TerrAscend Corp.  (OTCQX: TRSSF) reported financial results for its third quarter ending September 30, 2020, with net sales of $50.9 million versus $47 million in the second quarter. It was almost double last year’s $26.8 in sales for the same time period in 2019. The company delivered a net loss of $17.5 million, which was slightly higher than last year’s third-quarter net loss of $17.3 million.

The company did note that its net income for the quarter was $12.7 million, a positive result for the first time in company history.

“We continued to build out our footprint in the northeast, including completion of an additional 25% cultivation expansion at our Pennsylvania facility in Q3, which began selling into the market in November,” said Jason Ackerman, CEO and Executive Chairman of TerrAscend. “In New Jersey, where I believe we will be a major player, sales from our newly operational cultivation facility and our first retail location in Phillipsburg are expected to begin in the coming days. I look forward to realizing the full benefit of our substantially larger cultivation and manufacturing capacities across our system, including our recently announced Maryland acquisition, to further accelerate our revenue and adjusted EBITDA growth in Q4 and beyond.”

Increased Guidance

TerrAscend said it is increasing its full year 2020 guidance to at least $196 million in net sales and at least $54 million of adjusted EBITDA. TerrAscend is also providing first-time guidance for 2021 saying it expects net sales of $360-380 million and adjusted EBITDA of $140-160 million for the full year.

The company said its outlook is driven by its emphasis on organic growth through expansion in high-quality, limited license markets while continuing to maintain tight control on costs. TerrAscend’s sales and profits in Pennsylvania are expected to continue to scale following its recently completed 25% cultivation expansion.” In New Jersey, sales from the Company’s greenhouse and indoor cultivation facilities are expected to commence this month and ramp throughout 2021. TerrAscend’s Phillipsburg, New Jersey dispensary is expected to open in the coming days, with plans to open two additional dispensaries in the state in the first half of 2021.”

Gross Margin Increase

Gross margins increased to 59% in the quarter versus 18% for the same time period in 2019 and improved over the second quarter’s 56%. The company attributed the sequential increase in gross margin to a higher mix as well as improved yields and lower cost per pound from the Pennsylvania operations. “Additionally, the turnaround of the Canadian operations has contributed to this sequential improvement.”

The company has been cutting costs delivering a third-quarter G&A expense of $13.7 million, representing 27% of net sales. This was lower than the second quarter’s expenses amounting to 33% of net sales and 45% of net sales in the 2019 third quarter. This strong leverage is a result of tight control of costs combined with continued robust revenue growth.

Cash and cash equivalents, including restricted cash, were $45 million as of September 30, 2020, compared to $6.9 million as of September 30, 2019, and $75 million as of June 30, 2020.

The stock is nearing its 52-week high of $8.20 as it was lately selling at $8.02.