TSND: Licensing Expansion Into Mid Atlantic Markets Will Drive Stronger Profitability

Analysts have raised their price target on TerrAscend by approximately $2.25 to about $1.98 per share. They cited expectations for stronger profit margins and a more reasonable future earnings multiple, even as they moderate revenue growth assumptions and apply a slightly higher discount rate.

What's in the News

• TerrAscend signs an exclusive licensing agreement with Mike Tyson founded cannabis brand Tyson 2.0 to launch its products across Maryland and Pennsylvania, expanding its branded portfolio in key Mid Atlantic markets (company announcement).
• Under the Tyson 2.0 deal, TerrAscend will manufacture and distribute premium flower, vapes, and edibles in Maryland, and flower, vapes, concentrates, and troches in Pennsylvania, leveraging both its Apothecarium stores and wholesale network (company announcement).
• Products under the Tyson 2.0 partnership are expected to launch in the new year at Apothecarium locations and select third party dispensaries in Maryland and Pennsylvania, which could provide a near term boost to branded product sales (company announcement).
• TerrAscend reports that from July 1, 2025 to August 21, 2025, it repurchased no additional shares, while cumulatively completing the buyback of about 1.28 million shares for approximately $0.6 million under the August 20, 2024 program (buyback tranche update).
• A subsequent update covering August 20, 2025 to September 30, 2025 shows no repurchases under the August 20, 2025 buyback authorization, indicating limited capital being deployed toward share repurchases in recent periods (buyback tranche update).

Valuation Changes

• The fair value estimate has been reduced from approximately CA$2.25 to about CA$1.98 per share, reflecting a modest downgrade in intrinsic value.
• The discount rate has increased slightly from about 6.30 percent to roughly 6.45 percent, signaling a marginally higher perceived risk profile or required return.
• Revenue growth assumptions have shifted from a strong positive outlook of roughly 95.9 percent to negative 75.2 percent, representing a significant downward revision in expected top line expansion.
• The net profit margin has been raised materially from around 1.20 percent to approximately 3.08 percent, indicating expectations for meaningfully stronger profitability.
• The future P/E has been cut sharply from about 223.4x to roughly 66.2x, suggesting a more conservative view of TerrAscend s long term earnings multiple.