitted term loan; and the Company's growth prospects in new and existing markets. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management in light of management's experience and perception of trends, current conditions and expected developments, as well as other factors relevant in the circumstances, including assumptions in respect of current and future market conditions, the current and future regulatory environment, and the availability of licenses, approvals and permits. Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company can give no assurance that they will prove to be correct. Actual results and developments may differ materially from those contemplated by these statements. Forward-looking information is subject to a variety of risks and uncertainties that could cause actual events or results to differ materially from those projected in the forward-looking information. Such risks and uncertainties include, but are not limited to, current and future market conditions; risks related to federal, state, provincial, territorial, local and foreign government laws, rules and regulations, including federal and state laws in the United States relating to cannabis operations in the United States; and the risk factors set out in the Company's most recently filed MD&A, filed with the Canadian securities regulators and available under the Company's profile on SEDAR+ at and in the section titled 'Risk Factors' in the Company's Annual Report for the year ended December 31, 2024 filed with the Securities and Exchange Commission on March 6, 2025. The statements in this press release are made as of the date of this release. The Company disclaims any intent or obligation to update any forward-looking information, whether, as a result of new information, future events, or results or otherwise, other than as required by applicable securities laws. For more information regarding TerrAscend: Ziad Ghanem Chief Executive Officer IR@ 689-345-4114 Investor Relations Contact: KCSA Strategic Communications Valter Pinto, Managing Director Valter@ 212-896-1254
