TerrAscend Buying 3 Maryland Dispensaries Ahead of Recreational Market Launch

The Baltimore County location at 9413 Harford Road will be renamed under the company’s Apothecarium brand, and will be open for recreational sales starting Saturday. TerrAscend plans to relocate to a larger space near White Marsh Mall within six months, TerrAscend CEO Ziad Ghanem told Commercial Observer.

The Parkville agreement is the latest in TerrAscend’s penetration into the Maryland market. The company acquired a Salisbury dispensary, called Peninsula Alternative Health, for $22 million earlier this month, which has since been renamed the Apothecarium Salisbury, according to the Baltimore Business Journal. It has filed the paperwork for a fourth and final outpost in the state, since the state limits each operator to four locations. The final location will be in the Baltimore Metro area, a spokesperson confirmed.

The company already operated one store in Cumberland when Maryland passed legislation to institute an adult-use market in April, and was therefore looking to buy three more prior to the July 1 deadline, after which there is a five-year lockup period for adult-use licenses. “Our strategy was always to add three more retail stores,” said Ghanem. “That’s why we identified our M&A targets and filed with the regulators.”

TerrAscend’s moves are part of a wave of dispensary transactions within Maryland in anticipation of the state’s launch of its recreational marijuana market, which comes with its own restrictions and regulations, such as the five-year lockup. This past Monday was the last day for existing medical dispensaries to convert to a recreational license and be operational by July. 

Of Maryland’s 102 licensed dispensaries — the limit imposed when the medical sales market launched in 2017 — 95 had transferred their licenses to allow for recreational sales by the deadline, according to the Maryland Cannabis Administration. The state has also issued an additional 41 recreational grow licenses, including one for TerrAscend’s 22,000-square-foot cultivation and processing facility in Frederick. 

TerraAscend’s first acquisition in Maryland was its Cumberland store at 100 Beall Street, formerly called Allegany Medical Cannabis, which it purchased for $10 million in January. All four of the dispensaries targeted by TerrAscend in the state had long-term leases, so the sales price did not include the real estate. “As far as the location, every M&A target is different,” said Ghanem, but in cases where there’s a lease, that’s part of the acquisition terms. “A condition of the closing is to make sure the lease is transferred, and sometimes renegotiated.”

The Toronto-based firm will also begin trading under a new ticker on the Toronto Stock Exchange (TSX) on July 4, weaning itself from the Canadian Securities Exchange (CES), and going “truly independent,” the company announced Thursday. “With our brand-new cultivation facility and recent acquisitions in Maryland, we are set up for further success with adult-use sales set to come online in advance of our TSX listing,” TerrAscend executive chairman Jason Wild said in a statement.

TerrAscend is operational in five states, and Maryland is the second state after New Jersey to have recently converted from medical to recreational markets. “Maryland is our second state that flipped from medical to adult use,” said Ghanem, so the same team that prepped the transition there have laid the groundwork in Maryland.

Chava Gourarie can be reached at cgourarie@commercialobserver.com.