TerrAscend Corp.  (OTCQX: TRSSF) reported fourth-quarter and full-year results for 2019 ending in December.  Sales in the U.S. moved higher, while Canadian sales continued to struggle. The stock popped over 5% in early trading to lately sell at $1.92.

Executive Chairman and CEO of TerrAscend Jason Ackerman said, “We made substantial progress in 2019 developing our U.S. infrastructure and building our production capacity with a focus on profitable revenue opportunities, all the while continuing to streamline our Canadian operations.”

Fourth Quarter

Sales increased by 414% to $25.9 million in the fourth quarter of 2019 versus $5.0 million in fourth quarter of 2018. Sales in the U.S. were $24 million in the quarter representing 93% of the net revenue, while Canadian sales dropped to $1.9 million a decline of 62% for the same time period in 2018. The said it was due to the ongoing challenges facing the Canadian cannabis markets.

The fourth-quarter net loss was a staggering $171 million. The fourth-quarter adjusted EBITDA loss was $5.7 million versus last year’s fourth-quarter loss of $4.5 million. The company said that the change in adjusted EBITDA compared to the prior year period was primarily driven by a decline in Canadian cannabis revenues as a result of ongoing demand issues which persisted through December 2019, as well as an increase in G&A expenses and an increase in the cost of goods sold as the Company scaled up the organization through investments in additional headcount as it continues its U.S. expansion.

Full Year Results

TerrAscend reported that net sales increased 1,149% to $84.9 million for 2019 versus $6.8 million in 2018. Sales in the U.S. accounted for 68% of total revenue in 2019. The adjusted EBITDA loss for 2019 was $26.6 million, versus $16.4 million for 2018. The net loss for the year was an eye-popping $218 million.

Looking Ahead

The company said that based on a preliminary (unaudited) review, it is estimating that the first-quarter 2020 net sales will be roughly $35 million, compared to $25.9 million in Q4 2019. This would be a sequential increase of 35%. The company said it continues to make progress in improving its margins and has completed the construction of its Pennsylvania production facility, tripling its cultivation capacity.

Production output from the expansion was realized towards the end of Q1 2020 and will be fully realized in Q2 2020. The preliminary estimated Q1 2020 financial results set forth above are subject to the completion of the Company’s financial closing procedures.

Also in January, TerrAscend completed the first earnout payment to the former owners of Ilera Healthcare, a vertically-integrated cannabis cultivator, processor and dispensary operator in Pennsylvania. Additionally, TerrAscend NJ, LLC received a permit to cultivate medical marijuana by the New Jersey Department of Health.

Chairman Jason Wild added, “Despite the short-term challenges facing the global economy, we remain on track, both operationally and financially, to continue to execute on our goals of driving strong revenue growth in 2020 and achieving adjusted EBITDA positive results. We are committed to driving shareholder value and will continue to pursue accretive and strategic opportunities.”

Cash On Hand

The company reported that its cash and cash equivalents were $11.9 million as of December 31, 2019, compared to $21.8 million as of December 31, 2018. Subsequent to the quarter-end, the company raised gross proceeds in excess of $120 million, including the previously announced loan financing agreement with Canopy Growth in the amount of $80.5 million. A portion of the proceeds received from Canopy Growth was used to fully pay off the outstanding principal and interest amounts under the Credit Facility with JW Asset Management.