TerrAscend Corp. (CSE: TER) (OTC: TRSSF) decided to celebrate 420 by filing its preliminary proxy statement with the U.S. Securities and Exchange Commission in its next step to listing on the Toronto Stock Exchange (the TSX). While the company had hoped to time the release at 4:20pm, it managed to post the notice at 5:30pm. Shareholders will first have to approve the proposed transaction, which is expected, and the listing would come shortly thereafter. The meeting is scheduled for June 22, 2023 and the proposal requires approval by 66 2 ⁄3% of the votes cast.
In addition to the filing, TerrAscend also announced that it increased its ownership interest in Cookies Retail Canada Corp. to 95% of the issued and outstanding shares.
“We continue to make progress on our strategy to list on the TSX. Assuming the proposed reorganization is approved by our shareholders and the TSX grants approval for the listing of TerrAscend’s common shares, we should be in a position to commence trading on the TSX shortly thereafter. We are grateful to the TSX for their leadership and collaborative work in helping to create this opportunity for TerrAscend and its stakeholders,” said Jason Wild, Executive Chairman of TerrAscend.
Reorganization
In order for the company to list on the TSX, TerrAscend has to reorganize businesses internally. The TSX will not allow companies doing business with U.S. cannabis to list on the exchange since cannabis remains a federally illegal drug. TerrAscend Growth Corp. (formerly Gage Growth Corp.), a wholly owned subsidiary of TerrAscend entered into a subscription agreement with an investor who has subscribed for $1 million of class A shares of TerrAscend Growth. Once that investment closes and if the corporation satisfies the listing and regulatory requirements of the TSX and obtains TSX approval, TerrAscend expects that the TSX Listing will occur shortly thereafter.
TerrAscend currently holds Class B shares of TerrAscend Growth, representing 100% of the issued and outstanding shares of TerrAscend Growth. In accordance with the TerrAscend Growth articles, such Class B Shares will automatically, without any action on behalf of TerrAscend, be exchanged for non-voting non-participating exchangeable shares of TerrAscend Growth immediately upon issuance of the Class A Shares to the investor and the closing of the investment in order to sever the company’s Canadian cannabis operations and interests from its U.S. cannabis operations and interests that are held through TerrAscend Growth.
The filing noted that “TerrAscend Growth will hold a call right to repurchase all of the Class A Shares issuable to the Investor and the Investor will be granted the right to appoint a director to the TerrAscend Growth board of directors and a put right that is exercisable at any time following the five-year anniversary of the closing of the Investment.”
Cookies
As part of the company’s overall Canadian strategy, TerrAscend increased its ownership interest in Cookies to 95% of the issued and outstanding shares and such ownership interest will be transferred to TerrAscend Canada in order to sever its Canadian cannabis operations and interests from its U.S. cannabis operations and interests. Following the TerrAscend Canada Transfer, TerrAscend will own (i) indirectly through TerrAscend Canada, the Canadian cannabis business, including the Cookies retail cannabis business as well as TerrAscend’s intellectual property portfolio, and (ii) through TerrAscend Growth, all of the U.S. cannabis interests. (Full Story)