TerrAscend Reports Q1 2026 Revenue Growth, Positive Free Cash Flow, Net Loss Widens

TerrAscend (TSX: TSND) reported first-quarter 2026 net revenue of $65.5 million, up 1.9% year-over-year, while maintaining positive operating cash flow and free cash flow despite posting a GAAP net loss of $6.8 million from continuing operations.

The company generated gross profit margins of 52.8% during the quarter and reported adjusted EBITDA from continuing operations of $17.4 million, representing a 26.5% adjusted EBITDA margin.

TerrAscend’s results come as U.S. cannabis operators continue navigating margin pressure, capital constraints, and evolving federal cannabis policy, including the Department of Justice’s recent decision to reclassify state-licensed medical cannabis to Schedule III.

Revenue Growth Returns, But Sequential Sales Slip

Net revenue totaled $65.5 million in Q1 2026, compared to $64.3 million in the prior-year quarter and $66.1 million in Q4 2025.

The company said retail revenue increased sequentially, while wholesale revenue declined.

Gross profit remained relatively stable at $34.6 million versus $34.7 million in Q1 2025. Gross margin improved sequentially to 52.8% from 52.1% in Q4 2025, although it declined from 53.9% a year earlier.

TerrAscend attributed sequential margin improvement to performance in Maryland, Pennsylvania and New Jersey.

Adjusted EBITDA Improves Sequentially

Adjusted EBITDA from continuing operations reached $17.4 million, up from $16.7 million in Q4 2025 but below the $18.1 million reported in Q1 2025.

Adjusted EBITDA margin improved sequentially to 26.5% from 25.2% in the prior quarter, though it declined from 28.2% in the year-ago period.

EBITDA from continuing operations totaled $17.3 million.

The company’s reconciliation showed adjustments included:

$885,000 in share-based compensation
a $1.4 million gain on derivative liabilities
foreign exchange adjustments
other one-time items

Net Loss Continues Despite Positive EBITDA

TerrAscend reported a GAAP net loss from continuing operations of $6.8 million during the quarter, compared to a net loss of $7.7 million in Q1 2025 and a net loss of $0.5 million in Q4 2025.

Total net loss, including discontinued operations, was $8 million.

Finance and other expenses totaled $9.3 million during the quarter, while income tax provisions reached $10.3 million.

Income from operations before taxes was $11.5 million.

The company’s liability on uncertain tax positions increased to $138.8 million as of March 31, 2026, up from $128.8 million at year-end 2025.

Cash Flow Remains Positive

TerrAscend generated $8.7 million in net cash provided by continuing operations during Q1 2026, marking its fifteenth consecutive quarter of positive operating cash flow.

Free cash flow totaled $7.8 million, representing the company’s eleventh consecutive quarter of positive free cash flow.

Operating cash flow declined from $11.2 million in Q1 2025, while free cash flow declined from $8.8 million in the prior-year quarter.

Capital expenditures were limited to $865,000 during the quarter, primarily tied to cultivation and facility optimization projects.

Cash and cash equivalents increased to approximately $39 million at quarter-end from $37.4 million at the end of 2025.

Debt And Balance Sheet Snapshot

TerrAscend reported total liabilities of approximately $458.2 million against total shareholders’ equity of $90.9 million.

Loans payable totaled roughly $205.7 million as of March 31, 2026, while convertible debt stood at approximately $17.4 million.

The company also reported:

$36.2 million in inventory
$15.5 million in accounts receivable
$177.3 million in intangible assets
$110.8 million in goodwill

TerrAscend repurchased 115,000 shares during the quarter at a weighted average price of $0.66 per share.

Retail Performance In Core Markets

TerrAscend highlighted continued retail performance in New Jersey, Maryland, and Pennsylvania.

According to the company:

All three Apothecarium stores in New Jersey ranked within the state’s top 25 dispensaries
Two Maryland Apothecarium locations ranked among the top 10 in the state
Five of six Pennsylvania Apothecarium stores ranked among the top 15 statewide

The company also launched Tyson 2.0 products in Pennsylvania and Maryland under an exclusive licensing agreement.

Schedule III Rescheduling Remains Central Focus

Executive Chairman Jason Wild said the Department of Justice’s decision to move state-licensed medical cannabis to Schedule III eliminated the 280E tax burden on medical cannabis operations and could improve access to institutional capital over time.

The company also stated that broader adult-use cannabis rescheduling remains pending, with hearings scheduled for June 2026.

TerrAscend said it believes future regulatory developments could eventually create a pathway toward a potential Nasdaq or NYSE listing.

Price Action

At the time of writing, shares of TSX: TSND were trading at CAD $1.01, down 0.98% on the day.