TERADYNE, INC — Call Transcript 2026

Good morning. I will be your conference operator today. At this time, I would like to welcome everyone to the TerrAscend First Quarter 2026 financial results conference call. I will now turn the call over to Valter Pinto, Managing Director of KCSA Strategic Communications for introductions. Please go ahead. Thank you, operator, and good morning. Welcome to the TerrAscend First Quarter 2026 financial results conference call. Joining us for today's call is Jason Wild, Executive Chairman, Ziad Ghanem, President and Chief Executive Officer, and Alisa Campbell, Senior Vice President of Finance. I'd also like to welcome to the call our newly appointed CFO, Eric Jackson. Our remarks today include forward-looking statements, including statements with respect to the company's outlook, including the company's expected financial results from continuing operations for the first quarter of 2026, and the estimates and assumptions relating thereto, the company's expectations regarding its growth prospects in new and existing markets, such as Ohio and New Jersey, its M&A strategy, anticipated timing and benefits regarding the sale of the company's assets in Michigan, and the expectations regarding regulatory reform and the potential benefits thereof. Each forward-looking statement discussed in today's call is subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Actual results and the timing of certain events may differ materially from the results or timing predicted or implied by such forward-looking statements, and reported results should not be considered as an indication of future performance. Additional information regarding these factors appears under the heading Risk Factors in the company's Form 10-K filed with the Securities and Exchange Commission and other filings that the company makes with the SEC from time to time, which are available at sec.gov, on SEDAR+ and on the company's website at terrascend.com. The forward-looking statements in this call speak as of today's date, and the company undertakes no obligation to update or revise any of these statements. Also, during the call, the company may present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release and our quarterly report on Form 10-Q for the quarter ended March 31st, 2026, which you can find in the company's investor relations website or on the SEC and SEDAR+ websites. I'd now like to introduce Mr. Jason Wild. Please go ahead, Jason. Good morning, everyone. Thank you for joining us. Before we discuss our financial results for the quarter, I want to take a moment to highlight the recent rescheduling of medical cannabis. This is a monumental inflection point, which is a transformational development for the entire industry. The most immediate impact will be the elimination of the 280E tax burden on medical cannabis, which will materially improve profitability, further strengthen our balance sheet, and lower our cost of capital over time. In addition, rescheduling medical cannabis paves the way for expanded clinical research, further validating its safety and efficacy, and potentially opening the door for international export. We also see rescheduling as the first step to improving access to institutional capital over time and providing public multi-state operators such as TerrAscend with an opportunity to uplist onto a U.S. exchange such as the Nasdaq or the NYSE, which we view as an important driver of liquidity and ultimately long-term value creation. Importantly, we see this first step as a catalyst for further federal cannabis policy reform, improved access to the banking system, uplisting, as I just mentioned, and the potential for retroactive tax relief, which could represent a meaningful upside opportunity that is not currently reflected in market valuations. While the timing and scope of additional changes remain uncertain, we continue to operate with a disciplined approach, positioning the business to benefit from regulatory progress while maintaining flexibility in our long-term strategy. As we've said many times, we operate the business independent of regulatory reform, and successful reform like this is upside. With that said, we believe that moment is now here, and we are prepared to take full advantage. In addition to rescheduling, we view the upcoming Q4 psychoactive hemp regulation as a strong additional tailwind for our sector. The approximately $20 billion-$30 billion psychoactive hemp market is arguably our industry's largest competitor, with none of our industry's regulatory and tax burdens. We are confident in our ability to produce best-in-class experiences across our branded and CPG portfolios and eagerly look forward to capturing the psychoactive hemp consumer as they turn back to the regulated market. Turning to our first quarter results, revenue from continuing operations totaled $65.5 million, returning to year-over-year growth, while gross margins, adjusted EBITDA margins, and other key profitability metrics grew sequentially and exceeded our targets for the quarter. Gross margin for the quarter was 52.8%, consistent with recent quarters, and adjusted EBITDA from continuing operations was $17.4 million, representing a margin of 26.5%. We generated approximately $8.7 million of net cash from continuing operations and $7.8 million of free cash flow during the quarter, marking our 15th consecutive quarter of positive operating cash flow and 11th consecutive quarter of positive free cash flow. Our strong results were supported by operational efficiencies and continued strength in our vertically integrated Northeast markets. In New Jersey, we fully integrated our Union Chill dispensary following its acquisition in early January. In Maryland, we are operating at an annualized run rate of approximately $75 million, with gross margins in the quarter in the high 50s. In Pennsylvania, we generated year-over-year revenue growth for the fourth consecutive quarter. We recently completed the first harvest from additional cultivation rooms in Pennsylvania, expanding our capacity in preparation for new product launches, increased wholesale demand, and potential adult use legalization. On the M&A front, we remain active in evaluating accretive opportunities. Our philosophy remains unchanged. We're focused on disciplined accretive acquisitions and have been selective in passing on opportunities that were not attractive enough for us. The current environment continues to present strong opportunities, including distressed assets, particularly in our core markets. We look forward to hopefully sharing details on this front in the coming weeks. Before I want to turn the call over to Ziad, I want to take a moment to welcome our new CFO, Eric Jackson, to the call today. Eric brings more than two decades of finance and operational leadership experience across large-scale retail and consumer businesses. Welcome to the team, Eric. We're all excited to be working with you. With that, I'll now turn the call over to Ziad to provide an update across our key markets. Ziad? Thank you, Jason. Let me walk you through our performance in each of our key markets this quarter, beginning with New Jersey. In New Jersey, overall revenue improved during the quarter, led by retail, which included a full quarter of revenue from our Union Chill dispensary location, while wholesale revenue declined slightly quarter-over-quarter. Gross margins improved sequentially, primarily driven by increased verticality in the state. All three Apothecarium locations ranked within the top 25 and gained market share quarter-over-quarter, supported by high-quality products and new product launches, reinforcing our position as the highest grossing retailer in the state, according to Lit Alerts. On the brand side, Kind Tree and Legend continued to perform well with combined growth across key categories. Flower sales were slightly higher, supported by strong performance from core strains such as White Iverson and Cherry Slushy, while Legend vape sales grew double digits and contributed to meaningful share gains, according to BDSA. We also saw continued strength in our vape and edible categories, maintaining a leading position in vapes and Valhalla delivering growth in edibles. Looking ahead, we remain focused on disciplined growth in New Jersey, including continued evaluation of expansion opportunities at our cultivation facility in Boonton and additional retail licenses as we maintain our leadership position in the state. In Maryland, our operations are running at approximately $75 million in annualized revenue, while gross margins were in the high 50s. During the quarter, retail revenue was stable sequentially, while wholesale revenue was modestly lower. Our vertical structure and ongoing operational efficiencies have allowed us to consistently maintain strong margins even as the broader market has evolved. We continue to see benefits from our cultivation expansion, which is driving improved flower output and supporting retail and wholesale channels. Two of our four Apothecarium retail locations in Maryland ranked among the top 10 in the state during the quarter, according to Lit Alerts. On the brand side, Kind Tree and Legend are performing well, with notable growth in flower and vape categories and the successful launch of Legend pre-rolls during the first quarter, according to BDSA. In Pennsylvania, we generated year-over-year revenue growth for the fourth consecutive quarter. We also saw continued improvement in overall market share, supported by strong brand performance and disciplined execution. Wholesale revenue and retail revenue both increased year-over-year, reflecting continued strong demand across our product portfolio, including flower, vapes, and edibles. During the quarter, we launched Tyson 2.0 in Pennsylvania and Maryland, further strengthening our brand portfolio and supporting continued momentum across our wholesale and retail channels. The initial rollout featured a curated selection of premium flower and high-potency vapes available through TerrAscend's Apothecarium dispensaries and third-party wholesale partners. Five of our six Apothecarium retail locations in Pennsylvania ranked among the top 15 stores in the state during the quarter, according to Lit Alerts. On the brand side, Kind Tree and Legend saw double-digit growth quarter-over-quarter across key categories and continued share gains, according to BDSA. We also saw another strong quarter in flower with record sales levels alongside significant growth in vapes and extracts, where Kind Tree remains a leading brand in the state. We continue to generate higher revenue per store relative to peers, reflecting strong execution at the retail level and the strength of our product offerings. We have a fully built-out large-scale cultivation and manufacturing facility in Pennsylvania with no need for additional capital investment, and we have already brought incremental capacity online to support increased medical and adult use demand. As part of that effort, we reactivated six additional cultivation rooms late last year, with our first harvest completed in April. We expect product to be available for sale this quarter. This will allow us to meet increased demand in the state and improve our inventory ahead of potential adult use conversion while leveraging existing infrastructure without incremental CapEx. Looking ahead, we see Pennsylvania as a key growth market and believe our infrastructure, brand portfolio, and operating model position us to benefit meaningfully from future regulatory developments. In Ohio, Ratio Cannabis is now fully integrated into our existing operations. Our strategy in the state remains consistent, which is to build a scaled, high-quality retail footprint through discipline and accretive acquisitions. Turning to Michigan, we have now completed approximately 85% of asset sales in the state and have significantly negotiated down our liabilities and debt. We are moving into the final stage of the exit process through receivership in Michigan to further mitigate liabilities. The majority of proceeds are being used to pay down existing debt. This exit has been executed efficiently and strengthens our focus in our core markets. In closing, TerrAscend continues to demonstrate strong operational progress across our core markets of New Jersey, Maryland, and Pennsylvania. Our focus on efficiency, disciplined cost management, and vertical integration continues to support consistent growth and adjusted EBITDA margins. We have generated approximately $24.3 billion in free cash flow in the past four quarters, supported by improved working capital management and tighter inventory discipline across the business. We have generated $24.3 million in free cash flow in the last four quarters, supported by improved working capital management and tighter inventory discipline across the business. We are pleased with the foundation we have built, bolstered by our strong fundamentals, leading retail and wholesale assets in key high quality markets, a targeted M&A strategy, no material debt maturing until late 2028, consistent positive operating and free cash flow generation quarter-over-quarter, representing an impressive 10.3% free cash flow yield in Q1, best-in-class sponsorship, and a strong leadership team. Giving all this, I am more confident in our future than I have ever been. Before I turn it over to Eric, I want to take a moment to thank Alisa for her leadership and professionalism over the past year as interim CFO. She stepped into the role during an important time of our business and did an outstanding job maintaining financial discipline, supporting our teams, and helping strengthen our financial foundation. We are extremely grateful for her contributions and look forward to her continued impact in her role as Senior Vice President, Finance, reporting to Eric. At this time, I would like to welcome our new CFO, Eric Jackson, for a few words. Thank you, Jason and Ziad, for the kind words. I'm honored to join at such an exciting time for the company and the broader cannabis industry. As a lifelong Ohio resident, I've witnessed the growth of the industry firsthand. I've had the opportunity to work in large-scale, complicated retail operations with great brands. I believe TerrAscend is uniquely positioned with a focus on high quality, high-growth markets, and a proven record of strong financial performance. I'm excited to work with Jason, Ziad, Alisa, and the rest of the team. I also look forward to introducing myself to the analyst community and loyal shareholders. With that, let me turn the call over to Alisa to provide more details on our financial results for the first quarter of 2026. Alisa. Thanks, Eric, and welcome to the team. Good morning, everyone, and thank you for joining. The results I'll be reviewing today have been filed on both SEDAR+ and with the SEC, and all figures are presented in US dollars. As a reminder, all financials discussed reflect results from continuing operations. Net revenue for the first quarter of 2026 totaled $65.5 million compared to $66.1 million in the fourth quarter of 2025. Retail revenue increased sequentially while wholesale revenue declined. Gross margin for the first quarter was 52.8% compared to 52.1% in the fourth quarter of 2025. Sequential performance reflects continued strength in New Jersey, Maryland, and Pennsylvania. D&A expenses for the first quarter were $21.5 million or 32.8% of revenue compared to $22.8 million or 34.4% of revenue in the fourth quarter of 2025, reflecting disciplined cost management and ongoing optimization of our operating structure. Net loss from continuing operations for the first quarter was $6.8 million compared to a net loss of $0.5 million in the fourth quarter of 2025. Adjusted EBITDA for the first quarter was $17.4 million or 26.5% of revenue, compared to $16.7 million or 25.2% of revenue in the fourth quarter of 2025. The sequential improvement reflects strong gross margins and continued operating discipline across the business. Turning to the balance sheet and cash flow. Cash and cash equivalents were $39.1 million as of March 31st, 2026, compared to $37.4 million as of December 31st, 2025. Cash flow from operations in the first quarter was $8.7 million, representing our 15th consecutive quarter of positive operating cash flow, achieving an operating cash flow yield of 13.3%. Capital expenditures were $0.9 million in the first quarter, primarily related to ongoing cultivation and facility optimization projects. During the quarter, we continued to allocate capital in a disciplined manner while maintaining a strong liquidity position. Free cash flow for the first quarter was $7.8 million, representing our 11th consecutive quarter of positive free cash flow, achieving a free cash flow yield of 10.3%. Similar to Q1, we expect Q2 year-over-year revenue growth of 2%-3%. We also expect consistent strong gross margin performance. In summary, our first quarter results reflect continued operational excellence, improving profitability, and consistent cash flow generation, supported by disciplined cost management and a strong operating platform. We look forward to sharing continued progress in the quarters ahead. This concludes our prepared remarks. I'll now turn it back to the operator for questions Thank you. Ladies and gentlemen, we will now begin the question and answer session. Your first question comes from Kenric Tyghe from Canaccord Genuity. Please go ahead. Thank you. Good morning. Congrats on the quarter. Jason, question for you on rescheduling and the M&A calculus. you know, obviously you're in a position here where you had an existing facility, but separately you also now have increased balance sheet flexibility or pending increased balance sheet flexibility across the industry. How does that change the calculus for you? Separate to that, has the market, or do you expect this to create increased certainty around, you know, potential M&A transactions and perhaps even a more rational backdrop as counterintuitive as that may sound? How are you thinking about it? Hi, Kenric. Thanks for the question. I would say there hasn't been much change on the M&A front. We've been deep in several discussions on that front. We haven't noticed any change in tone by the targets. I think that actually it makes them more, potentially more bullish on doing a deal with us because now they're looking, you know, all of these deals that we're looking at are structured, and there's a component of equity or a convert as part of the consideration. Now they're looking at our stock as something that has a higher likelihood of being able to go public on a U.S. exchange in the next, you know, say, 12 to 24 months. I would say, it's only been a positive. The news has only been a positive as it relates to our discussions on the, on the M&A front. Thank you. That's good to know. Then just separate to that or maybe a follow-up. Yeah, higher market seems to have been very challenging or more challenging than expected to get anything done in. I mean, happy to see that the integration has been completed, but any additional color you could provide on higher market dynamics and separately on higher acquisition targets and perhaps, you know, what it is that needs to reset there for you to be able to move forward and execute on some of these transactions? Sure. I'm gonna let Ziad take that one. Yes. Hey, Kenric. Ohio, we have one store in Ohio today. The store is still performing well and according to our expectation. Our strategy in Ohio continues to build the same business around that we've done in similar to what we've done in Maryland and other places we acquired. The conversations, like Jason Wild said, with some of the target acquisitions are still going well. We continue to be disciplined. We are seeing some of the challenges that you are describing, but it's not impacting our M&A conversation. We have said no to some of the deals that did not make sense to us, but we continue to look at some attractive opportunities. As you said, our balance sheet is allowing us to have those conversations, so we'll share as soon as we have more news. Great. Thank you. I'll get back in queue. Your next question comes from Frederico Gomes from ATB Capital Markets. Please go ahead. Hi. Good morning, guys. Thanks for the question here, and congrats on the great quarter. First question. I think you mentioned you saw a sequential decline in wholesale for both New Jersey and Maryland. Just curious, you know, what's driving that? Is it just increased competition, price compression? Or is it maybe related to increased verticality in those two states? Yeah, both. Hi, Fred, you nailed it. It's a combination of pricing compression, strategic decision to balance our verticality and wholesale to continue to protect the gross margin that we've been showing for five or six or maybe even eight consecutive quarters being where we are. Small part of it is timing between Q4 and Q1. Those are the reasons. When I look at wholesale and the health of our wholesale, it starts by the quality of our products and how our SKUs are performing with the patients and the customers both in our stores and in our wholesale accounts. The company in Q1 had a record of any quarter for finished goods sold both in our retail and wholesale stores. We had the biggest market share in our Legend brand. The company also had record for single quarter finished unit sales of TerrAscend SKUs. The penetration and the number of accounts continue to be strong. We didn't see any scale back. But also we have added one very healthy store to our New Jersey store, and that's where the protection of gross margin, the increase in verticality comes in. We're gonna continue to see those shifts. Our goal in New Jersey is to add more dispensaries like Union Chill, and we'll share as soon as we have news on this. That's what gives us the confidence on that balance between revenue and gross margin. Thank you. Appreciate that. Just second question on, I guess your margins and your G&A. A decline sequentially G&A dollars, so, you know, and obviously you have very good margins this quarter, adjusted EBITDA. But I wonder how much more is there to optimize on the G&A front. I mean, should we expect, further, optimization initiatives, or is it more about, you know, growing the top line here at this point? Thanks. Yeah, look, first I'll start by saying I couldn't be prouder of the teams of what they've done on the G&A front and the outcomes that came out of it, both on the gross margin and the EBITDA margin. In an industry like ours, where there are constant changes, we have to be ready to continue to innovate. Innovation comes in multiple fronts, right? Strain selection and integrated business process, whereas you select a year in advance your portfolio that gives you the innovation, gives you the strains, and allow you to protect gross margin and increase yield. There's more room on this, and we'll continue to do that. Another pricing pressure will continue to happen. We'll have to continue to work between our verticality and our increasing our verticality and protecting our gross margin. I would say the room that exists is protect against any headwind and to protect any pricing pressure, but I have confidence in our gross margin where we are for Q1 and delivering the same thing for the rest of the year due to that dynamic. The other point is we're launching the most number of SKUs in Q2 and Q3, which we're super excited about. I think our customers, our both patients and consumer will love what we're coming in, both strains level, partnership, and new products. With that, we need some as G&A. Some of the saving would be saving to invest in order to protect the revenue and the gross margin. In summary, the gross margin that you're saying both on the margins, both on gross margin and EBITDA margin are two things we're pretty comfortable with for the rest of the year. Thank you very much for that. As a reminder, if you have a question, please press the star followed by 1 on your touchtone phone. There are no further questions at this time. I will now turn the call over to Jason. Please continue. Thank you all for joining us today. We are very excited about the recent developments in the cannabis space. We hope that excitement is evident to all of you with on this earnings call, and we look forward to sharing our second quarter earnings results in the coming months. Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participation, and you may now disconnect. Have a good day.

Speaker 6: Good morning. I will be your conference operator today. At this time, I would like to welcome everyone to the TerrAscend First Quarter 2026 financial results conference call. I will now turn the call over to Valter Pinto, Managing Director of KCSA Strategic Communications for introductions. Please go ahead. Good morning. good morning I will be your conference operator today. i will be your conference operator today At this time, I would like to welcome everyone to the TerrAscend First Quarter 2026 financial results conference call. at this time i would like to welcome everyone to the terrascend first quarter 2026 financial results conference call I will now turn the call over to Valter Pinto, Managing Director of KCSA Strategic Communications for introductions. i will now turn the call over to valter pinto managing director of kcsa strategic communications for introductions Please go ahead. please go ahead

Speaker 7: Thank you, operator, and good morning. Welcome to the TerrAscend First Quarter 2026 financial results conference call. Joining us for today's call is Jason Wild, Executive Chairman, Ziad Ghanem, President and Chief Executive Officer, and Alisa Campbell, Senior Vice President of Finance. I'd also like to welcome to the call our newly appointed CFO, Eric Jackson. Our remarks today include forward-looking statements, including statements with respect to the company's outlook, including the company's expected financial results from continuing operations for the first quarter of 2026, and the estimates and assumptions relating thereto, the company's expectations regarding its growth prospects in new and existing markets, such as Ohio and New Jersey, its M&A strategy, anticipated timing and benefits regarding the sale of the company's assets in Michigan, and the expectations regarding regulatory reform and the potential benefits thereof. Thank you, operator, and good morning. thank you operator and good morning Welcome to the TerrAscend First Quarter 2026 financial results conference call. welcome to the terrascend first quarter 2026 financial results conference call Joining us for today's call is Jason Wild, Executive Chairman, Ziad Ghanem, President and Chief Executive Officer, and Alisa Campbell, Senior Vice President of Finance. joining us for today's call is jason wild executive chairman ziad ghanem president and chief executive officer and alisa campbell senior vice president of finance I'd also like to welcome to the call our newly appointed CFO, Eric Jackson. i'd also like to welcome to the call our newly appointed cfo eric jackson Our remarks today include forward-looking statements, including statements with respect to the company's outlook, including the company's expected financial results from continuing operations for the first quarter of 2026, and the estimates and assumptions relating thereto, the company's expectations regarding its growth prospects in new and existing markets, such as Ohio and New Jersey, its M&A strategy, anticipated timing and benefits regarding the sale of the company's assets in Michigan, and the expectations regarding regulatory reform and the potential benefits thereof. our remarks today include forward-looking statements including statements with respect to the company's outlook including the company's expected financial results from continuing operations for the first quarter of 2026 and the estimates and assumptions relating thereto the company's expectations regarding its growth prospects in new and existing markets such as ohio and new jersey its m&a strategy anticipated timing and benefits regarding the sale of the company's assets in michigan and the expectations regarding regulatory reform and the potential benefits thereof Each forward-looking statement discussed in today's call is subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Actual results and the timing of certain events may differ materially from the results or timing predicted or implied by such forward-looking statements, and reported results should not be considered as an indication of future performance. Additional information regarding these factors appears under the heading Risk Factors in the company's Form 10-K filed with the Securities and Exchange Commission and other filings that the company makes with the SEC from time to time, which are available at sec.gov, on SEDAR+ and on the company's website at terrascend.com. The forward-looking statements in this call speak as of today's date, and the company undertakes no obligation to update or revise any of these statements. Each forward-looking statement discussed in today's call is subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements. each forward-looking statement discussed in today's call is subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements Actual results and the timing of certain events may differ materially from the results or timing predicted or implied by such forward-looking statements, and reported results should not be considered as an indication of future performance. actual results and the timing of certain events may differ materially from the results or timing predicted or implied by such forward-looking statements and reported results should not be considered as an indication of future performance Additional information regarding these factors appears under the heading Risk Factors in the company's Form 10-K filed with the Securities and Exchange Commission and other filings that the company makes with the SEC from time to time, which are available at sec.gov, on SEDAR+ and on the company's website at terrascend.com. additional information regarding these factors appears under the heading risk factors in the company's form 10-k filed with the securities and exchange commission and other filings that the company makes with the sec from time to time which are available at sec.gov on sedar+ and on the company's website at terrascend.com The forward-looking statements in this call speak as of today's date, and the company undertakes no obligation to update or revise any of these statements. the forward-looking statements in this call speak as of today's date and the company undertakes no obligation to update or revise any of these statements Also, during the call, the company may present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release and our quarterly report on Form 10-Q for the quarter ended March 31st, 2026, which you can find in the company's investor relations website or on the SEC and SEDAR+ websites. I'd now like to introduce Mr. Jason Wild. Please go ahead, Jason. Also, during the call, the company may present both GAAP and non-GAAP financial measures. also during the call the company may present both gaap and non-gaap financial measures A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release and our quarterly report on Form 10-Q for the quarter ended March 31st, 2026, which you can find in the company's investor relations website or on the SEC and SEDAR+ websites. a reconciliation of non-gaap to gaap measures is included in today's earnings press release and our quarterly report on form 10-q for the quarter ended march 31st 2026 which you can find in the company's investor relations website or on the sec and sedar+ websites I'd now like to introduce Mr. Jason Wild. i'd now like to introduce mr jason wild Please go ahead, Jason. please go ahead jason

Speaker 4: Good morning, everyone. Thank you for joining us. Before we discuss our financial results for the quarter, I want to take a moment to highlight the recent rescheduling of medical cannabis. This is a monumental inflection point, which is a transformational development for the entire industry. The most immediate impact will be the elimination of the 280E tax burden on medical cannabis, which will materially improve profitability, further strengthen our balance sheet, and lower our cost of capital over time. In addition, rescheduling medical cannabis paves the way for expanded clinical research, further validating its safety and efficacy, and potentially opening the door for international export. Good morning, everyone. good morning everyone Thank you for joining us. thank you for joining us Before we discuss our financial results for the quarter, I want to take a moment to highlight the recent rescheduling of medical cannabis. before we discuss our financial results for the quarter i want to take a moment to highlight the recent rescheduling of medical cannabis This is a monumental inflection point, which is a transformational development for the entire industry. this is a monumental inflection point which is a transformational development for the entire industry The most immediate impact will be the elimination of the 280E tax burden on medical cannabis, which will materially improve profitability, further strengthen our balance sheet, and lower our cost of capital over time. the most immediate impact will be the elimination of the 280e tax burden on medical cannabis which will materially improve profitability further strengthen our balance sheet and lower our cost of capital over time In addition, rescheduling medical cannabis paves the way for expanded clinical research, further validating its safety and efficacy, and potentially opening the door for international export. in addition rescheduling medical cannabis paves the way for expanded clinical research further validating its safety and efficacy and potentially opening the door for international export We also see rescheduling as the first step to improving access to institutional capital over time and providing public multi-state operators such as TerrAscend with an opportunity to uplist onto a U.S. exchange such as the Nasdaq or the NYSE, which we view as an important driver of liquidity and ultimately long-term value creation. Importantly, we see this first step as a catalyst for further federal cannabis policy reform, improved access to the banking system, uplisting, as I just mentioned, and the potential for retroactive tax relief, which could represent a meaningful upside opportunity that is not currently reflected in market valuations. While the timing and scope of additional changes remain uncertain, we continue to operate with a disciplined approach, positioning the business to benefit from regulatory progress while maintaining flexibility in our long-term strategy. We also see rescheduling as the first step to improving access to institutional capital over time and providing public multi-state operators such as TerrAscend with an opportunity to uplist onto a U.S. exchange such as the Nasdaq or the NYSE, which we view as an important driver of liquidity and ultimately long-term value creation. we also see rescheduling as the first step to improving access to institutional capital over time and providing public multi-state operators such as terrascend with an opportunity to uplist onto a u.s exchange such as the nasdaq or the nyse which we view as an important driver of liquidity and ultimately long-term value creation Importantly, we see this first step as a catalyst for further federal cannabis policy reform, improved access to the banking system, uplisting, as I just mentioned, and the potential for retroactive tax relief, which could represent a meaningful upside opportunity that is not currently reflected in market valuations. importantly we see this first step as a catalyst for further federal cannabis policy reform improved access to the banking system uplisting as i just mentioned and the potential for retroactive tax relief which could represent a meaningful upside opportunity that is not currently reflected in market valuations While the timing and scope of additional changes remain uncertain, we continue to operate with a disciplined approach, positioning the business to benefit from regulatory progress while maintaining flexibility in our long-term strategy. while the timing and scope of additional changes remain uncertain we continue to operate with a disciplined approach positioning the business to benefit from regulatory progress while maintaining flexibility in our long-term strategy As we've said many times, we operate the business independent of regulatory reform, and successful reform like this is upside. With that said, we believe that moment is now here, and we are prepared to take full advantage. In addition to rescheduling, we view the upcoming Q4 psychoactive hemp regulation as a strong additional tailwind for our sector. The approximately $20 billion-$30 billion psychoactive hemp market is arguably our industry's largest competitor, with none of our industry's regulatory and tax burdens. We are confident in our ability to produce best-in-class experiences across our branded and CPG portfolios and eagerly look forward to capturing the psychoactive hemp consumer as they turn back to the regulated market. As we've said many times, we operate the business independent of regulatory reform, and successful reform like this is upside. as we've said many times we operate the business independent of regulatory reform and successful reform like this is upside With that said, we believe that moment is now here, and we are prepared to take full advantage. with that said we believe that moment is now here and we are prepared to take full advantage In addition to rescheduling, we view the upcoming Q4 psychoactive hemp regulation as a strong additional tailwind for our sector. in addition to rescheduling we view the upcoming q4 psychoactive hemp regulation as a strong additional tailwind for our sector The approximately $20 billion-$30 billion psychoactive hemp market is arguably our industry's largest competitor, with none of our industry's regulatory and tax burdens. the approximately $20 billion-$30 billion psychoactive hemp market is arguably our industry's largest competitor with none of our industry's regulatory and tax burdens We are confident in our ability to produce best-in-class experiences across our branded and CPG portfolios and eagerly look forward to capturing the psychoactive hemp consumer as they turn back to the regulated market. we are confident in our ability to produce best-in-class experiences across our branded and cpg portfolios and eagerly look forward to capturing the psychoactive hemp consumer as they turn back to the regulated market Turning to our first quarter results, revenue from continuing operations totaled $65.5 million, returning to year-over-year growth, while gross margins, adjusted EBITDA margins, and other key profitability metrics grew sequentially and exceeded our targets for the quarter. Gross margin for the quarter was 52.8%, consistent with recent quarters, and adjusted EBITDA from continuing operations was $17.4 million, representing a margin of 26.5%. We generated approximately $8.7 million of net cash from continuing operations and $7.8 million of free cash flow during the quarter, marking our 15th consecutive quarter of positive operating cash flow and 11th consecutive quarter of positive free cash flow. Our strong results were supported by operational efficiencies and continued strength in our vertically integrated Northeast markets. Turning to our first quarter results, revenue from continuing operations totaled $65.5 million, returning to year-over-year growth, while gross margins, adjusted EBITDA margins, and other key profitability metrics grew sequentially and exceeded our targets for the quarter. turning to our first quarter results revenue from continuing operations totaled $65.5 million returning to year-over-year growth while gross margins adjusted ebitda margins and other key profitability metrics grew sequentially and exceeded our targets for the quarter Gross margin for the quarter was 52.8%, consistent with recent quarters, and adjusted EBITDA from continuing operations was $17.4 million, representing a margin of 26.5%. gross margin for the quarter was 52.8% consistent with recent quarters and adjusted ebitda from continuing operations was $17.4 million representing a margin of 26.5% We generated approximately $8.7 million of net cash from continuing operations and $7.8 million of free cash flow during the quarter, marking our 15th consecutive quarter of positive operating cash flow and 11th consecutive quarter of positive free cash flow. we generated approximately $8.7 million of net cash from continuing operations and $7.8 million of free cash flow during the quarter marking our 15th consecutive quarter of positive operating cash flow and 11th consecutive quarter of positive free cash flow Our strong results were supported by operational efficiencies and continued strength in our vertically integrated Northeast markets. our strong results were supported by operational efficiencies and continued strength in our vertically integrated northeast markets In New Jersey, we fully integrated our Union Chill dispensary following its acquisition in early January. In Maryland, we are operating at an annualized run rate of approximately $75 million, with gross margins in the quarter in the high 50s. In Pennsylvania, we generated year-over-year revenue growth for the fourth consecutive quarter. We recently completed the first harvest from additional cultivation rooms in Pennsylvania, expanding our capacity in preparation for new product launches, increased wholesale demand, and potential adult use legalization. On the M&A front, we remain active in evaluating accretive opportunities. Our philosophy remains unchanged. We're focused on disciplined accretive acquisitions and have been selective in passing on opportunities that were not attractive enough for us. The current environment continues to present strong opportunities, including distressed assets, particularly in our core markets. We look forward to hopefully sharing details on this front in the coming weeks. In New Jersey, we fully integrated our Union Chill dispensary following its acquisition in early January. in new jersey we fully integrated our union chill dispensary following its acquisition in early january In Maryland, we are operating at an annualized run rate of approximately $75 million, with gross margins in the quarter in the high 50s. in maryland we are operating at an annualized run rate of approximately $75 million with gross margins in the quarter in the high 50s In Pennsylvania, we generated year-over-year revenue growth for the fourth consecutive quarter. in pennsylvania we generated year-over-year revenue growth for the fourth consecutive quarter We recently completed the first harvest from additional cultivation rooms in Pennsylvania, expanding our capacity in preparation for new product launches, increased wholesale demand, and potential adult use legalization. we recently completed the first harvest from additional cultivation rooms in pennsylvania expanding our capacity in preparation for new product launches increased wholesale demand and potential adult use legalization On the M&A front, we remain active in evaluating accretive opportunities. on the m&a front we remain active in evaluating accretive opportunities Our philosophy remains unchanged. our philosophy remains unchanged We're focused on disciplined accretive acquisitions and have been selective in passing on opportunities that were not attractive enough for us. we're focused on disciplined accretive acquisitions and have been selective in passing on opportunities that were not attractive enough for us The current environment continues to present strong opportunities, including distressed assets, particularly in our core markets. the current environment continues to present strong opportunities including distressed assets particularly in our core markets We look forward to hopefully sharing details on this front in the coming weeks. we look forward to hopefully sharing details on this front in the coming weeks Before I want to turn the call over to Ziad, I want to take a moment to welcome our new CFO, Eric Jackson, to the call today. Eric brings more than two decades of finance and operational leadership experience across large-scale retail and consumer businesses. Welcome to the team, Eric. We're all excited to be working with you. With that, I'll now turn the call over to Ziad to provide an update across our key markets. Ziad? Before I want to turn the call over to Ziad, I want to take a moment to welcome our new CFO, Eric Jackson, to the call today. before i want to turn the call over to ziad i want to take a moment to welcome our new cfo eric jackson to the call today Eric brings more than two decades of finance and operational leadership experience across large-scale retail and consumer businesses. eric brings more than two decades of finance and operational leadership experience across large-scale retail and consumer businesses Welcome to the team, Eric. welcome to the team eric We're all excited to be working with you. we're all excited to be working with you With that, I'll now turn the call over to Ziad to provide an update across our key markets. with that i'll now turn the call over to ziad to provide an update across our key markets Ziad? ziad

Speaker 8: Thank you, Jason. Let me walk you through our performance in each of our key markets this quarter, beginning with New Jersey. In New Jersey, overall revenue improved during the quarter, led by retail, which included a full quarter of revenue from our Union Chill dispensary location, while wholesale revenue declined slightly quarter-over-quarter. Gross margins improved sequentially, primarily driven by increased verticality in the state. All three Apothecarium locations ranked within the top 25 and gained market share quarter-over-quarter, supported by high-quality products and new product launches, reinforcing our position as the highest grossing retailer in the state, according to Lit Alerts. On the brand side, Kind Tree and Legend continued to perform well with combined growth across key categories. Thank you, Jason. thank you jason Let me walk you through our performance in each of our key markets this quarter, beginning with New Jersey. let me walk you through our performance in each of our key markets this quarter beginning with new jersey In New Jersey, overall revenue improved during the quarter, led by retail, which included a full quarter of revenue from our Union Chill dispensary location, while wholesale revenue declined slightly quarter-over-quarter. in new jersey overall revenue improved during the quarter led by retail which included a full quarter of revenue from our union chill dispensary location while wholesale revenue declined slightly quarter-over-quarter Gross margins improved sequentially, primarily driven by increased verticality in the state. gross margins improved sequentially primarily driven by increased verticality in the state All three Apothecarium locations ranked within the top 25 and gained market share quarter-over-quarter, supported by high-quality products and new product launches, reinforcing our position as the highest grossing retailer in the state, according to Lit Alerts. all three apothecarium locations ranked within the top 25 and gained market share quarter-over-quarter supported by high-quality products and new product launches reinforcing our position as the highest grossing retailer in the state according to lit alerts On the brand side, Kind Tree and Legend continued to perform well with combined growth across key categories. on the brand side kind tree and legend continued to perform well with combined growth across key categories Flower sales were slightly higher, supported by strong performance from core strains such as White Iverson and Cherry Slushy, while Legend vape sales grew double digits and contributed to meaningful share gains, according to BDSA. We also saw continued strength in our vape and edible categories, maintaining a leading position in vapes and Valhalla delivering growth in edibles. Looking ahead, we remain focused on disciplined growth in New Jersey, including continued evaluation of expansion opportunities at our cultivation facility in Boonton and additional retail licenses as we maintain our leadership position in the state. In Maryland, our operations are running at approximately $75 million in annualized revenue, while gross margins were in the high 50s. During the quarter, retail revenue was stable sequentially, while wholesale revenue was modestly lower. Flower sales were slightly higher, supported by strong performance from core strains such as White Iverson and Cherry Slushy, while Legend vape sales grew double digits and contributed to meaningful share gains, according to BDSA. flower sales were slightly higher supported by strong performance from core strains such as white iverson and cherry slushy while legend vape sales grew double digits and contributed to meaningful share gains according to bdsa We also saw continued strength in our vape and edible categories, maintaining a leading position in vapes and Valhalla delivering growth in edibles. we also saw continued strength in our vape and edible categories maintaining a leading position in vapes and valhalla delivering growth in edibles Looking ahead, we remain focused on disciplined growth in New Jersey, including continued evaluation of expansion opportunities at our cultivation facility in Boonton and additional retail licenses as we maintain our leadership position in the state. looking ahead we remain focused on disciplined growth in new jersey including continued evaluation of expansion opportunities at our cultivation facility in boonton and additional retail licenses as we maintain our leadership position in the state In Maryland, our operations are running at approximately $75 million in annualized revenue, while gross margins were in the high 50s. in maryland our operations are running at approximately $75 million in annualized revenue while gross margins were in the high 50s During the quarter, retail revenue was stable sequentially, while wholesale revenue was modestly lower. during the quarter retail revenue was stable sequentially while wholesale revenue was modestly lower Our vertical structure and ongoing operational efficiencies have allowed us to consistently maintain strong margins even as the broader market has evolved. We continue to see benefits from our cultivation expansion, which is driving improved flower output and supporting retail and wholesale channels. Two of our four Apothecarium retail locations in Maryland ranked among the top 10 in the state during the quarter, according to Lit Alerts. On the brand side, Kind Tree and Legend are performing well, with notable growth in flower and vape categories and the successful launch of Legend pre-rolls during the first quarter, according to BDSA. In Pennsylvania, we generated year-over-year revenue growth for the fourth consecutive quarter. We also saw continued improvement in overall market share, supported by strong brand performance and disciplined execution. Our vertical structure and ongoing operational efficiencies have allowed us to consistently maintain strong margins even as the broader market has evolved. our vertical structure and ongoing operational efficiencies have allowed us to consistently maintain strong margins even as the broader market has evolved We continue to see benefits from our cultivation expansion, which is driving improved flower output and supporting retail and wholesale channels. we continue to see benefits from our cultivation expansion which is driving improved flower output and supporting retail and wholesale channels Two of our four Apothecarium retail locations in Maryland ranked among the top 10 in the state during the quarter, according to Lit Alerts. two of our four apothecarium retail locations in maryland ranked among the top 10 in the state during the quarter according to lit alerts On the brand side, Kind Tree and Legend are performing well, with notable growth in flower and vape categories and the successful launch of Legend pre-rolls during the first quarter, according to BDSA. on the brand side kind tree and legend are performing well with notable growth in flower and vape categories and the successful launch of legend pre-rolls during the first quarter according to bdsa In Pennsylvania, we generated year-over-year revenue growth for the fourth consecutive quarter. in pennsylvania we generated year-over-year revenue growth for the fourth consecutive quarter We also saw continued improvement in overall market share, supported by strong brand performance and disciplined execution. we also saw continued improvement in overall market share supported by strong brand performance and disciplined execution Wholesale revenue and retail revenue both increased year-over-year, reflecting continued strong demand across our product portfolio, including flower, vapes, and edibles. During the quarter, we launched Tyson 2.0 in Pennsylvania and Maryland, further strengthening our brand portfolio and supporting continued momentum across our wholesale and retail channels. The initial rollout featured a curated selection of premium flower and high-potency vapes available through TerrAscend's Apothecarium dispensaries and third-party wholesale partners. Five of our six Apothecarium retail locations in Pennsylvania ranked among the top 15 stores in the state during the quarter, according to Lit Alerts. On the brand side, Kind Tree and Legend saw double-digit growth quarter-over-quarter across key categories and continued share gains, according to BDSA. Wholesale revenue and retail revenue both increased year-over-year, reflecting continued strong demand across our product portfolio, including flower, vapes, and edibles. wholesale revenue and retail revenue both increased year-over-year reflecting continued strong demand across our product portfolio including flower vapes and edibles During the quarter, we launched Tyson 2.0 in Pennsylvania and Maryland, further strengthening our brand portfolio and supporting continued momentum across our wholesale and retail channels. during the quarter we launched tyson 2.0 in pennsylvania and maryland further strengthening our brand portfolio and supporting continued momentum across our wholesale and retail channels The initial rollout featured a curated selection of premium flower and high-potency vapes available through TerrAscend's Apothecarium dispensaries and third-party wholesale partners. the initial rollout featured a curated selection of premium flower and high-potency vapes available through terrascend's apothecarium dispensaries and third-party wholesale partners Five of our six Apothecarium retail locations in Pennsylvania ranked among the top 15 stores in the state during the quarter, according to Lit Alerts. five of our six apothecarium retail locations in pennsylvania ranked among the top 15 stores in the state during the quarter according to lit alerts On the brand side, Kind Tree and Legend saw double-digit growth quarter-over-quarter across key categories and continued share gains, according to BDSA. on the brand side kind tree and legend saw double-digit growth quarter-over-quarter across key categories and continued share gains according to bdsa We also saw another strong quarter in flower with record sales levels alongside significant growth in vapes and extracts, where Kind Tree remains a leading brand in the state. We continue to generate higher revenue per store relative to peers, reflecting strong execution at the retail level and the strength of our product offerings. We have a fully built-out large-scale cultivation and manufacturing facility in Pennsylvania with no need for additional capital investment, and we have already brought incremental capacity online to support increased medical and adult use demand. As part of that effort, we reactivated six additional cultivation rooms late last year, with our first harvest completed in April. We expect product to be available for sale this quarter. This will allow us to meet increased demand in the state and improve our inventory ahead of potential adult use conversion while leveraging existing infrastructure without incremental CapEx. We also saw another strong quarter in flower with record sales levels alongside significant growth in vapes and extracts, where Kind Tree remains a leading brand in the state. we also saw another strong quarter in flower with record sales levels alongside significant growth in vapes and extracts where kind tree remains a leading brand in the state We continue to generate higher revenue per store relative to peers, reflecting strong execution at the retail level and the strength of our product offerings. we continue to generate higher revenue per store relative to peers reflecting strong execution at the retail level and the strength of our product offerings We have a fully built-out large-scale cultivation and manufacturing facility in Pennsylvania with no need for additional capital investment, and we have already brought incremental capacity online to support increased medical and adult use demand. As part of that effort, we reactivated six additional cultivation rooms late last year, with our first harvest completed in April. we have a fully built-out large-scale cultivation and manufacturing facility in pennsylvania with no need for additional capital investment and we have already brought incremental capacity online to support increased medical and adult use demand. as part of that effort we reactivated six additional cultivation rooms late last year with our first harvest completed in april We expect product to be available for sale this quarter. we expect product to be available for sale this quarter This will allow us to meet increased demand in the state and improve our inventory ahead of potential adult use conversion while leveraging existing infrastructure without incremental CapEx. this will allow us to meet increased demand in the state and improve our inventory ahead of potential adult use conversion while leveraging existing infrastructure without incremental capex Looking ahead, we see Pennsylvania as a key growth market and believe our infrastructure, brand portfolio, and operating model position us to benefit meaningfully from future regulatory developments. In Ohio, Ratio Cannabis is now fully integrated into our existing operations. Our strategy in the state remains consistent, which is to build a scaled, high-quality retail footprint through discipline and accretive acquisitions. Turning to Michigan, we have now completed approximately 85% of asset sales in the state and have significantly negotiated down our liabilities and debt. We are moving into the final stage of the exit process through receivership in Michigan to further mitigate liabilities. The majority of proceeds are being used to pay down existing debt. This exit has been executed efficiently and strengthens our focus in our core markets. In closing, TerrAscend continues to demonstrate strong operational progress across our core markets of New Jersey, Maryland, and Pennsylvania. Looking ahead, we see Pennsylvania as a key growth market and believe our infrastructure, brand portfolio, and operating model position us to benefit meaningfully from future regulatory developments. looking ahead we see pennsylvania as a key growth market and believe our infrastructure brand portfolio and operating model position us to benefit meaningfully from future regulatory developments In Ohio, Ratio Cannabis is now fully integrated into our existing operations. in ohio ratio cannabis is now fully integrated into our existing operations Our strategy in the state remains consistent, which is to build a scaled, high-quality retail footprint through discipline and accretive acquisitions. our strategy in the state remains consistent which is to build a scaled high-quality retail footprint through discipline and accretive acquisitions Turning to Michigan, we have now completed approximately 85% of asset sales in the state and have significantly negotiated down our liabilities and debt. turning to michigan we have now completed approximately 85% of asset sales in the state and have significantly negotiated down our liabilities and debt We are moving into the final stage of the exit process through receivership in Michigan to further mitigate liabilities. we are moving into the final stage of the exit process through receivership in michigan to further mitigate liabilities The majority of proceeds are being used to pay down existing debt. the majority of proceeds are being used to pay down existing debt This exit has been executed efficiently and strengthens our focus in our core markets. this exit has been executed efficiently and strengthens our focus in our core markets In closing, TerrAscend continues to demonstrate strong operational progress across our core markets of New Jersey, Maryland, and Pennsylvania. in closing terrascend continues to demonstrate strong operational progress across our core markets of new jersey maryland and pennsylvania Our focus on efficiency, disciplined cost management, and vertical integration continues to support consistent growth and adjusted EBITDA margins. We have generated approximately $24.3 billion in free cash flow in the past four quarters, supported by improved working capital management and tighter inventory discipline across the business. We have generated $24.3 million in free cash flow in the last four quarters, supported by improved working capital management and tighter inventory discipline across the business. We are pleased with the foundation we have built, bolstered by our strong fundamentals, leading retail and wholesale assets in key high quality markets, a targeted M&A strategy, no material debt maturing until late 2028, consistent positive operating and free cash flow generation quarter-over-quarter, representing an impressive 10.3% free cash flow yield in Q1, best-in-class sponsorship, and a strong leadership team. Our focus on efficiency, disciplined cost management, and vertical integration continues to support consistent growth and adjusted EBITDA margins. our focus on efficiency disciplined cost management and vertical integration continues to support consistent growth and adjusted ebitda margins We have generated approximately $24.3 billion in free cash flow in the past four quarters, supported by improved working capital management and tighter inventory discipline across the business. we have generated approximately $24.3 billion in free cash flow in the past four quarters supported by improved working capital management and tighter inventory discipline across the business We have generated $24.3 million in free cash flow in the last four quarters, supported by improved working capital management and tighter inventory discipline across the business. we have generated $24.3 million in free cash flow in the last four quarters supported by improved working capital management and tighter inventory discipline across the business We are pleased with the foundation we have built, bolstered by our strong fundamentals, leading retail and wholesale assets in key high quality markets, a targeted M&A strategy, no material debt maturing until late 2028, consistent positive operating and free cash flow generation quarter-over-quarter, representing an impressive 10.3% free cash flow yield in Q1, best-in-class sponsorship, and a strong leadership team. we are pleased with the foundation we have built bolstered by our strong fundamentals leading retail and wholesale assets in key high quality markets a targeted m&a strategy no material debt maturing until late 2028 consistent positive operating and free cash flow generation quarter-over-quarter representing an impressive 10.3% free cash flow yield in q1 best-in-class sponsorship and a strong leadership team Giving all this, I am more confident in our future than I have ever been. Before I turn it over to Eric, I want to take a moment to thank Alisa for her leadership and professionalism over the past year as interim CFO. She stepped into the role during an important time of our business and did an outstanding job maintaining financial discipline, supporting our teams, and helping strengthen our financial foundation. We are extremely grateful for her contributions and look forward to her continued impact in her role as Senior Vice President, Finance, reporting to Eric. At this time, I would like to welcome our new CFO, Eric Jackson, for a few words. Giving all this, I am more confident in our future than I have ever been. giving all this i am more confident in our future than i have ever been Before I turn it over to Eric, I want to take a moment to thank Alisa for her leadership and professionalism over the past year as interim CFO. before i turn it over to eric i want to take a moment to thank alisa for her leadership and professionalism over the past year as interim cfo She stepped into the role during an important time of our business and did an outstanding job maintaining financial discipline, supporting our teams, and helping strengthen our financial foundation. she stepped into the role during an important time of our business and did an outstanding job maintaining financial discipline supporting our teams and helping strengthen our financial foundation We are extremely grateful for her contributions and look forward to her continued impact in her role as Senior Vice President, Finance, reporting to Eric. we are extremely grateful for her contributions and look forward to her continued impact in her role as senior vice president finance reporting to eric At this time, I would like to welcome our new CFO, Eric Jackson, for a few words. at this time i would like to welcome our new cfo eric jackson for a few words

Speaker 2: Thank you, Jason and Ziad, for the kind words. I'm honored to join at such an exciting time for the company and the broader cannabis industry. As a lifelong Ohio resident, I've witnessed the growth of the industry firsthand. I've had the opportunity to work in large-scale, complicated retail operations with great brands. I believe TerrAscend is uniquely positioned with a focus on high quality, high-growth markets, and a proven record of strong financial performance. I'm excited to work with Jason, Ziad, Alisa, and the rest of the team. I also look forward to introducing myself to the analyst community and loyal shareholders. With that, let me turn the call over to Alisa to provide more details on our financial results for the first quarter of 2026. Alisa. Thank you, Jason and Ziad, for the kind words. thank you jason and ziad for the kind words I'm honored to join at such an exciting time for the company and the broader cannabis industry. i'm honored to join at such an exciting time for the company and the broader cannabis industry As a lifelong Ohio resident, I've witnessed the growth of the industry firsthand. as a lifelong ohio resident i've witnessed the growth of the industry firsthand I've had the opportunity to work in large-scale, complicated retail operations with great brands. i've had the opportunity to work in large-scale complicated retail operations with great brands I believe TerrAscend is uniquely positioned with a focus on high quality, high-growth markets, and a proven record of strong financial performance. i believe terrascend is uniquely positioned with a focus on high quality high-growth markets and a proven record of strong financial performance I'm excited to work with Jason, Ziad, Alisa, and the rest of the team. i'm excited to work with jason ziad alisa and the rest of the team I also look forward to introducing myself to the analyst community and loyal shareholders. i also look forward to introducing myself to the analyst community and loyal shareholders With that, let me turn the call over to Alisa to provide more details on our financial results for the first quarter of 2026. with that let me turn the call over to alisa to provide more details on our financial results for the first quarter of 2026 Alisa. alisa

Speaker 1: Thanks, Eric, and welcome to the team. Good morning, everyone, and thank you for joining. The results I'll be reviewing today have been filed on both SEDAR+ and with the SEC, and all figures are presented in US dollars. As a reminder, all financials discussed reflect results from continuing operations. Net revenue for the first quarter of 2026 totaled $65.5 million compared to $66.1 million in the fourth quarter of 2025. Retail revenue increased sequentially while wholesale revenue declined. Gross margin for the first quarter was 52.8% compared to 52.1% in the fourth quarter of 2025. Sequential performance reflects continued strength in New Jersey, Maryland, and Pennsylvania. Thanks, Eric, and welcome to the team. thanks eric and welcome to the team Good morning, everyone, and thank you for joining. good morning everyone and thank you for joining The results I'll be reviewing today have been filed on both SEDAR+ and with the SEC, and all figures are presented in US dollars. the results i'll be reviewing today have been filed on both sedar+ and with the sec and all figures are presented in us dollars As a reminder, all financials discussed reflect results from continuing operations. as a reminder all financials discussed reflect results from continuing operations Net revenue for the first quarter of 2026 totaled $65.5 million compared to $66.1 million in the fourth quarter of 2025. net revenue for the first quarter of 2026 totaled $65.5 million compared to $66.1 million in the fourth quarter of 2025 Retail revenue increased sequentially while wholesale revenue declined. retail revenue increased sequentially while wholesale revenue declined Gross margin for the first quarter was 52.8% compared to 52.1% in the fourth quarter of 2025. gross margin for the first quarter was 52.8% compared to 52.1% in the fourth quarter of 2025 Sequential performance reflects continued strength in New Jersey, Maryland, and Pennsylvania. sequential performance reflects continued strength in new jersey maryland and pennsylvania D&A expenses for the first quarter were $21.5 million or 32.8% of revenue compared to $22.8 million or 34.4% of revenue in the fourth quarter of 2025, reflecting disciplined cost management and ongoing optimization of our operating structure. Net loss from continuing operations for the first quarter was $6.8 million compared to a net loss of $0.5 million in the fourth quarter of 2025. Adjusted EBITDA for the first quarter was $17.4 million or 26.5% of revenue, compared to $16.7 million or 25.2% of revenue in the fourth quarter of 2025. The sequential improvement reflects strong gross margins and continued operating discipline across the business. Turning to the balance sheet and cash flow. D&A expenses for the first quarter were $21.5 million or 32.8% of revenue compared to $22.8 million or 34.4% of revenue in the fourth quarter of 2025, reflecting disciplined cost management and ongoing optimization of our operating structure. d&a expenses for the first quarter were $21.5 million or 32.8% of revenue compared to $22.8 million or 34.4% of revenue in the fourth quarter of 2025 reflecting disciplined cost management and ongoing optimization of our operating structure Net loss from continuing operations for the first quarter was $6.8 million compared to a net loss of $0.5 million in the fourth quarter of 2025. net loss from continuing operations for the first quarter was $6.8 million compared to a net loss of $0.5 million in the fourth quarter of 2025 Adjusted EBITDA for the first quarter was $17.4 million or 26.5% of revenue, compared to $16.7 million or 25.2% of revenue in the fourth quarter of 2025. adjusted ebitda for the first quarter was $17.4 million or 26.5% of revenue compared to $16.7 million or 25.2% of revenue in the fourth quarter of 2025 The sequential improvement reflects strong gross margins and continued operating discipline across the business. the sequential improvement reflects strong gross margins and continued operating discipline across the business Turning to the balance sheet and cash flow. turning to the balance sheet and cash flow Cash and cash equivalents were $39.1 million as of March 31st, 2026, compared to $37.4 million as of December 31st, 2025. Cash flow from operations in the first quarter was $8.7 million, representing our 15th consecutive quarter of positive operating cash flow, achieving an operating cash flow yield of 13.3%. Capital expenditures were $0.9 million in the first quarter, primarily related to ongoing cultivation and facility optimization projects. During the quarter, we continued to allocate capital in a disciplined manner while maintaining a strong liquidity position. Free cash flow for the first quarter was $7.8 million, representing our 11th consecutive quarter of positive free cash flow, achieving a free cash flow yield of 10.3%. Similar to Q1, we expect Q2 year-over-year revenue growth of 2%-3%. Cash and cash equivalents were $39.1 million as of March 31st, 2026, compared to $37.4 million as of December 31st, 2025. cash and cash equivalents were $39.1 million as of march 31st 2026 compared to $37.4 million as of december 31st 2025 Cash flow from operations in the first quarter was $8.7 million, representing our 15th consecutive quarter of positive operating cash flow, achieving an operating cash flow yield of 13.3%. cash flow from operations in the first quarter was $8.7 million representing our 15th consecutive quarter of positive operating cash flow achieving an operating cash flow yield of 13.3% Capital expenditures were $0.9 million in the first quarter, primarily related to ongoing cultivation and facility optimization projects. capital expenditures were $0.9 million in the first quarter primarily related to ongoing cultivation and facility optimization projects During the quarter, we continued to allocate capital in a disciplined manner while maintaining a strong liquidity position. during the quarter we continued to allocate capital in a disciplined manner while maintaining a strong liquidity position Free cash flow for the first quarter was $7.8 million, representing our 11th consecutive quarter of positive free cash flow, achieving a free cash flow yield of 10.3%. free cash flow for the first quarter was $7.8 million representing our 11th consecutive quarter of positive free cash flow achieving a free cash flow yield of 10.3% Similar to Q1, we expect Q2 year-over-year revenue growth of 2%-3%. similar to q1 we expect q2 year-over-year revenue growth of 2%-3% We also expect consistent strong gross margin performance. In summary, our first quarter results reflect continued operational excellence, improving profitability, and consistent cash flow generation, supported by disciplined cost management and a strong operating platform. We look forward to sharing continued progress in the quarters ahead. This concludes our prepared remarks. I'll now turn it back to the operator for questions We also expect consistent strong gross margin performance. we also expect consistent strong gross margin performance In summary, our first quarter results reflect continued operational excellence, improving profitability, and consistent cash flow generation, supported by disciplined cost management and a strong operating platform. in summary our first quarter results reflect continued operational excellence improving profitability and consistent cash flow generation supported by disciplined cost management and a strong operating platform We look forward to sharing continued progress in the quarters ahead. we look forward to sharing continued progress in the quarters ahead This concludes our prepared remarks. this concludes our prepared remarks I'll now turn it back to the operator for questions i'll now turn it back to the operator for questions

Speaker 6: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Your first question comes from Kenric Tyghe from Canaccord Genuity. Please go ahead. Thank you. thank you Ladies and gentlemen, we will now begin the question and answer session. ladies and gentlemen we will now begin the question and answer session Your first question comes from Kenric Tyghe from Canaccord Genuity. your first question comes from kenric tyghe from canaccord genuity Please go ahead. please go ahead

Speaker 5: Thank you. Good morning. Congrats on the quarter. Jason, question for you on rescheduling and the M&A calculus. you know, obviously you're in a position here where you had an existing facility, but separately you also now have increased balance sheet flexibility or pending increased balance sheet flexibility across the industry. How does that change the calculus for you? Separate to that, has the market, or do you expect this to create increased certainty around, you know, potential M&A transactions and perhaps even a more rational backdrop as counterintuitive as that may sound? How are you thinking about it? Thank you. thank you Good morning. good morning Congrats on the quarter. congrats on the quarter Jason, question for you on rescheduling and the M&A calculus. you know, obviously you're in a position here where you had an existing facility, but separately you also now have increased balance sheet flexibility or pending increased balance sheet flexibility across the industry. jason question for you on rescheduling and the m&a calculus you know obviously you're in a position here where you had an existing facility but separately you also now have increased balance sheet flexibility or pending increased balance sheet flexibility across the industry How does that change the calculus for you? how does that change the calculus for you Separate to that, has the market, or do you expect this to create increased certainty around, you know, potential M&A transactions and perhaps even a more rational backdrop as counterintuitive as that may sound? separate to that has the market or do you expect this to create increased certainty around you know potential m&a transactions and perhaps even a more rational backdrop as counterintuitive as that may sound How are you thinking about it? how are you thinking about it

Speaker 4: Hi, Kenric. Thanks for the question. I would say there hasn't been much change on the M&A front. We've been deep in several discussions on that front. We haven't noticed any change in tone by the targets. I think that actually it makes them more, potentially more bullish on doing a deal with us because now they're looking, you know, all of these deals that we're looking at are structured, and there's a component of equity or a convert as part of the consideration. Now they're looking at our stock as something that has a higher likelihood of being able to go public on a U.S. exchange in the next, you know, say, 12 to 24 months. Hi, Kenric. hi kenric Thanks for the question. thanks for the question I would say there hasn't been much change on the M&A front. i would say there hasn't been much change on the m&a front We've been deep in several discussions on that front. we've been deep in several discussions on that front We haven't noticed any change in tone by the targets. we haven't noticed any change in tone by the targets I think that actually it makes them more, potentially more bullish on doing a deal with us because now they're looking, you know, all of these deals that we're looking at are structured, and there's a component of equity or a convert as part of the consideration. i think that actually it makes them more potentially more bullish on doing a deal with us because now they're looking you know all of these deals that we're looking at are structured and there's a component of equity or a convert as part of the consideration Now they're looking at our stock as something that has a higher likelihood of being able to go public on a U.S. exchange in the next, you know, say, 12 to 24 months. now they're looking at our stock as something that has a higher likelihood of being able to go public on a u.s exchange in the next you know say 12 to 24 months I would say, it's only been a positive. The news has only been a positive as it relates to our discussions on the, on the M&A front. I would say, it's only been a positive. i would say it's only been a positive The news has only been a positive as it relates to our discussions on the, on the M&A front. the news has only been a positive as it relates to our discussions on the on the m&a front

Speaker 5: Thank you. That's good to know. Then just separate to that or maybe a follow-up. Yeah, higher market seems to have been very challenging or more challenging than expected to get anything done in. I mean, happy to see that the integration has been completed, but any additional color you could provide on higher market dynamics and separately on higher acquisition targets and perhaps, you know, what it is that needs to reset there for you to be able to move forward and execute on some of these transactions? Thank you. thank you That's good to know. that's good to know Then just separate to that or maybe a follow-up. then just separate to that or maybe a follow-up Yeah, higher market seems to have been very challenging or more challenging than expected to get anything done in. yeah higher market seems to have been very challenging or more challenging than expected to get anything done in I mean, happy to see that the integration has been completed, but any additional color you could provide on higher market dynamics and separately on higher acquisition targets and perhaps, you know, what it is that needs to reset there for you to be able to move forward and execute on some of these transactions? i mean happy to see that the integration has been completed but any additional color you could provide on higher market dynamics and separately on higher acquisition targets and perhaps you know what it is that needs to reset there for you to be able to move forward and execute on some of these transactions

Speaker 4: Sure. I'm gonna let Ziad take that one. Sure. sure I'm gonna let Ziad take that one. i'm gonna let ziad take that one

Speaker 8: Yes. Hey, Kenric. Ohio, we have one store in Ohio today. The store is still performing well and according to our expectation. Our strategy in Ohio continues to build the same business around that we've done in similar to what we've done in Maryland and other places we acquired. The conversations, like Jason Wild said, with some of the target acquisitions are still going well. We continue to be disciplined. We are seeing some of the challenges that you are describing, but it's not impacting our M&A conversation. We have said no to some of the deals that did not make sense to us, but we continue to look at some attractive opportunities. Yes. yes Hey, Kenric. hey kenric Ohio, we have one store in Ohio today. ohio we have one store in ohio today The store is still performing well and according to our expectation. the store is still performing well and according to our expectation Our strategy in Ohio continues to build the same business around that we've done in similar to what we've done in Maryland and other places we acquired. our strategy in ohio continues to build the same business around that we've done in similar to what we've done in maryland and other places we acquired The conversations, like Jason Wild said, with some of the target acquisitions are still going well. the conversations like jason wild said with some of the target acquisitions are still going well We continue to be disciplined. we continue to be disciplined We are seeing some of the challenges that you are describing, but it's not impacting our M&A conversation. we are seeing some of the challenges that you are describing but it's not impacting our m&a conversation We have said no to some of the deals that did not make sense to us, but we continue to look at some attractive opportunities. we have said no to some of the deals that did not make sense to us but we continue to look at some attractive opportunities As you said, our balance sheet is allowing us to have those conversations, so we'll share as soon as we have more news. As you said, our balance sheet is allowing us to have those conversations, so we'll share as soon as we have more news. as you said our balance sheet is allowing us to have those conversations so we'll share as soon as we have more news

Speaker 5: Great. Thank you. I'll get back in queue. Great. great Thank you. thank you I'll get back in queue. i'll get back in queue

Speaker 6: Your next question comes from Frederico Gomes from ATB Capital Markets. Please go ahead. Your next question comes from Frederico Gomes from ATB Capital Markets. your next question comes from frederico gomes from atb capital markets Please go ahead. please go ahead

Speaker 3: Hi. Good morning, guys. Thanks for the question here, and congrats on the great quarter. First question. I think you mentioned you saw a sequential decline in wholesale for both New Jersey and Maryland. Just curious, you know, what's driving that? Is it just increased competition, price compression? Or is it maybe related to increased verticality in those two states? Hi. hi Good morning, guys. good morning guys Thanks for the question here, and congrats on the great quarter. thanks for the question here and congrats on the great quarter First question. first question I think you mentioned you saw a sequential decline in wholesale for both New Jersey and Maryland. i think you mentioned you saw a sequential decline in wholesale for both new jersey and maryland Just curious, you know, what's driving that? just curious you know what's driving that Is it just increased competition, price compression? is it just increased competition price compression Or is it maybe related to increased verticality in those two states? or is it maybe related to increased verticality in those two states

Speaker 8: Yeah, both. Hi, Fred, you nailed it. It's a combination of pricing compression, strategic decision to balance our verticality and wholesale to continue to protect the gross margin that we've been showing for five or six or maybe even eight consecutive quarters being where we are. Small part of it is timing between Q4 and Q1. Those are the reasons. When I look at wholesale and the health of our wholesale, it starts by the quality of our products and how our SKUs are performing with the patients and the customers both in our stores and in our wholesale accounts. The company in Q1 had a record of any quarter for finished goods sold both in our retail and wholesale stores. Yeah, both. yeah both Hi, Fred, you nailed it. hi fred you nailed it It's a combination of pricing compression, strategic decision to balance our verticality and wholesale to continue to protect the gross margin that we've been showing for five or six or maybe even eight consecutive quarters being where we are. it's a combination of pricing compression strategic decision to balance our verticality and wholesale to continue to protect the gross margin that we've been showing for five or six or maybe even eight consecutive quarters being where we are Small part of it is timing between Q4 and Q1. small part of it is timing between q4 and q1 Those are the reasons. those are the reasons When I look at wholesale and the health of our wholesale, it starts by the quality of our products and how our SKUs are performing with the patients and the customers both in our stores and in our wholesale accounts. when i look at wholesale and the health of our wholesale it starts by the quality of our products and how our skus are performing with the patients and the customers both in our stores and in our wholesale accounts The company in Q1 had a record of any quarter for finished goods sold both in our retail and wholesale stores. the company in q1 had a record of any quarter for finished goods sold both in our retail and wholesale stores We had the biggest market share in our Legend brand. The company also had record for single quarter finished unit sales of TerrAscend SKUs. The penetration and the number of accounts continue to be strong. We didn't see any scale back. But also we have added one very healthy store to our New Jersey store, and that's where the protection of gross margin, the increase in verticality comes in. We're gonna continue to see those shifts. Our goal in New Jersey is to add more dispensaries like Union Chill, and we'll share as soon as we have news on this. That's what gives us the confidence on that balance between revenue and gross margin. We had the biggest market share in our Legend brand. we had the biggest market share in our legend brand The company also had record for single quarter finished unit sales of TerrAscend SKUs. the company also had record for single quarter finished unit sales of terrascend skus The penetration and the number of accounts continue to be strong. the penetration and the number of accounts continue to be strong We didn't see any scale back. we didn't see any scale back But also we have added one very healthy store to our New Jersey store, and that's where the protection of gross margin, the increase in verticality comes in. but also we have added one very healthy store to our new jersey store and that's where the protection of gross margin the increase in verticality comes in We're gonna continue to see those shifts. we're gonna continue to see those shifts Our goal in New Jersey is to add more dispensaries like Union Chill, and we'll share as soon as we have news on this. our goal in new jersey is to add more dispensaries like union chill and we'll share as soon as we have news on this That's what gives us the confidence on that balance between revenue and gross margin. that's what gives us the confidence on that balance between revenue and gross margin

Speaker 3: Thank you. Appreciate that. Just second question on, I guess your margins and your G&A. A decline sequentially G&A dollars, so, you know, and obviously you have very good margins this quarter, adjusted EBITDA. But I wonder how much more is there to optimize on the G&A front. I mean, should we expect, further, optimization initiatives, or is it more about, you know, growing the top line here at this point? Thanks. Thank you. thank you Appreciate that. appreciate that Just second question on, I guess your margins and your G&A. just second question on i guess your margins and your g&a A decline sequentially G&A dollars, so, you know, and obviously you have very good margins this quarter, adjusted EBITDA. a decline sequentially g&a dollars so you know and obviously you have very good margins this quarter adjusted ebitda But I wonder how much more is there to optimize on the G&A front. but i wonder how much more is there to optimize on the g&a front I mean, should we expect, further, optimization initiatives, or is it more about, you know, growing the top line here at this point? i mean should we expect further optimization initiatives or is it more about you know growing the top line here at this point Thanks. thanks

Speaker 8: Yeah, look, first I'll start by saying I couldn't be prouder of the teams of what they've done on the G&A front and the outcomes that came out of it, both on the gross margin and the EBITDA margin. In an industry like ours, where there are constant changes, we have to be ready to continue to innovate. Innovation comes in multiple fronts, right? Strain selection and integrated business process, whereas you select a year in advance your portfolio that gives you the innovation, gives you the strains, and allow you to protect gross margin and increase yield. There's more room on this, and we'll continue to do that. Another pricing pressure will continue to happen. Yeah, look, first I'll start by saying I couldn't be prouder of the teams of what they've done on the G&A front and the outcomes that came out of it, both on the gross margin and the EBITDA margin. yeah look first i'll start by saying i couldn't be prouder of the teams of what they've done on the g&a front and the outcomes that came out of it both on the gross margin and the ebitda margin In an industry like ours, where there are constant changes, we have to be ready to continue to innovate. in an industry like ours where there are constant changes we have to be ready to continue to innovate Innovation comes in multiple fronts, right? innovation comes in multiple fronts right Strain selection and integrated business process, whereas you select a year in advance your portfolio that gives you the innovation, gives you the strains, and allow you to protect gross margin and increase yield. strain selection and integrated business process whereas you select a year in advance your portfolio that gives you the innovation gives you the strains and allow you to protect gross margin and increase yield There's more room on this, and we'll continue to do that. there's more room on this and we'll continue to do that Another pricing pressure will continue to happen. another pricing pressure will continue to happen We'll have to continue to work between our verticality and our increasing our verticality and protecting our gross margin. I would say the room that exists is protect against any headwind and to protect any pricing pressure, but I have confidence in our gross margin where we are for Q1 and delivering the same thing for the rest of the year due to that dynamic. The other point is we're launching the most number of SKUs in Q2 and Q3, which we're super excited about. I think our customers, our both patients and consumer will love what we're coming in, both strains level, partnership, and new products. With that, we need some as G&A. Some of the saving would be saving to invest in order to protect the revenue and the gross margin. We'll have to continue to work between our verticality and our increasing our verticality and protecting our gross margin. we'll have to continue to work between our verticality and our increasing our verticality and protecting our gross margin I would say the room that exists is protect against any headwind and to protect any pricing pressure, but I have confidence in our gross margin where we are for Q1 and delivering the same thing for the rest of the year due to that dynamic. i would say the room that exists is protect against any headwind and to protect any pricing pressure but i have confidence in our gross margin where we are for q1 and delivering the same thing for the rest of the year due to that dynamic The other point is we're launching the most number of SKUs in Q2 and Q3, which we're super excited about. the other point is we're launching the most number of skus in q2 and q3 which we're super excited about I think our customers, our both patients and consumer will love what we're coming in, both strains level, partnership, and new products. i think our customers our both patients and consumer will love what we're coming in both strains level partnership and new products With that, we need some as G&A. with that we need some as g&a Some of the saving would be saving to invest in order to protect the revenue and the gross margin. some of the saving would be saving to invest in order to protect the revenue and the gross margin In summary, the gross margin that you're saying both on the margins, both on gross margin and EBITDA margin are two things we're pretty comfortable with for the rest of the year. In summary, the gross margin that you're saying both on the margins, both on gross margin and EBITDA margin are two things we're pretty comfortable with for the rest of the year. in summary the gross margin that you're saying both on the margins both on gross margin and ebitda margin are two things we're pretty comfortable with for the rest of the year

Speaker 3: Thank you very much for that. Thank you very much for that. thank you very much for that

Speaker 6: As a reminder, if you have a question, please press the star followed by 1 on your touchtone phone. There are no further questions at this time. I will now turn the call over to Jason. Please continue. As a reminder, if you have a question, please press the star followed by 1 on your touchtone phone. as a reminder if you have a question please press the star followed by 1 on your touchtone phone There are no further questions at this time. there are no further questions at this time I will now turn the call over to Jason. i will now turn the call over to jason Please continue. please continue

Speaker 4: Thank you all for joining us today. We are very excited about the recent developments in the cannabis space. We hope that excitement is evident to all of you with on this earnings call, and we look forward to sharing our second quarter earnings results in the coming months. Thank you. Thank you all for joining us today. thank you all for joining us today We are very excited about the recent developments in the cannabis space. we are very excited about the recent developments in the cannabis space We hope that excitement is evident to all of you with on this earnings call, and we look forward to sharing our second quarter earnings results in the coming months. we hope that excitement is evident to all of you with on this earnings call and we look forward to sharing our second quarter earnings results in the coming months Thank you. thank you

Speaker 6: Ladies and gentlemen, this concludes today's conference call. Thank you for participation, and you may now disconnect. Have a good day. Ladies and gentlemen, this concludes today's conference call. ladies and gentlemen this concludes today's conference call Thank you for participation, and you may now disconnect. thank you for participation and you may now disconnect Have a good day. have a good day