TerrAscend (TER.C) signed the agreement to acquire HMS Health and HMS Processing from Curaleaf Holdings (CURA.C) today, according to a press release.
This is the flip-side of the story we published on Friday regarding Curaleaf’s recent spate of unloading assets. HMS is a medical cannabis cultivator and processor in Maryland. The company anticipates to benefit immediately from the increase in 22,000 square foot cultivation and processing space brought by the Frederick, Maryland facility.
“This acquisition enables TerrAscend to expand its footprint into another robust limited license medical cannabis market with strong, long-term growth potential. By combining HMS with our industry leading scaled operations in the adjacent states of Pennsylvania and New 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 in Maryland with the high-quality, medical-grade products that TerrAscend is known for producing,” said Jason Ackerman, executive chairman and chief executive officer of TerrAscend.
HMS is in the business of producing cannabis flower and oil products for the medical markets, and can produce edibles when the company gets the regulatory nod. TerrAscend intends to expand into this space in the next year. TerraAscend will be absorbing the majority of the company’s United States operations once the deal is done.
The HMS deal is going to cost Curaleaf $27.5 million, which will be reduced to $25 million in cash and a $2.5 million note, which bears 5% interest annually, all due by April 2022. By the end of Q1, 2021, Terrascend will retain HMS’ economics through full ownerships of HMS Health, and a masters services agreement with HMS Processing.