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TerrAscend Corp. (TSX: TSND) (OTCQX: TSNDF) reported second-quarter net revenue of $67.1 million, up 2.4% sequentially and 3.3% year-over-year. In a normal industry those would be unremarkable numbers. In this one, on a week where Verano's operating income fell 88% and Green Thumb's fell by half, TerrAscend just posted its sixteenth consecutive quarter of positive operating cash flow and its twelfth consecutive quarter of positive free cash flow.

That streak is the story. Almost nobody else in cannabis can claim it.

Margins going the right direction

Gross margin reached 54.0%, up 120 basis points sequentially and 290 basis points year-over-year, from 51.1%. Gross profit of $36.3 million on revenue that grew 3.3% — that's margin expansion in the same quarter Verano's gross margin fell ten points and Green Thumb's fell five.

Executive Chairman Jason Wild attributed it to sequential revenue growth across New Jersey, Maryland and Pennsylvania, with strength in both retail and wholesale. Notably, TerrAscend isn't leaning on wholesale to paper over retail weakness the way Jushi and Curaleaf are — both channels contributed.

Adjusted EBITDA was $17.7 million, or 26.3% of revenue, up 11% year-over-year from $16.0 million and $17.4 million last quarter. The margin ticked down 20bps sequentially but sits 170bps above the year-ago period.

The one blemish: G&A rose to $22.9 million, or 34.0% of revenue, from 32.8% last quarter and 32.3% a year ago. Overhead is growing faster than the top line — the same disease afflicting the entire cohort, just at a milder grade here.

The GAAP number needs context

Net loss from continuing operations widened to $10.1 million, from $6.8 million last quarter and $6.4 million a year ago. That looks bad next to expanding margins and rising EBITDA.

Note the gap between EBITDA of $14.8 million and adjusted EBITDA of $17.7 million — a $2.9 million spread, wider than last quarter's $0.1 million. Something non-operating landed this period, and the release doesn't itemize it. Given the quarter included a convertible debenture refinancing and a $10 million term loan paydown, financing-related charges are the likely culprit, but that's inference, not disclosure. Worth a question on the call.

Also worth remembering: all Michigan assets are classified as discontinued operations, with historical periods restated. TerrAscend has been shrinking deliberately for a year. These are the numbers from what remains, which is the correct way to read them.

The cash story is genuinely differentiated

Net cash from continuing operations was $7.4 million. Capex was $1.6 million — modest, aimed at cultivation and facility optimization. Free cash flow was $5.7 million.

Management frames those as a 12.5% operating cash flow yield and 9.9% free cash flow yield on a trailing twelve-month basis against market value at June 30. Take that with appropriate salt — yields calculated against a depressed market cap flatter themselves. But the underlying point holds: this business converts revenue to cash, consistently, without heroic assumptions.

Compare across the cohort. Green Thumb generated $29.0 million of operating cash flow on $306.7 million of revenue — a 9.5% conversion. TerrAscend converted 11.0% on a fifth the revenue. Verano converted 14.2%. TerrAscend isn't the best on that metric, but it's the only one that's done it sixteen quarters running.

Balance sheet work, and it's real work

The quarter's financing activity was the most productive part of the print.

TerrAscend completed an oversubscribed convertible debenture financing for $21.8 million gross, using $11.1 million to retire existing higher-interest senior unsecured convertibles. The result: the vast majority of convertible maturities pushed to 2031, at a lower rate, with the remainder earmarked for M&A.

Separately, the company paid down $10.0 million of term loan principal, bringing year-to-date repayments to $15.5 million.

Cash ended at $42.0 million. That's thin against Green Thumb's $283.6 million — but TerrAscend isn't trying to fund a Virginia build. It refinanced its way out of a 2027-ish maturity wall and retired debt with operating cash. Boring, correct, and increasingly rare.

The uplisting play

Three moves point the same direction. A Special Meeting of Shareholders on August 24 to vote on a share consolidation — a prerequisite for a major US exchange listing. A new CFO, Eric Jackson, with two decades across retail, consumer and manufacturing. And CEO Ziad Ghanem appointed to the Board subsequent to quarter-end.

Wild framed the balance sheet work as preparation for uplisting as regulatory momentum builds. Every operator is saying a version of this — Verano did a 1-for-5 reverse split, Vireo is rolling up, SNDL is restructuring Parallel. The difference is that TerrAscend arrives with clean cash flow rather than a story.

The share count is the obstacle: roughly 383 million basic shares outstanding, comprising 309 million common, 11 million preferred as-converted and 63 million exchangeable, plus 23 million warrants at a $4.18 weighted average strike. Hence the consolidation vote. Note also that during the first half the company repurchased 578,500 shares at a weighted average of $0.67 — against warrants struck at $4.18. That spread tells you everything about where this stock has been.

Retail is performing

The operating detail is better than the revenue growth suggests.

In New Jersey, all three Apothecarium stores rank in the state's top 25, two improving sequentially. In Maryland, Cumberland and Salisbury rank top 10, and TerrAscend improved to the number 4 position at 6.0% market share, helped by the Tyson 2.0 launch plus growth in vapes, prerolls and edibles. In Pennsylvania, five of six Apothecarium stores rank top 15.

And the company signed an option to acquire Aunt Mary's in Flemington, New Jersey — a dispensary generating over $10.0 million in annualized revenue, expected to be immediately accretive on both EBITDA and free cash flow. That would be TerrAscend's fifth New Jersey location.

Buying a single high-performing store with a clear accretion case, funded partly from a refinancing, is a rather different capital allocation philosophy than $48.3 million of buybacks or $208 million of stock-funded roll-up.

The read

TerrAscend is the smallest operator reporting this cycle and the one making the fewest mistakes. Margins up, EBITDA up 11%, sixteen straight quarters of operating cash flow, maturities pushed to 2031, and a disciplined tuck-in acquisition.

The GAAP loss widened and G&A is creeping. But in a week where the large caps grew revenue while destroying operating income, the company that grew 3.3% and expanded margin looks considerably smarter than it did on Monday.

📈 Dog Walkers

$CRLBF ( ▲ 9.57% ) Bounce Back Quarter

Cresco Labs (CSE: CL) (OTCQX: CRLBF) posted Q2 revenue of $173 million, up 15% sequentially, with adjusted EBITDA of $40 million — a 20% sequential gain — at a 22.8% margin. Net income was $15 million. In a week defined by operators growing revenue while destroying operating income, that combination stands out.

Margins held up too. Gross profit of $87 million, with adjusted gross margin at 51.6% — better than Curaleaf's 50%, Verano's 46% and Green Thumb's 45%.

SG&A is where the asterisk lives. Reported $63 million, or 36.5% of revenue, versus adjusted SG&A of $55 million, or 32.0%. The $8 million gap is attributed to one-time costs tied to M&A, uplisting preparedness and federal reform. Fair enough — but every operator in the sector is spending on uplisting right now, and at some point recurring preparation stops being non-recurring.

The operational detail is the strongest part. In Pennsylvania, Cresco completed its first full quarter running nine acquired dispensaries and lifted their gross profit dollars 11% before rebranding a single store. In Ohio, new Sunnyside locations rank among the state's highest-performing openings. Kentucky shipped first branded product in June.

Then the awkward line: CFO Sharon Schuler is stepping down, with SVP and Corporate Controller Mark Stortz serving as interim while a search runs. Losing your CFO mid-uplisting-preparation is not ideal timing, however amicably framed.

The balance sheet explains the urgency: $67 million of cash against a $311 million senior secured term loan and a $19 million mortgage, with 506.8 million shares fully converted.

Charlie Bachtell says Cresco is ready. The operations agree. The cap table and the vacant CFO chair are the harder part.

$LEEEF ( ▼ 7.12% ) Hitting Its Stride

LEEF Brands (CSE: LEEF) (OTCQB: LEEEF) posted Q2 net revenue of $7.3 million, down 16% from $8.7 million. Normally that's the headline. Here it's the least interesting number in the release.

Gross profit rose 62% to $2.4 million, with gross margin nearly doubling to 33% from 17% — achieved on lower volumes, during a temporary biomass gap between the 2025 and 2026 Salisbury Canyon Ranch harvests. Net loss narrowed to $1.3 million from $2.9 million; adjusted EBITDA improved to $(0.6) million from $(1.3) million.

CFO Kevin Wilson supplied the number that matters: 33% margin came without the company's own ranch biomass, against roughly 50% in the preceding three quarters when ranch material was running. The vertical integration thesis has a control group now.

Post-quarter, LEEF completed the largest harvest in its history — nearly one million plants — with first distillate testing at approximately 95% THC and 99% total cannabinoids and clearing California's CAT 4 pesticide screens. Sales begin in August.

The footprint is compounding fast. Fourteen acres added this spring bring the ranch to 80 acres, with 21 more this fall plus a contracted 21 acres from a farming partner — a total internal and contracted footprint near 122 acres, up 88% year-over-year, and enough to carry through the 2027 harvest without another gap. The full 180-acre permit, the largest in Santa Barbara County, remains the 2027 target, with capital already spent.

Elsewhere: Himalaya contributed $1.0 million in its first partial quarter, a $5.2 million raise will fund a dedicated drying and curing facility, and LEEF filed DEA registration applications across California and Nevada with Blank Rome's Shane Pennington guiding.

$5.0 million cash, up from $2.2 million, and an $8.7 million working capital surplus — enough to hold the harvest rather than dump it into depressed pricing.

That last part is the whole strategy.

📺 Trade To Black

Top Cannabis Executive Weighs In on Industry's Future | TTB Powered by Flowhub

• Curaleaf beat on revenue and missed on earnings. Boris Jordan joins Shadd Dales to break down Q2: net revenue of $340.1 million (up 10%), gross profit of $169.9 million at a 50% margin, but net income of $12.5 million — $0.05 per share against a $0.17 consensus. Domestic grew 7%, international 26%.

• The market focused on the outlook, not the print. Shares fell 7.36% as investors weighed cautious guidance and cost pressures over the headline growth.

• Boris on what comes next. His read on M&A heading into Q4, whether any of the sector's top five could merge, and what he expects from rescheduling — including IRS tax guidance and how Uncertain Tax Positions ultimately get resolved.

• The lender's view of earnings season. Adam Stettner, CEO of FundCanna, joins special guest host Seth Yakatan to dig into the sector-wide trend: wholesale revenue, same-store sales, and shelf capacity — and what it signals for the back half of 2026.