CGC - TerrAscend's Jason Wild: Not All EBITDA Numbers Are Created Equally
2023-11-22 11:30:00 ET
Summary
- TerrAscend is focused on sustainable growth and profitability, with a narrow footprint and a deep, not wide, approach.
- Executive Chairman Jason Wild on achieving strong revenue growth and margin improvement.
- Pushing for legislative change with David Boies.
Listen above or on the go via Apple Podcasts or Spotify .
Transcript
Rena Sherbill: Jason Wild, welcome back to the Cannabis Investing Podcast. It's been a long while and it's great to have you back on the show.
Jason Wild: Oh, yes, absolutely. It's nice to be back. I feel like the last time I was on here was like, I don't know, 10 years ago, but it was probably two or one.
RS : Yeah, it's like cannabis years, right? It's like a couple of years ago equals something like 14 years.
JW : A lot of time.
RS : Yeah, and enough has happened in the interim.
JW : Exactly.
RS : So Executive Chairman making a lot of moves at TerrAscend ( TSNDF ). TerrAscend is making a lot of moves in the industry, getting a lot of love from analysts, from observers, from investors .
I'd love it if you, well, first of all, maybe for those that don't know you maybe a line or two about what brought you to this industry and then also how you've been thinking about and how you've been actualizing growing and leading and scaling TerrAscend to the point that you have.
JW : Sure. Yeah, so I'm originally a pharmacist, but I started a fund about 25 or so years ago, focused mostly on pharmaceutical companies and CPG as well, and we did public and private. And then in 2015 or so, I got a call from somebody up in Canada saying that they just legalized medical cannabis and they were raising money for this company that had a license.
And I had been a consumer of cannabis for 30-ish or so years and have always been a big believer in it, at least, for – in terms of how it's helped me or how it helps me think about things differently and sort of often take a new approach to solving a problem.
And I was so excited to go up and see it grow because I'd never been in one before, went up there, sort of got bitten by the bug of, this is going to be huge. They were talking all about all of the medical, the approved medical indications, or the indications that they were going to be selling it for and putting a sales force behind it, all the rest, like very similar to the pharmaceutical companies that I deal with.
But at this point was when – that was when pharma started having some issues with pricing, there was an election and everything with Valeant Pharmaceuticals and that guy who raised the price of a drug, 3000% and all of that. I felt like regular pharma was going to start getting harder. And I looked at cannabis as that it was – that it's a pharmaceutical, obviously.
But I felt like it would be the only or one of the best areas of growth over the next, say, 10 years, 20 years would be cannabis. And came back from that visit up in Canada, first visit to a grow that was – that presaged my first investment into Canopy Growth ( CGC ), which is who I was visiting.
But over the next two years, I was just like crisscrossing Canada, meeting as many companies as I could. They were all private at the time, and we invested in five of the right ones, like Canopy was our biggest position; Cronos ( CRON ), second biggest. And when they had their big investments from the CPG company, from Constellation ( STZ ) and Altria ( MO ), we were like fifth or sixth largest shareholder in the region.
So that worked out pretty well. And then, well, I'll leave it at there because you asked for something quick and we can get to some other stuff.
RS : Well, actually, I was going to – the second part of that was getting into how you’ve led TerrAscend and how you've thought about that. But as long as we took a natural break, let me break it up even further. Do you have thoughts?
And I know that this is a little bit like off-topic, but I'm just curious because it's something that we talk about on the podcast, the notion of pharma being one of the hurdles that the industry has to jump over until it gets to federal legalization. What are your thoughts on that?
JW : I don't think that for U.S. Pharma, I mean, you're asking like if I think that U.S. Pharma is like lobbying against cannabis or anything like that?
That was my original sort of network of people I spoke to the most. And I've never – I've barely ever met anybody in regular pharma that cares about cannabis or thinks of it as a threat or like there's a few of them who have thought of it as an opportunity and they've like come into the industry, or even, say, Ziad, the CEO of TerrAscend, he worked at a Walgreens ( WBA ) for 17 years.
So that's more on the pharmacy side, but I've never really heard about pharma companies lobbying against cannabis or any progress in cannabis. And often when I – I'll see people make different statements about, well, they want to – if competing with Ambien and Xanax for sleep, for people at night.
But like, even those, those are like all of those products and brands have been genericized so many years ago that there's not enough money even in those things where it would make sort of a logical sense, I mean, pharma companies stop promoting products when they don't have exclusive brands anymore generally.
So that's my view. I mean, I think once they want to get in, once they get more interested in it and they see sort of some of the large opportunities, I think, that's when they're going to want to jump in, but I haven't really seen much of that either over the last few years.
RS : Do you think the major players are waiting for federal legalization?
JW : I think the ones that are a little bit more CPG-like, say, the over-the-counter stuff, I think that they're going to be the ones that are interested. I think the ones that are, they have mostly prescription products, say, the Eli Lillys ( LLY ) of the world and a bunch of – the other ones, even Pfizer ( PFE ), I think, that they will probably never be interested in it because they spend billions and billions of dollars in R&D.
And what they're focused on is getting products that have NCE patents, new chemical entity patents that are going to be 10-plus years of patent protection. And I just don't see them thinking there's enough differentiability in cannabis that they're going to be able to do that.
I think maybe, like I said, CPG, that's why you've seen even Constellation Brands, right? I think the spirits companies, I think that they do see, and the beer companies, I think they do see cannabis as a threat, and that's why they're being a little bit more proactive.
But like I said, pharma, I think, they don't really care. And I think that once legalization comes, they'll care on the over-the-counter side. But they – and maybe even a company like an Israeli company, I believe, Perrigo, companies like that will care because they're generics, it's similar to in cannabis, where there's not a lot of – a ton of brand differentiation or anything like that, and it's a big market. But companies like that are sort of more focused on, they don't need to have 92% gross margins, they're okay with 70% gross margins.
And they'll be there eventually.
RS : Thinking of a segue after you answered this part, but how have you thought about growing and scaling TerrAscend from when you came on board until now where you're seeing a lot of realizations to, I think, what you've been planning for or some realizations you’ve been planning?
JW : So we – yeah, our approach has been from the beginning to be more deep, not wide, because if you spread yourself too thin, then you're going to have subscale assets in more states, but we felt like it wasn't going to really position us for success in those states.
We'd rather be more focused, spend more money, get more scale, say, like what we did in Jersey. Even us, multi-state operators, we're competing with single state operators, which are more like mom and pops. And they have an edge over another company that's operating in multiple states, just because they are able to keep an eye on the shop and they've got that sort of more personal connection to it and they're more levered to obviously to the success of it.
I think that as you go up in terms of the states that you have in your portfolio, that that even gets harder, obviously. So when there's other operators that operate in 15 states, I feel like us being in five, which is where we're at right now, like I feel like we have an advantage over them.
And even over the single state operators, I feel like as long as we are really focused on sort of SOPs and driving efficiencies and sort of sharing them across all of our states in the map and all of that, that we can certainly compete really well against the single state operators. But our view has always been that we could also compete against the bigger guys if they're spread too thin.
So that's sort of been the approach. And our other thing is we have been, especially for the last year, really focused on cash flow, not EBITDA. Because the way the taxes work, as you know, you could be EBITDA positive. But after taxes and high interest loans, you could have dug yourself really far on the hole on a quarterly basis.
And we set out, over a year ago, to really make sure that that was not the case, that we would be cash flow positive even after taxes and all the rest. And we've gotten ourselves there essentially in the last couple of quarters.
And even there, the only way to do that is if you're focused and you're driving like all EBITDA numbers, if you looked across the whole, all the public companies, they're not all created equally. Because if it's like a 15% or a 20% EBITDA margin, then you're not going to actually clear any cash and not dig yourself in the hole after taxes and interest. But if you have a 30% EBITDA margin, then you can generate a lot of cash. And the way that you do that is by having that scale, I guess.
RS : Do you have any thoughts on this notion of paying your taxes and how to pay them and when to pay them as a cannabis company waiting for more legislation down the pike? What are your thoughts on that?
JW : Yeah, I think most of the companies, no, no, not most of them, let me take that back. Many of the companies have stopped paying taxes. Their view is that if anything happens to reverse that where we get, say, rescheduling, which should get rid of 280E, or even, I don't know, some people think that somehow they might be able to get their money back for years back, for the last several years for whatever they paid.
And then the view is generally like, it's better to hold on to it. If we – if they think we think that something like that is going to happen as opposed to paying it to the government and trying to claw it back, we – but we helped support a case that was filed with David Boies , where there's a case that we're hoping to get to the Supreme Court. And if we win that case, we believe that we will be able to get several years of back taxes refunded.
But I think the view of a lot of these operators is that, like I said, they'd rather just – they'd rather hold onto it as opposed to pay it back and try to claw it back, especially when interest rates on debt nowadays is not any cheaper than essentially borrowing that money from the government in terms of paying the interest charges and all that.
RS : Right. So speaking to this David Boies case that you have, a, coming to – coming back to the question that I had before, which is what is preventing federal legislation - legalization?
And then also, how did this case come about? Was it totally separate from the TSX thing ? Was it years in development? How did they – how did you guys come on board?
JW : Yeah. So in terms of – I think in terms of legislation overall and what, like what I would handicap is going to happen and in what order, I think, the rescheduling is probably going to be the nearest term driver. And that would, like I said, I think that could turn 280E going forward. And that's because 280E only applies to Schedule 1 and Schedule 2.
So it's not a matter of it even like if it goes to Schedule 3, it still won't be legal, especially like under – if it's sold under rec, but that 280E won’t – looks like it would not apply. And that would be, I think, that has the highest likelihood of happening, especially like in the near-term.
In terms of SAFE Banking , I mean, who knows? We've all sort of had that snatched away several times over the last few years. And to be honest, like I don't even know how much it does. It's like – it’s almost not a whole lot compared to the impact of rescheduling.
I mean, I think one of the big things that people thought from a SAFE is that it could have the building blocks to eventually be listed. Also companies I believe would hopefully be able to take credit cards, but it didn't get rid of 280E. I don't think and that's the – that's sort of the biggest problem for the industry as a whole at this point, and especially for the last couple of years.
And then you've got the case that I just mentioned with David Boies, that's been – being worked on independently of any of that other stuff. But it's been, yeah, we've been trying to sort of build that coalition for, I mean, it's been like almost two years at this point. And it's like, I think a year-and-a-half or so ago, there were a couple of companies that had agreed to sort of try to move it forward.
But then last year, when everybody thought SAFE was happening, we ended up not being able to get any other – any people to help support it. And then what happened when SAFE failed again at the end of last year, that's when we were finally able to sort of get enough buy-in because people realized that there needs to be multiple paths towards getting reform and we can't – certainly can't rely on the legislative path to happen in a timely manner.
And all of these things, I think, apply pressure to the others. Like a big part of this David Boies case is that it should – that's going to take a while, I figured two-and-a-half years or so to the – to like to the Supreme Court.
But in the meantime, it should apply pressure to Congress because the narrative essentially should be something to the effect of, hey, Congress, or hey, Schumer, you didn't do your job. And now the conservative-led Supreme Court need to legalize cannabis for you, or need to fix it for you.
And generally, Congress doesn't like that. I think they would especially dislike the fact that a sort of a democratic sort of position in terms of cannabis legalization could end up having it where the democrats didn't do anything and it was the conservatives that did it.
So that's sort of how all of that stuff interplays, but we think that it does apply pressure and again it's just another route if these other things fail. And then the TSX was a totally separate thing. We've – TerrAscend has done some things that are – we're different than a lot of the other MSOs because we're the only company that started out as a Canadian LP in Canada.
We pivoted the company into the U.S. in the summer or so of 2018, because we came to the realization that we just don't think the Canadian market would be big enough to support sort of the type of company we wanted to build.
RS : A wise decision.
JW : But we’ve over those years, because we originally – Canopy Growth originally co-invested in TerrAscend with me in 2017. We've been sort of on the cutting-edge a little bit in terms of figuring out which type of structures the TSX would be comfortable with.
And we did that in the past when we turned the Canopy shares into these exchangeable shares, which allowed them to hold on without being offsides with the TSX and the NASDAQ, and just keeping a close eye on what they've been doing.
And then we're in Canopy a year or so ago, so that they're going to step into their ownership of those U.S. assets and be able to stay on the TSX. We immediately sort of rekindled our conversations with the TSX and realized that we would not have to – the way we're structured, it would not be a very, very heavy lift in order to get into a structure that would satisfy any of the TSX's concerns.
RS : So would you say that what needs to happen is this kind of putting the politicians, the regulators feet to the fire and just applying a lot of pressure because it's inertia, laziness, stigma, whatever. Yeah.
JW : Yeah. I think I came to the realization I was not very happy on December 31st of last year. I was just sort of recollecting the prior 12 months. And I think what really hit me was that it's not that there's not that much opposition to cannabis legislation like relative to other issues.
I think it's that nobody cares enough on the politicians that are on our side, it's not a priority for them. It's just, I think, we've seen that over the last few years. I got, I don't doubt that they are for SAFE Banking or whatever else they claim that they're for. But when it comes down to like what's important to them and what are they really hearing a whole lot from their constituents, I don't think cannabis is very high on the list.
So to me even, like that's why the Supreme Court case should apply pressure because now, like, they've been complacent because there was no – nobody was going to like sort of steal the ball from them. But now I think if once Congress realizes that there's a chance that that could happen, maybe that's what gets them to sort of do something, but…
RS : On and on this lovely world of ours goes. Competition to drive change.
JW : So it feels nice to not be passive anymore.
RS : No, I mean, that's the greatest thing. I mean, you are being an agent of change, you're being the change that you want to see. I think you, as an example, is a great example. I think on the other side of it, it's a lot of despair and depressing thoughts. But I mean how does change happen, by interested individuals coming together. And that's what you guys are banding together to do. So kudos for that.
JW : Yeah. Thank you.
RS : In terms – and may I just add, as long as I'm publicly giving you kudos, I would like to say, like, as I'm talking about your leadership, I will say as somebody talking to a bunch of different people in the industry, I've always heard really nice things about you and not when I'm like, what do you think about, Jason Wild, just apropos of nothing, people are always saying what a mensch you are. So kudos for that too, which is probably more important.
JW : Oh, thank you. Yeah. Thank you so much.
RS : Well, it's nice to be a good person and public declarations to support it are few and far between. So let's all be part of that positive change.
JW : Yeah, yeah, absolutely. Thanks so much.
RS : Yeah. So speaking of positive change and also the ways that the world kind of moves to circumvent those changes from coming to pass, we've had these conversations on the podcast, Jerry Derevyanny from Bengal Capital was on talking about even if they get rid of 280E, they're going to put something else in its place. What are your thoughts about that in terms of companies gaining some advantage just to have kind of the regulators put something else in its place?
JW : I think it depends what happens. I think – and let me just say clearly the disclaimer that I don't make any real investments based upon my opinions here, because I'm not an expert in what happens in Washington and all of that – all of the legislative stuff.
But here's my logical thinking of it. If rescheduling happens, then 280E just doesn't apply. I don't think that that is something where they're going to say, well, we have to go and replace that and replace those lost revenues.
It's like, if the speed limit goes from 50 to 75, and they used to get people tickets because they were driving 55, say, we have to go make up that money. It's like that was a penalty for being a Schedule 1 or Schedule 2 drug. I'm not sure if that makes sense, but like I don’t – I just don't see how that gets worked in because that is more, I believe, more legislative.
And if Congress sort of misses the opportunity here because rescheduling happens first or because the David Boies case brings some type of result first, then I think that they're not going to have the advantage of being able to put in any tax regimes.
And remember, like I think, in my view, rescheduling should just, if it goes to Schedule 3, I believe they're probably just going to say, we defer to the states to do whatever they're doing up until this point. If it's illegal, then it's still - in a state, then it's still going to be illegal in the eyes of the Federal government.
But the point is it's just a Schedule 3 drug. I think that the states, like they are already getting all of these taxes and these like whatever type of use taxes or whatever you want to call it around all of this. It's just that the government was also getting – on top of all that was getting like 9% of everybody's sales and that should go away with 280E, with a schedule, with a reschedule.
That's like legalization where or de-scheduling or something that Congress has some control of. And I don't see that happening anytime soon. And I just feel like the horse is going to be out of the barn. And again, we are paying all of those types of taxes. We're just paying them to the state.
RS : So how do you see this next year going? I mean, we talked about your positive earnings . There were a bunch of analysts that came out and increased their ratings on the stock. Do you think things like, I mean, I know that they help, but do you think that it pushes us somewhere as an industry?
Do you think the rising tides of these companies that are doing well like TerrAscend, do you think it helps volume? Do you think that helps push things? Or do we need some kind of real legislative change to make that happen?
JW : Yeah, I mean, we sort of purposefully set out to not need it, and we've been able to get ourselves there. I mean, we needed like, there's other examples of companies as well that are even bigger than us that have proven that you can do that and have positive cash flow.
At this point, we've got a sustainable company that should continue to be sustainable and profitable going forward. And because we have such a narrow footprint, we have some real nice levers for growth in terms of adding additional states.
But I think that there's others that absolutely need for something like this to happen because they are – like, they need a lifeline. Like, there’s a lot of – there are a lot of zombie companies out there. And it's because the equities went down for two-plus straight years so nobody raised equity. They only raised debt.
And now, even though a lot of them have gotten themselves to EBITDA positive, like when you have mid-teens to high-teens interest rate debt, like it's not just good enough to have some positive EBITDA. You have to have like substantial positive EBITDA to be able to cover those high interest expenses.
And I feel like there's a lot of companies that are in that situation. And this is going to be – this could be a lifeline for them because all of a sudden their cash flow is going to get much better, or even if they weren't paying their taxes, now they're not having to accrue those high taxes, and it's going to make everybody a better credit.
I mean, like rates, assuming everything else being equal in terms of interest rates nationwide , I would think that this should lower rates because these businesses are not as risky with that sort of tax burden put aside.
So like what we've always said and what we've said certainly more recently is we don't need it in terms of any of this reform, but it would certainly supercharge our business. And I'd love to be thinking about what we do with the extra, say, $11-plus million a quarter at our current run rate in tax savings.
Like, if the stocks all continue to, or if we feel like our stock continues to not trade at what we think is a more fair valuation in terms of the fundamentals, then I'd love to be able to say for as long as that's the case, out of that extra $11 million, we're going to spend half of it on buying back stock.
The numbers don't work as well when you have these high tax rates. Once the tax is normalized to whatever – how every other company is treated, a lot of things are going to work in terms of buybacks, or even companies could do – take privates or LBOs. But you can't do those when you got the taxes and those high interest rates on the debt.
RS : Yeah. I was talking to somebody today about retail investors and they were saying, make sure that they've paid all their credit card debt before they start adjusting in stocks. And it's kind of like that. Like you've got to get the basics before you can do stuff like buybacks.
JW : Yes, absolutely.
RS : So in terms of growing this year, I've heard you mention that you're not directly looking at M&A. Is the focus these days more on states that you would get into as opposed to assets you might pick up?
JW : Both. Maybe I should back up a little and give a – I’ll give a little more sort of some facts around like what we did other than just realizing that we needed to build this business to be sustainable, independent of any reform, like the actual sort of actions we took were we had – we realized we needed to cut costs at a good – we had to cut out a good chunk of our cost.
We took out like $12 million to $15 million in expenses last year. We refinanced some debt in Michigan, but we paid down like $30 million out of $55 million. We equitized the debt with Canopy Growth, where TerrAscend owed them $90 million. And we – they agreed to convert that into stock at like $5 or so a share.
So all of those things, they cut our interest expense. It increased - the cost cuts increased obviously our profitability. And we now feel like, over the last few quarters, we've gotten – we’ve shown not just a strong revenue growth, but also margin improvement, gross margin, and reducing our operating expenses as a percentage of our total sales. Those have all trended in the right direction for us. And like I said, I think a lot of it is due to the benefit of that scale.
But what we said on our most recent call is now that we're up to, say, back up to 27ish-percent EBITDA margins in the last quarter and our gross margins are – in the last quarter were 53.6, which is like a huge, huge progress for us over the last year or so. Now we feel like we're ready to go, how we described it was a deeper and wider. That means acquiring more assets and, say, more retail assets in the states where you can do that, where there's no caps, like, say, Michigan.
Like, the beauty of Michigan's been a tough state, but we really turned that around and got our margins there up, I think, like almost doubled over the last year or so. But the beauty of Michigan is that once you get it right in Michigan, you could have 150 stores, because there's no license caps. And that is, I'm not saying we want to be at 150 tomorrow, but we're at about 19 right now in Michigan. And there's a lot of deals we're looking at in Michigan, which sort of the combination would make us one of the top operators or the top operator in the state.
So we're looking at those kind of things going deeper in Pennsylvania as well. New Jersey just passed a sort of a social equity, they call it a franchise bill, where we can own up to 35% of another seven dispensaries in the state. But they'll let you do MSAs and other things to be able to even capture even more of the sales and the profitability of those stores. And you could even – we could even name them under our apothecary and banner.
So that's getting deeper and that should drive more scale and better margins. And now we think also that we're ready to add another couple of states over the next 12 months. So it's really sort of equal priorities there. And we think that just like that's a position that we're in that practically none of the other large MSOs are because they're already in so many of these states.
We can go do what we just did in Maryland two quarters ago where we entered the year with 0 retail and rec starting on July 1, then we were able to swoop in and get to the four cap on dispensaries. Like in the waning days of June, we think we’re – we think we can sort of enter some other states, get some of the best assets because we can sort of pick from everything that's available.
They all still have low – very low valuation expectations and we can come into – some of our competitors are in these states, and they got their early and valued sort of speed to market. And now we can come in with valuing sort of like we just – that we just want to buy the best operations in the state. And we think that we should be able to compete really well and with the layering on of all those states, generate amongst the best revenue growth over the next several years.
RS : And do you have those places in mind? Are you pretty set on where that is? Or are you still looking to how things are kind of shaping up?
JW : I mean, we're always sort of keeping our eyes open to change our views on what states we want to be in. And even with rescheduling, if that changes and there's no 280E, that could end up – we've generally kept away from like just retail because it's too hard to have cash flow after 280E.
Retail is more disadvantaged than wholesale. But things like that could certainly change, obviously, if we got rescheduling.
In the meantime, our view is in terms of adding additional states, we want to be as opportunistic as we can be, which means, I've always found any companies that were ever, we have to be in this state, those are the ones that the sellers know that they have to be in that state and they're willing to overpay and often those deals don't work out well.
Our view is there's, say, five states that we're pretty interested in, figure most of them not too far from the states we currently operate in, and we're going to wait for those best opportunities to come up.
But there's multiple active good discussions of several multi-state operators who – where their footprint would overlap with us really well or whether they – or in a lot of cases, we'll be like, okay, we're interested in these two states, but you'd have to keep the other two or get rid of the other two or something like that.
So lots of potential deals on the table, but I look at it like you're going fishing and you drop in six lines over the side. And you think that one or two of them are going to end up having a fish on the line, but you don't know which one. So we just sort of have to turn over as many stones as we can to get to be able to pick the absolute best ones.
RS : Well, it's a good analogy, because I think it speaks also to what you're describing in terms of setting yourself up for success is that you try and lessen the amounts of ways that you're not going to be successful and increasing your chances of being successful.
What – speaking to the risk, and there's a lot of unknowables and we can't control most things in this world. What makes you nervous even though that you've put a lot in place to kind of protect your position? What worries you the most about even just the coming year or the coming months?
JW : What worries me the most? I would say, I'm not I would say like a year ago, I wouldn't say I was worried, but I was more stressed in terms of doing all the things that we knew that we needed to do.
And now it's almost like I have slightly mixed feelings on all of these – all of these things that would certainly be positive for us and for the whole industry. I feel like at this point, it’s sort of, we’ve, for the last six months, we've sort of been saying internally, like it's so bad that it's good.
And I guess my only thought is, and it would be a good problem to have. But if all of a sudden rescheduling comes and all of a sudden us and so many of the other players are so much more profitable, at some point, you would think that that's going to bring in some more competition.
But my view is that's what people have even asked me a bunch of – a bunch about like, what happens if there's interstate commerce? And that's further, I think, that's a little further out.
But like my view is on that, like I think it's probably inevitable, but if that's where, what we've come to, which is that interstate commerce has been legalized, then that also means that we could be that we're allowed to be listed on U.S. exchanges. It means that all the big CPG companies and drug companies and all that can enter the space as well.
So I think, like, that's a – that’s sort of a decision that we might sort of look to exit into a situation where it's like a much better situation than now. But it might almost, I don't know, sort of make, in my view, it might make us exit a little sooner if all this progress happens sooner because eventually, it's going to be all big companies in there, like meaning, like big non-current cannabis companies.
RS : Are you still happy that you got into cannabis?
JW : Am I happy that I got into cannabis? If you looked at TerrAscend and looked at where we started in 2017, when I first invested in the company with Canopy Growth and we had 0 revenues. And now we're doing – last quarter, we did 89 and change million dollars in revenue in the quarter with $24 million in adjusted EBITDA and real cash flow and all of that.
If you asked me about that, I would say that that's been better-than-expected, even though there's been a lot of ups and downs in between. But then if you told me how much we were rewarded up until this point, from a stock price perspective, I would not be very excited. I'd probably be pretty surprised.
It's just the one thing is like, I don't mind if it takes a lot. I never, from my investing perspective, I don't usually mind if it takes a lot longer than I expect as long as it is what I expect eventually happens.
And all of this – all this pain that the sector has gone through, I mean, I think that this is, I think, it's been good for us. I think it's made us better because we wouldn't have been able to survive if it didn't happen. And if the whole sector was moving in unison like it was back in – to the upside, like it was back in 2020, that's never sustainable when everybody is doing really well.
So not that I want to see others suffer, but the fact that this space has been almost impossible and we've been able to get to where we are right now, that's where I have the, like I said, that’s where I have those mixed thoughts.
I mean, I'm going to keep moving forward and all the David Boies stuff and all of that, but maybe a lot of these other companies don't deserve a lifeline. But they'll mess it up again anyway. Like even the ones that get the lifeline, I feel like, my dad used to always tell me like he who f**** up usually continues to f*** up.
RS : Right. Somebody was saying that also, if they're losing this money, they're going to lose the next money that you give them too. They're just going to keep losing it.
Well, this has been another great conversation. Jason, anything to leave retail investors with that's mostly our audience, how they should be thinking about the cannabis industry?
JW : To leave people with, I would say, there's definitely, there's winners and losers now in the space more so than a few years ago. I would say, don't focus too much on the reform. It's funny, I'm saying that as we just, as I just spent a whole lot of time talking about it.
But like the point is, there's no way I've never met anybody who's ever made a lot of money, like in my Wall Street years, like it's a general rule that you can't make money betting on what's going to happen in Washington.
And I think that's been confirmed with the experience in the space over the last few years. But if you own companies that are sustainable, that are – have cash flow in excess of all those taxes and high interest, then if all of that stuff that everybody's focused on with the reform, if it actually happens, then those are going to be – those are going to end up turning out to be the best operators.
So I know it's often more tempting to buy the ones that are like on death's door, that are going to triple if the news comes out. But I would stay away from those, there's so many companies that have huge sort of growth opportunities if we get that news. And in the meantime, they're like sort of eating while they dream.
RS : Yeah, I would say the biggest takeaway probably, I hope from this podcast is stick with the ones that are doing well during the crappy times because they're for sure going to be the ones doing well during the good times.
Jason, I really appreciate it. I'm looking forward to the next conversation and looking forward to what else TerrAscend has in store and what other envelopes you're going to push.
JW : I'm looking forward to updating you on all of that, hopefully, sooner than another two years or so.
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TerrAscend's Jason Wild: Not All EBITDA Numbers Are Created Equally