# EDGAR Filing Document

**Accession Number:** 0001778129
**File Stem:** 0001193125-26-104092
**Filing Date:** 2026-3
**Character Count:** 747991
**Document Hash:** e0579990ff53d43fadaa95ee9f63d9a2
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-26-104092.hdr.sgml**: 20260312

**ACCESSION NUMBER**: 0001193125-26-104092

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 140

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260312

**DATE AS OF CHANGE**: 20260312

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** TerrAscend Corp.
- **CENTRAL INDEX KEY:** 0001778129
- **STANDARD INDUSTRIAL CLASSIFICATION:** AGRICULTURE PRODUCTION - CROPS [0100]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 000000000
- **STATE OF INCORPORATION:** A6
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-56363
- **FILM NUMBER:** 26747608

**BUSINESS ADDRESS:**
- **STREET 1:** 3610 MAVIS ROAD
- **CITY:** MISSISSAUGA
- **STATE:** A6
- **ZIP:** L5B 4A7
- **BUSINESS PHONE:** 855 837-7295

**MAIL ADDRESS:**
- **STREET 1:** 3610 MAVIS ROAD
- **CITY:** MISSISSAUGA
- **STATE:** A6
- **ZIP:** L5B 4A7

?xml version='1.0' encoding='ASCII'? 10-K

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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

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**FORM** 10-K

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**(Mark One)** 

☒ **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**For the fiscal year ended** December 31**,** 2025

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO** 

**Commission File Number** 000-56363

TERRASCEND CORP.

**(Exact name of Registrant as specified in its Charter)**

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| | |
|:---|:---|
| Ontario | N/A |
| **(State or other jurisdiction of**<br>**incorporation or organization)** | **(I.R.S. Employer**<br>**Identification No.)** |
| 77 City Centre Drive<br>Suite 501 - East Tower<br>Mississauga**,** Ontario**,** Canada | L5B 1M5 |
| **(Address of principal executive offices)** | **(Zip Code)** |

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**Registrant's telephone number, including area code: (**844**)** 628-3100

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**Securities registered pursuant to Section 12(b) of the Act:**

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| None | N/A | N/A |

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**Securities registered pursuant to Section 12(g) of the Act:**

Common Shares

**(Title of class)**

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

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| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| Emerging growth company | ☒ |  |  |

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If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the Registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the Registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting common equity (on an as-converted basis, based on the closing price of these shares on the Toronto Stock Exchange (the "TSX")) on June 30, 2025, the last business day of the Registrant's most recently completed second fiscal quarter, held by non-affiliates of the Registrant was $54,896,668.

The number of shares of Registrant's Common Shares (as defined below) outstanding as of March 11, 2026 was 308,532,518.

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**DOCUMENTS INCORPORATED BY REFERENCE**

Portions of the Registrant's definitive Proxy Statement (the "Proxy Statement") relating to the 2026 Annual Meeting of Shareholders are incorporated by reference into Part III of this Annual Report on Form 10-K (this "Annual Report") where indicated. The Proxy Statement will be filed with the United States Securities and Exchange Commission (the "SEC") within 120 days of the Registrant's fiscal year ended December 31, 2025.

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**Table of Contents**

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| | | |
|:---|:---|:---|
|  |  | **Page** |
| **<u>PART I</u>** |  | 5 |
| &nbsp;&nbsp;&nbsp;Item 1. | [<u>Business</u>](#item_1_business) | 5 |
| &nbsp;&nbsp;&nbsp;Item 1A. | [<u>Risk Factors</u>](#item_1a_risk_factors) | 19 |
| &nbsp;&nbsp;&nbsp;Item 1B. | [<u>Unresolved Staff Comments</u>](#item1b_unresolved_staff_comments) | 42 |
| &nbsp;&nbsp;&nbsp;Item 1C. | [<u>Cybersecurity</u>](#item_1c_cybersecurity) | 43 |
| &nbsp;&nbsp;&nbsp;Item 2. | [<u>Properties</u>](#item_2_properties) | 44 |
| &nbsp;&nbsp;&nbsp;Item 3. | [<u>Legal Proceedings</u>](#item_3_legal_proceedings) | 46 |
| &nbsp;&nbsp;&nbsp;Item 4. | [<u>Mine Safety Disclosures</u>](#item_4_mine_safety_disclosures) | 46 |
| **<u>PART II</u>** |  | 47 |
| &nbsp;&nbsp;&nbsp;Item 5. | [<u>Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities</u>](#item_5_market_registrants) | 47 |
| &nbsp;&nbsp;&nbsp;Item 6. | [<u>\[Reserved\]</u>](#item_6_reserved) | 49 |
| &nbsp;&nbsp;&nbsp;Item 7. | [<u>Management's Discussion and Analysis of Financial Condition and Results of Operations</u>](#item_7_managements_discussion_analysis_f) | 50 |
| &nbsp;&nbsp;&nbsp;Item 7A. | [<u>Quantitative and Qualitative Disclosures About Market Risk</u>](#item_7a_quantitative_qualitative_disclos) | 67 |
| &nbsp;&nbsp;&nbsp;Item 8. | [<u>Financial Statements and Supplementary Data</u>](#item_8_financial_statements) | 68 |
| &nbsp;&nbsp;&nbsp;Item 9. | [<u>Changes in and Disagreements With Accountants on Accounting and Financial Disclosure</u>](#item_9_disagreements) | 68 |
| &nbsp;&nbsp;&nbsp;Item 9A. | [<u>Controls and Procedures</u>](#item_9a_controls_procedures) | 68 |
| &nbsp;&nbsp;&nbsp;Item 9B. | [<u>Other Information</u>](#item_9b_other_info) | 69 |
| &nbsp;&nbsp;&nbsp;Item 9C. | [<u>Disclosure Regarding Foreign Jurisdictions that Prevent Inspections</u>](#item_9c_foreign_jurisdictions) | 69 |
| **<u>PART III</u>** |  | 70 |
| &nbsp;&nbsp;&nbsp;Item 10. | [<u>Directors, Executive Officers and Corporate Governance</u>](#item_10_directors_officers) | 70 |
| &nbsp;&nbsp;&nbsp;Item 11. | [<u>Executive Compensation</u>](#item_11_executive_compensation) | 70 |
| &nbsp;&nbsp;&nbsp;Item 12. | [<u>Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters</u>](#item_12_security_ownership) | 70 |
| &nbsp;&nbsp;&nbsp;Item 13. | [<u>Certain Relationships and Related Transactions, and Director Independence</u>](#item_13_relationships) | 70 |
| &nbsp;&nbsp;&nbsp;Item 14. | [<u>Principal Accounting Fees and Services</u>](#item_14_fees_services) | 70 |
| **<u>PART IV</u>** |  | 71 |
| &nbsp;&nbsp;&nbsp;Item 15. | [<u>Exhibits, Financial Statement Schedules</u>](#item_15_exhibits) | 71 |
| &nbsp;&nbsp;&nbsp;Item 16. | [<u>Form 10-K Summary</u>](#item_16_form_10k_summary) | 77 |
|  | [<u>Signatures</u>](#signatures) | 78 |
|  | [<u>Index to the Consolidated Financial Statements</u>](#index_to_consolidated_financial_statemen) | F-1 |

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**Cautionary Note Regarding Forward-Looking Statements**

This Annual Report contains statements that TerrAscend Corp. (the "Issuer") believes are, or may be considered to be, "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical fact included in this Annual Report regarding the prospects of the industry in which the Issuer, its subsidiaries, including TerrAscend Growth Corp. ("TerrAscend") and its subsidiaries (collectively, the "Company") operate or the Company's prospects, plans, financial position or business strategy may constitute forward-looking statements. Such statements can be identified by the use of forward-looking terminology such as "can", "expect", "likely", "may", "will", "should", "intend", "anticipate", "potential", "proposed", "estimate" and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions "may" or "will" happen, or by discussions of strategy. Forward-looking statements include estimates, plans, expectations, opinions, forecasts, projections, targets, guidance, or other statements that are not statements of fact. Forward-looking statements in this Annual Report include, but are not limited to, statements with respect to:

• the projected performance of the Company's business and operations;

• the Company's estimates and expectations regarding revenues, expenses and need for substantial additional financing, and its ability to obtain additional financing;

• the Internal Revenue Service's (the "IRS") review of the Company's tax positions, including heightened risk of added scrutiny or increased frequency or depth of reviews or audits by the IRS;

• the Company's strategic alliance or acquisition interests, including, as applicable, required regulatory approvals and licensing, anticipated costs and timing, expected impact thereof, and the ability to enter into future strategic alliances or acquisitions;

• the Company's ability to source investment opportunities and complete future acquisitions, including in respect of entities in the United States, the ability to finance such acquisitions or operations in the United States, and the expected impact thereof, including potential issuances of common shares in the capital of the Company ("Common Shares");

• the Company's ability to market itself to the capital markets, including its ability to raise equity as a result of its corporate ownership structure;

• the expected growth in the number of customers and patients using the Company's adult-use and medical cannabis, respectively;

• the expected growth in cultivation and production capacities of the Company;

• expectations with respect to future production costs;

• the expected impact of taxation on the Company's profitability and the uncertainty around timing of any legislative changes that may result in unfavorable tax treatment;

• the expected methods to be used by the Company to distribute cannabis;

• the expected growth in the number of the Company's dispensaries and changes to the jurisdictions in which the Company operates;

• the competitive conditions of the industry in which the Company operates;

• the impact of the Company's exit from the Michigan market on its operations and financial results;

• federal, state, provincial, territorial, local and foreign government laws, rules and regulations, including federal and state laws in the United States relating to cannabis operations in the United States;

• the potential legalization of the regulated use of cannabis for medical and/or adult-use in the United States and the related timing and impact thereof;

• laws and regulations and any amendments thereto applicable to the business and the impact thereof;

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• the possibility of actions by individuals, or United States federal government enforcement actions, against the Company and the potential impact of such actions on the Company;

• the competitive advantages and business strategies of the Company;

• the grant, renewal and impact of any license or supplemental license to conduct activities with or without cannabis or any amendments thereof;

• the medical benefits, viability, safety, efficacy, dosing and social acceptance of cannabis;

• the Company's future product offerings;

• the Company's ability to source and operate facilities in the United States;

• the Company's ability to integrate and operate the assets it acquires or may acquire in the future;

• the Company's ability to protect its intellectual property;

• the possibility that the Company's products may be subject to product recalls and returns;

• expectations regarding the Company's liquidity;

• expectations regarding the Company's Share Repurchase Program (as defined below); and

• other risks and uncertainties, including those listed under the section titled "*Risk Factors*" in this Annual Report

Certain of the forward-looking statements contained herein concerning the cannabis industry and the general expectations of the Company concerning the cannabis industry are based on estimates prepared by the Company using data from publicly-available governmental sources as well as from market research and industry analysis and on assumptions based on data and knowledge of the cannabis industry. Such data is inherently imprecise. The cannabis industry involves risks and uncertainties that are subject to change based on various factors, which are described below.

With respect to the forward-looking statements contained in this Annual Report, the Company has made assumptions regarding, among other things: (i) its ability to generate cash flows from operations and obtain necessary financing on acceptable terms; (ii) general economic, financial market, regulatory and political conditions in jurisdictions in which the Company operates; (iii) the output from the Company's operations; (iv) consumer interest in the Company's products; (v) competition in the cannabis industry; (vi) anticipated and unanticipated costs; (vii) government regulation of the Company's activities and products; (viii) government regulation of licensing, taxation and environmental protection; (ix) the timely receipt of any required regulatory approvals; (x) the Company's ability to obtain qualified staff, equipment and services in a timely and cost-efficient manner; (xi) the Company's ability to conduct operations in a safe, efficient and effective manner; and (xii) the Company's construction plans and timeframe for completion of such plans.

Readers are cautioned that the above list of cautionary statements is not exhaustive. Known and unknown risks, many of which are beyond the control of the Company, could cause actual results to differ materially from the forward-looking statements in this Annual Report. Such risks and uncertainties include, but are not limited to, current and future market conditions; risks related to federal, state, provincial, territorial, local and foreign government laws, rules and regulations, including federal and state laws in the United States relating to cannabis operations in the United States; and those discussed under Item 1A – "*Risk Factors*" in this Annual Report and in the "*Risk Factor Summary*" below. The purpose of forward-looking statements is to provide the reader with a description of management's expectations, and such forward-looking statements may not be appropriate for any other purpose. You should not place undue reliance on forward-looking statements contained in this Annual Report. The Company can give no assurance that such expectations will prove to have been correct. Forward-looking statements contained herein are made as of the date of this Annual Report and are based on the beliefs, estimates, expectations and opinions of management on the date such forward-looking statements are made. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, estimates or opinions, future events or results or otherwise or to explain any material difference between subsequent actual events and such forward-looking statements, except as required by applicable law.

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**Risk Factor Summary**

Investing in the Common Shares involves risks. You should carefully consider the risks described in Item 1A – "*Risk Factors*" beginning on page 19 of this Annual Report before deciding to invest in the Common Shares. If any of these risks actually occur, the Company's business, financial condition and results of operations could likely be materially adversely affected. In such case, the trading price of the Common Shares may decline, and you may lose all or part of your investment. Set forth below is a summary of some of the principal risks that the Company faces:

• As a cannabis business, the Company may be subject to unfavorable tax treatment and risks under U.S. federal income tax law.

• The Company may be at a higher risk of an IRS audit.

• Cannabis remains illegal under U.S. federal law, and enforcement of cannabis laws could change. The Company may be subject to action by the U.S. federal government due to its involvement with cannabis in the United States.

• The Company's business is subject to applicable anti-money laundering laws and regulations, and therefore, the Company has restricted access to capital markets, banking and other financial services.

• The Company's business relies heavily on its ability to obtain and maintain required licenses and permits.

• Compliance with regulations regarding cannabis is difficult, because the regulation of cannabis is uncertain and frequently changes, particularly during the early phases of the cannabis industry being introduced into a particular market. The Company may fail to comply with applicable laws regarding cannabis.

• There is a substantial risk of regulatory or political change with respect to cannabis.

• The Company may encounter increasingly strict environmental health and safety regulations in connection with its operations, which may harm the Company's business.

• The Company's products may be subject to product recalls or returns.

• The Company faces an inherent risk of product liability claims and other consumer protection claims as a manufacturer, processor and producer of products that are meant to be ingested by people.

• Because the Company's contracts involve cannabis and cannabis-related activities, which are not legal under U.S. federal law, the Company may face difficulties in enforcing its contracts.

• Failure to comply with medical practice laws and regulations may adversely impact the Company's operations or result in the imposition of monetary fines or the commencement of legal proceedings.

• The Company has historically had continued losses.

• The Company's indebtedness may adversely affect its business, results of operations and financial condition. The Company's failure to comply with applicable covenants could trigger events that may materially adversely affect the Company's business, results of operations and financial condition.

• The Company may not be able to secure additional debt or equity financing on favorable terms or at all.

• An adverse change in market conditions, including a sustained decline in the price of the Common Shares, negative changes to the Company's position in the market, or lack of growth in demand for its products and services could be considered to be an impairment triggering event. Such changes could impact valuation assumptions relating to the recoverability of assets and have resulted in, and may in the future result in, impairment charges to the Company's goodwill or long-lived asset balances, which would negatively impact the Company's operating results and harm its business.

• The Company is dependent on suppliers and key inputs for the cultivation, extraction and production of cannabis products.

• The Company's business is subject to the risks inherent in agricultural operations.

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• The Company's intellectual property may be difficult to protect, and failure to do so may negatively impact its business.

• The Company's profitability may be impacted by declining wholesale or retail cannabis prices in certain markets and shifting market conditions.

• The Company may face unfavorable publicity or consumer perception of the safety, efficacy and quality of its cannabis products.

• The Company faces reputational risks.

• The Company is dependent on consumer acceptance of and public demand for its products.

• The Company (and the third parties with whom it works) faces physical security risks, as well as risks related to its information technology systems data, potential cyber or phishing -attacks, and security incidents.

• The Company's inability to attract and retain key personnel, or its inability to maintain relations with its employees, unions and other employee representatives, could materially adversely affect its business.

• The Company (and the third parties with whom it works) is subject to stringent and evolving U.S. and foreign laws, regulations, rules, contractual obligations, policies and other obligations related to data privacy and security.

• The development of the Company's products is complex and requires significant investment.

• Consolidation in the cannabis industry and other changes to the competitive environment can impact the Company's margins and profitability.

• The cannabis industry and market are relatively new, and this industry and market may not continue to exist or grow as expected.

• The success of the Companyʼs business depends, in part, on its ability to successfully integrate recently acquired businesses and to retain key employees of acquired businesses.

• There can be no assurance that the Company's current and future strategic alliances will have a beneficial impact on the Company's business, financial condition and results of operations.

• The Company's voting control is concentrated.

• Additional issuances of the Company's securities may result in dilution.

• The price of the Common Shares may be volatile.

• "Cannabis related business" rules or policies may restrict certain financial institutions from holding the Company's securities, which may make its securities less liquid.

• The Company's management will continue to have broad discretion over the use of the proceeds the Company receives in connection with its public offerings, private placements, warrant exercises and loans, as applicable, and may not apply the proceeds in ways that increase the value of the shareholders' investment.

• The preferred shares in the capital of the Company ("Preferred Shares") have a liquidation preference over the Common Shares, which could limit the Company's ability to make distributions to the holders of Common Shares in certain circumstances.

• "Penny stock" rules may make buying or selling the Company's securities difficult.

• The Company may be subject to litigation, which could divert the attention of management and cause the Company to expend significant resources.

• The Company is currently an "emerging growth company" within the meaning of the Securities Act.

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**PART I**

**ITEM 1. BUSINESS**

**Overview**

The Company is a leading North American cannabis company. The Company has vertically-integrated licensed operations in Pennsylvania, New Jersey, Maryland and California. In addition, the Company has retail operations in Ohio and Ontario, Canada with a majority-owned dispensary in Toronto, Ontario, Canada. Notwithstanding the fact that various states in the United States have implemented medical cannabis laws or have otherwise legalized the use of cannabis, the use of cannabis remains illegal under U.S. federal law for any purpose, by way of the Controlled Substances Act of 1970 (the "Controlled Substances Act").

The Company operates under one reportable segment, which is the cultivation, production and sale of cannabis products.

The Company owns a portfolio of operating businesses, including:

• TerrAscend New Jersey ("TerrAscend NJ"), a majority-owned operation with four dispensaries, and a cultivation/processing facility;

• TerrAscend Maryland ("TerrAscend MD"), a wholly-owned operation with four dispensaries, and a cultivation/processing facility;

• TerrAscend Pennsylvania ("TerrAscend PA"), a wholly-owned operation with six dispensaries, and a cultivation/processing facility;

• TerrAscend California ("TerrAscend CA"), a wholly-owned operation with four dispensaries, and a cultivation facility;

• TerrAscend Ohio ("TerrAscend OH"), a cannabis retailer in New Philadelphia, Ohio with one wholly-owned dispensary; and;

• TerrAscend Canada ("TerrAscend Canada"), a cannabis retailer in Ontario, Canada with a majority-owned dispensary in Toronto, Ontario, Canada ("Cookies Canada").

The Issuer's head office and registered office is located at 77 City Centre Drive, Suite 501 - East Tower, Mississauga, Ontario, L5B 1M5, Canada.

The Company's telephone number is +1 (844) 628-3100 and its website is <u>www.terrascend.com</u>. Information contained on or accessible through the Company's website is not part of this Annual Report, and the inclusion of the Company's website address in this Annual Report is an inactive textual reference only.

**Operating Businesses and Brands**

The Company is committed to safely cultivating the highest quality cannabis products in order to elevate the lives of its patients and customers with a vision to keep growing and using the transformative power of cannabis to positively impact as many lives as possible. See the section titled "*Acquisitions*" for more information regarding the Company's acquisitions.

The Company operates four cultivation and processing facilities and twenty operational dispensaries serving thousands of medical patients and adult-use consumers across North America. The Company offers six premium brands in a variety of product types including flower, vaporizables, concentrates, topicals, tinctures, and edibles. The Company also produces and sells an assorted product offering from two premium licensed brands, Wana, and Cookies.

The Company's in-house product brand portfolio has the following brand values:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Kind Tree Cannabis: Rich earth, clean water and pure air come together to make Kind Tree Cannabis a unique and memorable cannabis experience. Its master cultivators are dedicated to producing exceptional cannabis with respect for the earth and love for the plant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Legend: Life is complicated, your flower should not be. Legend offers good strains, grown right, at a great price. Its mission is to enhance the everyday by curating products that are both sessionable and affordable – because when the everyday is fun, it is also legendary.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Valhalla Confections ("Valhalla"): Handmade, small batch, high quality. Valhalla's mission is to improve the quality of life for its customers by providing unique cannabis products, all made using mindful attention to detail, creativity, and innovation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•State Flower Cannabis: Evolved from a boutique approach to cultivation, yet it remains dedicated to an ultra-premium level of quality for its flowers and pre-rolls.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Ilera Healthcare: Rooted in science, its products start with premium flower. Ilera Healthcare has spent years perfecting the art of marijuana extraction and blending to create consistent experiences and customized effects, offering a product line of vapes, tinctures, and topicals.

The Company produces and sells products under third-party licensed brands in some markets, which consist of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Wana: An edibles brand for which the Company is Wana's sole manufacturer, supplier, and commercialization partner in Maryland, and produces Wana's proprietary recipes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Cookies: A globally recognized cannabis company. The Company cultivates, manufactures, and supplies Cookies' world-class proprietary strains and products throughout Maryland and New Jersey, offering a product line of flower, concentrates, cartridges, and vapes.

The Company's dispensary retail stores are branded as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Apothecarium: Known for emphasizing education and customer service. The Apothecarium provides guests with in-depth, one-on-one consultations from highly trained cannabis consultants. Its guests may order their cannabis at The Apothecarium dispensaries or online for pickup or delivery.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•In addition, TerrAscend owns and operates other dispensary brands that will transition into The Apothecarium brand.

***TerrAscend New Jersey***

The Company is a vertically integrated cultivator, processor and dispenser in New Jersey. The Company, through its majority-owned subsidiary TerrAscend NJ, LLC, cultivates and processes medical and adult-use cannabis, and currently operates three Apothecarium-branded dispensaries in Phillipsburg, Lodi, and Maplewood, New Jersey. The Company operates one additional dispensary in Lambertville, New Jersey. The Company operates a 16-acre site in Boonton Township, Morris County that has a cultivation and processing facility with a total footprint of approximately 140,000 square feet with the ability to further expand on the site. In addition to cultivation, the Company is engaged in the manufacturing of a wide range of branded form factors including vaporizables, concentrates, topicals, tinctures and edibles.

The Company is the exclusive manufacturer, supplier, and commercialization partner of Cookies in New Jersey, producing these branded products for wholesale and retail distribution in the state.

***TerrAscend Maryland***

The Company is a vertically integrated cultivator, processor and dispenser in Maryland. The Company, through its wholly-owned subsidiaries WDB Holding MD, Inc. and TER Holding MD, Inc., holds one cultivation license, one processor license, and four retail licenses. The Company has a cultivation and processing operation, including a state-of-the-art 150,000 square foot facility located in Hagerstown, Maryland. The Company is engaged in the extraction, processing and manufacturing of a wide-range of branded form factors including vaporizables, concentrates, topicals, tinctures and edibles. In addition, the Company operates four Apothecarium-branded retail dispensaries, in Cumberland, Salisbury, Nottingham, and Burtonsville.

The Company is the exclusive manufacturer, supplier, and commercialization partner of Wana and Cookies in Maryland, producing these branded products for wholesale and retail distribution in the state.

***TerrAscend Pennsylvania***

The Company is a vertically integrated cultivator, processor and dispenser in Pennsylvania. The Company, through its wholly-owned subsidiary WDB Holding PA, Inc., holds a cultivation, a processor, and six retail licenses in Pennsylvania. The Company, through Ilera Healthcare LLC ("Ilera"), has a 150,000 square foot grower and processor operation located in Waterfall, Pennsylvania. The Company distributes its product lines, including vaporizables, tinctures, and topicals broadly across dispensaries throughout Pennsylvania. In addition, the Company operates six Apothecarium-branded retail dispensaries, in Plymouth Meeting, Lancaster, Thorndale, Bethlehem, Allentown and Stroudsburg. In addition to cultivation, the Company

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is engaged in the manufacturing of a wide range of branded form factors including vaporizables, concentrates, topicals, and tinctures.

The Company is the exclusive manufacturer, supplier, and commercialization partner of Cookies in Pennsylvania, producing these branded products for wholesale and retail distribution in the state.

***TerrAscend California***

The Company is a vertically-integrated cultivator and dispenser in California. The Company, through its wholly-owned subsidiary WDB Holding CA, Inc. holds licenses for cultivation, distribution, and retail operations. The Company has a cultivation operation located in San Francisco, California. The Company operates four Apothecarium-branded retail dispensaries, including three in San Francisco, and one in Berkeley.

***TerrAscend Ohio***

The Company, through its wholly-owned subsidiary WDB Holding OH, Inc. ("WDB OH") holds a license for retail operations to sell cannabis at its dispensary in New Philadelphia, Ohio.

***TerrAscend Canada***

TerrAscend Canada sells cannabis in Ontario, Canada from its Cookies Canada retail dispensary. TerrAscend Canada's principal business activities include the retail sale of recreational ("recreational" or "adult-use") cannabis to consumers.

**Reorganization**

***Entry into the U.S. Cannabis Market and Capital Reorganization***

The Company was incorporated under the Business Corporations Act (Ontario) on March 7, 2017. At the time, the Company had limited operations in the United States and did not engage in the business of, or derive any revenue from, the cultivation, distribution or possession of cannabis in the United States. On October 9, 2018, the Company announced its intention to pursue growth opportunities in the U.S. cannabis market, including potential acquisitions of operators in states that had legalized cannabis for medical or adult-use. In connection therewith, the Company began exploring potential acquisition targets with significant market share and strong brand recognition. To support this strategy, the Company entered into an arrangement agreement (the "Arrangement Agreement") with Canopy Growth Corporation, RIV Capital Inc. (formerly Canopy Rivers Inc.), and entities controlled by Jason Wild, chairman of the Company (JW Opportunities Master Fund, Ltd., JW Partners, LP, and Pharmaceutical Opportunities Fund, LP) to reorganize the capital of the Company (the "Reorganization") and obtain waivers of certain contractual covenants that, at the time, restricted the Company from operating in the United States. The Reorganization was implemented by way of a statutory plan of arrangement on the terms set out in the Arrangement Agreement and was subject to court approval, the approval of the Company's shareholders, and other customary conditions. The Reorganization was completed on November 30, 2018.

***TSX Listing and Capital Reorganization*** 

On June 21, 2023, the Company received conditional approval from the TSX to list the Company's Common Shares on the TSX (the "TSX Listing"). On June 22, 2023, the shareholders of the Company approved the reorganization of its corporate structure in order to complete the TSX Listing, as further described in the Company's Management Information Circular and Proxy Statement dated May 1, 2023. In connection with the TSX Listing, the Common Shares were voluntarily delisted from the Canadian Securities Exchange (the "CSE") on June 30, 2023. On July 4, 2023, the Common Shares commenced trading on the TSX under the ticker symbol "TSND". In connection with this, effective July 6, 2023, the Issuer changed its trading symbol on the OTCQX to "TSNDF."

**Acquisitions and Divestitures**

For a summary of recent acquisition and divestiture transactions impacting continuing operations, see Note 5, "Acquisitions" and Note 7, "Discontinued Operations", respectively, in the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

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**Principal Products**

The Company offers a competitive product portfolio, ranging from flower, concentrates, vaporizables, edibles, tinctures, topicals, and/or accessories, in the jurisdictions in which it operates. The Company strives to develop and introduce innovative products to serve patients' and customers' unique needs.

**Principal Markets**

The Company currently has operations in the United States, through TerrAscend, and in Canada, through TerrAscend Canada. In the United States, TerrAscend sells cannabis products in Pennsylvania, New Jersey, Maryland, Ohio and California. In Canada, TerrAscend Canada operates its Cookies Canada retail business.

**Distribution Methods**

In the United States, TerrAscend distributes in-house product brands, third-party licensed products, and other branded products across dispensaries in Pennsylvania, New Jersey, Maryland, California, and Ohio. In Canada, the Company sells third-party licensed products and other branded products to consumers in Ontario through TerrAscend Canada.

**Sources and Availability of Materials**

The Company either grows or procures the primary component of its finished products, namely cannabis. TerrAscend's cultivation operations in the United States are dependent on a number of key inputs and their related costs including raw materials and supplies related to its growing operations, as well as electricity, water and other utilities.

The Company's indoor facilities operate year round with approximately 6.5 harvests per year on an average 8-week growing cycle to mitigate seasonality concerns and the associated costs to operate the facilities. With respect to the extent of the Company's own production supporting its retail and wholesale operations, approximately 50% of the products sold in the Company's own retail stores are sourced from its own cultivation and manufacturing operations.

**Seasonality**

While the Company does not consider its business to be broadly cyclical or seasonal in nature, there are certain recurring patterns that have been observed in consumer behavior and purchasing activity that contribute to periodic fluctuations in sales. Such patterns generally include an increase in retail sales during the fourth quarter of the calendar year primarily due to heightened holiday-related demand, which typically coincides with increased promotional activity and higher consumer traffic. In contrast, the first quarter of the calendar year generally experiences reduced foot traffic and softer sales as consumer spending tends to slow down following the holiday season.

**Specialized Knowledge and Skills**

The Company's business requires specialized skills and knowledge. The Company believes its team has developed and sourced business systems to effectively and efficiently operate its wholesale operations and retail cannabis operations in the jurisdictions in which it operates in the United States and Canada. The Company believes that the brand building, retail marketing and product development knowledge and skills that the Company's management team and employees possess are essential to the Company becoming a respected household name within the retail cannabis industry. Please see Item 1A – "*Risk Factors*" – "*Risks Related to the Company's Business, Operations and Industry*" – *"The Company's inability to attract and retain key personnel, or its inability to maintain relations with its employees, unions and other employee representatives, could materially adversely affect its business*."

**Competitive Conditions**

The Company currently faces, and will continue to face, competition from new and existing licensed cannabis operators, competitors with existing retail operations, government owned retailers, the illicit market, and other applicable participants in the cannabis wholesale and manufacturing industry. Some of the Company's competitors may have greater financial resources, market access, and manufacturing and marketing experience than the Company. Due to challenging market conditions in certain jurisdictions, some operators have exited the industry and in doing so have heavily discounted their products, creating pressure on pricing.

Increased competition from numerous independent cannabis retail outlets, wholesalers and larger and better-financed competitors (including new entrants), and heavily discounted products by exiting players could have a material adverse effect on the Company. In the United States, as each state continues to oversee all regulations and policies within its individual

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borders, each state has the power to change its guidelines, laws, and regulatory operations at any time. This includes, but is not limited to, expanding into adult-use consumption, limiting the number of dispensaries an operator can own and run in a jurisdiction, or regulating partnerships with social equity licenses.

The Company's competitors can be grouped into the following categories:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Vertically-Integrated Competitors: This class of competitors (which may include licensed producers of cannabis that are able to produce cannabis and sell cannabis products at retail stores of their affiliates) includes well-financed competitors with an established operating history in North America.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Existing Retail Competitors: This class of competitors includes early-stage and semi-developed retail cannabis businesses, as well as established retail cannabis businesses, which may be well capitalized, and which may also have an established and longer retail operating history in North America.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Government Competitors: This class of competitors includes government wholesalers that sell directly to consumers in the Province of Ontario.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Illicit Market Competitors: This class of competitors includes individuals and businesses operating in the illicit market within various jurisdictions across North America. These competitors may divert sizeable commercial opportunities from the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Existing Wholesale Competitors: This class of competitors includes early-stage and semi-developed wholesalers, as well as established wholesalers, which may be well capitalized, and which may also have an established and longer operating history in North America.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)Exiting Competitors: This class of competitors may be vertically integrated or may only operate at the retail or wholesale levels, and due to financial distress, are exiting the cannabis market. These competitors may heavily discount their products during the process of winding down their operations.

**Cannabis Industry Lifecycle**

The cannabis industry in any given market generally progresses through identifiable phases as that market

evolves. New markets often begin with a medical-only program, characterized by a smaller patient base, limited product

availability, and higher per-unit pricing relative to adult-use programs. Following legalization, markets transition into an

adult-use launch phase in which sales volumes increase significantly as demand broadens, though this phase is also

marked by distribution inefficiencies and competitive volatility. As supply expands and additional competitors enter a

market, that market typically experiences a price compression phase where margins are pressured due to downward

pricing trends. Over time, the Company's experience has been that markets stabilize in a mature phase, with sustainable pricing, consistent consumer demand, and more efficient operating structures.

**Protection of Intellectual Property**

The Company believes that the ownership and protection of the Company's intellectual property rights is a significant aspect of the Company's future opportunity. Currently, the Company relies on trade secrets, technical know-how and proprietary information for its commercial strategy. The Company protects its intellectual property by seeking and obtaining registered protection where possible, developing and implementing standard operating procedures to protect trade secrets, technical know-how and proprietary information, and entering into restrictive agreements with parties that have access to the Company's inventions, trade secrets, technical know-how and proprietary information, such as the Company's partners, collaborators, employees and consultants, to protect confidentiality and intellectual property rights. The Company also seeks to preserve the integrity and confidentiality of its inventions, trade secrets, trademarks, technical know-how and proprietary information by maintaining strict operating procedures, physical security of the Company's premises and physical and electronic security of its information technology systems.

In addition, the Company has sought and will continue to seek trademark protection in the United States and Canada. The Company's ability to obtain registered trademark protection for cannabis-related goods and services, in particular for cannabis itself, is limited in the United States, where registered federal trademark protection is currently unavailable for trademarks covering cannabis-related products and services that are illegal under the Controlled Substances Act. Accordingly, the Company's ability to obtain intellectual property rights or enforce intellectual property rights against third party uses of similar trademarks may be limited in the United States. The U.S. Patent and Trademark Office released a policy on May 2, 2019, which clarifies that applications for trademarks for products that meet the definition of hemp could be accepted for registration, subject to certain exceptions.

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**Privacy and Cybersecurity** 

In the ordinary course of business, the Company processes personal or sensitive data. Accordingly, the Company is subject to numerous data privacy and security obligations, including federal, state, local, and foreign laws, regulations, guidance, and industry standards related to data privacy, security, and protection. Such obligations include, without limitation, the Federal Trade Commission Act, the Telephone Consumer Protection Act of 1991 ("TCPA"), the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, the California Consumer Privacy Act of 2018 (as amended by the California Privacy Rights Act) (together, "CCPA/CPRA"), the Canadian Personal Information Protection and Electronic Documents Act, Canada's Anti-Spam Legislation, and the Payment Card Industry Data Security Standard ("PCI-DSS"). Additionally, the Company is subject to various consumer protection laws which requires the Company to publish statements that accurately and fairly describe how the Company handles personal data and choices individuals may have about the way their personal data is handled.

The regulatory landscape around privacy and cybersecurity is evolving rapidly and becoming increasingly stringent, which may increase our compliance obligations and exposure for any noncompliance. Please see Item 1A – "Risk Factors" – "Risks Related to the Company's Business, Operations and Industry" – "*The Company (and the third parties with whom it works) is subject to stringent and evolving U.S. and foreign laws, regulations, rules, contractual obligations, policies and other obligations related to data privacy and security. Its actual or perceived failure (or that of the third parties with whom it works) to comply with such obligations could lead to regulatory investigations or actions; litigation; fines and penalties; disruptions of business operations; reputational harm; loss of revenue or profits; and other adverse business consequences*" for additional information about the laws and regulations to which the Company is subject and about the risks to our business associated with such laws and regulations.

**Human Capital**

As of December 31, 2025, the Company employed 1,038 employees, of which approximately 828 were engaged on a full-time basis. Of these employees, 86 were subject to a collective bargaining agreement. The Company believes that it has a good relationship with its employees.

The Company believes in building a diverse team, and it strives to foster a welcoming culture where employees can make an impact on the Company's success. The Company encourages talented people from all backgrounds to join the Company and is dedicated to promoting inclusion by encouraging its employees to participate in employee resource groups and other similar initiatives.

The Company is committed to providing a safe and secure work environment in accordance with applicable labor, safety, health, anti-discrimination and other workplace laws. The Company strives for all employees to feel safe and empowered at work. To that end, the Company maintains a hotline that employees can call, with the option of remaining anonymous, to voice concerns.

**Licenses and Regulatory Framework in United States**

***Summary of U.S. Cannabis Regulatory Regime***

The cannabis industry is subject to various state and local laws, regulations and guidelines relating to the cultivation, manufacture, distribution, sale, storage and disposal of medical and adult-use cannabis, as well as laws and regulations relating to health and safety, the conduct of operations and the protection of the environment. The U.S. regulatory scheme varies in its terminology and definitions, using "cannabis", "marijuana," "marihuana," and "hemp" as distinct terms. The regulatory environment governing the medical and adult-use cannabis industries in the United States, where state law permits such activities, are, and will continue to be, subject to evolving regulation by governmental authorities. Accordingly, there are a number of risks associated with investing in businesses in an evolving regulatory environment, including, without limitation, increased number of permits or licenses being issued and increased regulatory burden on operators.

The U.S. federal government classifies cannabis as a Schedule I controlled substance under the Controlled Substances Act. Cannabis and/or cannabis products having more than 0.3% concentration of delta-9 tetrahydrocannabinol ("THC"), is marijuana under the CSA. Conversely, cannabis with a THC concentration of less than 0.3% is classified as hemp. On November 12, 2025, the "FY2026 Agriculture Appropriations Act (part of H.R. 5371)", which redefines "hemp", was signed into law and made certain material changes as to what constitutes hemp verse marijuana under the CSA. Under the new law, hemp is defined as Cannabis sativa L. and its derivatives with a total THC concentration (including THCA) of not more than 0.3% total THC on a dry weight basis, and any final hemp-derived cannabinoid products containing more than 0.4 milligrams of total THC per

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container will be considered marijuana under the CSA. Cannabinoids synthesized or manufactured outside the plant (such as lab-converted Delta-8) is explicitly excluded from the definition of hemp. The new restrictions would take effect on November 12, 2026; however, subsequent bills have been filed in the U.S. Congress ("Congress") seeking to delay the implementation.

There are 40 states plus the District of Columbia, the Commonwealth of the Northern Mariana Islands, Puerto Rico, United States, U.S. Virgin Islands and Guam that have legalized medical cannabis and approximately 24 states plus the District of Columbia, Guam, the Commonwealth of the Northern Marina Islands and the U.S. Virgin Islands that have legalized adult-use cannabis. Notwithstanding the permissive regulatory environment of medical, and in some cases adult-use cannabis at the state level, and the EO as further described above, cannabis remains a Schedule I drug under the Controlled Substances Act, making it illegal under U.S. federal law to cultivate, manufacture, distribute, sell or possess cannabis in the United States. Furthermore, financial transactions involving proceeds generated by, or intended to promote, cannabis-related business activities in the United States may form the basis for prosecution under applicable federal anti-money laundering legislation.

The U.S. federal government's approach to enforcement of cannabis laws has trended toward deferring to state laws where a robust state regulatory framework exists. On August 29, 2013, the U.S. Department of Justice (the "DOJ") issued a memorandum known as the "Cole Memorandum" to all U.S. Attorneys' offices. The Cole Memorandum generally directed U.S. Attorneys not to prioritize the enforcement of federal cannabis laws against individuals and businesses that comply with state medical cannabis programs. The Cole Memorandum, while not legally binding and only a policy statement, assisted in managing the tension between state and federal laws concerning all medical and adult-use state-regulated cannabis businesses.

On January 4, 2018, the Cole Memorandum was rescinded by former U.S. Attorney General Jeff Sessions. While this did not create a change in federal law, the revocation added to the uncertainty of U.S. federal enforcement of the Controlled Substances Act in states where cannabis use is regulated. Former U.S. Attorney General Sessions also issued a one-page memorandum known as the "Sessions Memorandum" which confirmed the rescission of the Cole Memorandum and explained that the Cole Memorandum was "unnecessary" due to existing general enforcement guidance as set forth in the U.S. Attorney's Manual. The Sessions Memorandum did not otherwise indicate that the prosecution of cannabis-related offenses is a heightened DOJ priority. Furthermore, the Sessions Memorandum explicitly describes itself as a guide to prosecutorial discretion. Such prosecutorial discretion remains in the hands of U.S. Attorneys when deciding whether or not to prosecute cannabis-related offenses.

On November 7, 2018, U.S. Attorney General Sessions resigned as U.S. Attorney General. On February 14, 2019, William Barr was confirmed by the U.S. Senate (the "Senate") as the next U.S. Attorney General. During one of his Senate confirmation hearings, Mr. Barr stated that he did not support cannabis legalization but would not prosecute cannabis businesses that comply with state laws. Mr. Barr stated further that he would not upset settled expectations that have arisen as a result of the Cole Memorandum.

On March 11, 2021, Merrick Garland was appointed U.S. Attorney General and indicated he would generally act in accordance with the Cole Memorandum, when, at his confirmation hearing, he said, "It does not seem to me a useful use of limited resources that we have, to be pursuing prosecutions in states that have legalized and that are regulating the use of cannabis, either medically or otherwise." U.S. Attorney General. Mr. Garland has not, however, reissued the Cole Memorandum or issued substitute guidance.

On October 6, 2022, then-President Joseph Biden requested that the Secretary of the U.S. Department of Health and Human Services ("HHS") and the U.S. Attorney General initiate a review as to how cannabis is currently scheduled under federal law. In December 2022, then-President Biden signed the Medical Marijuana and Cannabidiol Research Expansion Act into law, which allows for significantly broader opportunities to study cannabis. On August 29, 2023, following a review by the U.S. Food and Drug Administration ("FDA"), the Secretary of HHS issued a recommendation to the Drug Enforcement Administration ("DEA") that cannabis be moved from Schedule I to Schedule III under the Controlled Substances Act. In December 2023, the DEA confirmed that it is in the process of conducting its review of HHS's recommendation. On May 21, 2024, the DOJ proposed to transfer cannabis from Schedule I to Schedule III under the Controlled Substances Act, consistent with the recommendation issued by HHS. The Controlled Substances Act requires that such proposed rule changes be made through formal rulemaking on the record after an opportunity for a hearing. In November 2024, it was announced that formal hearing proceedings regarding the proposed rescheduling would begin in December 2024. Subsequently, it was announced that a formal hearing on the merits would begin in January 2025. However, on January 13, 2025, the hearing was canceled and the proceedings were stayed indefinitely pending an interlocutory appeal brought by two private movants who sought to remove the DEA from its role as proponent of the proposed rescheduling through a motion which was denied. On December 18, 2025, President Trump signed an executive order (EO) entitled "Increasing Medical Marijuana and Cannabidiol Research," which directs the Attorney General, Pam Bondi, to expedite the movement of marijuana from Schedule I to Schedule III under the CSA. The order does not legalize marijuana for recreational use, and it remains a federally controlled substance. The order is not self-executing and requires a formal administrative rulemaking process.

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Despite the rescission of the Cole Memorandum, as an industry best practice, the Company abides by the following policies to ensure compliance with the guidance included therein:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company's operations comply with all licensing requirements as required by the state, county, municipality, or other administrative divisions and the Company continuously monitors its operations to ensure compliance of such operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company has implemented compliant policies and procedures to prevent the distribution of cannabis products to minors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company has implemented an inventory tracking system and other compliant procedures to track inventory and prevent the diversion of cannabis products in compliance with each jurisdiction's requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company's operations adhere to the scope of the regulations governing the cannabis license in the market in which the Company operates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company has implemented compliant policies and procedures to prevent the distribution of the proceeds from its operations to criminal enterprises, cartels, or gangs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company has implemented compliant quality controls to ensure all products comply with applicable regulations and contain the necessary disclaimers and warnings associated with the contents of the products to avoid adverse public health consequences; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company has implemented compliant policies and procedures to effectively monitor its state-authorized operations so that it is not used as a cover or pretense for the trafficking of illegal drugs or engaging in other illegal activity.

For the reasons set forth herein, the Company's existing investments in the United States, and any future investments, may become the subject of heightened scrutiny by regulators, stock exchanges and other authorities in the United States or Canada. As a result, the Company may be subject to significant direct and indirect interaction with public officials. There can be no assurance that this heightened scrutiny will not lead to the imposition of certain restrictions on the Company's ability to invest in the United States or any other jurisdiction. Government policy changes or public opinion may also result in a significant influence over the regulation of the cannabis industry in the United States or elsewhere. Among other things, such a shift could cause state and local jurisdictions to abandon initiatives or proposals to legalize medical or adult-use cannabis, thereby limiting the number of new state jurisdictions into which the Company could expand. Any inability to fully implement the Company's expansion strategy may have a material adverse effect on the Company's business, financial condition and results of operations.

Additionally, under U.S. federal law, it may be a violation for financial institutions to take any proceeds from the sale of cannabis or any other Schedule I controlled substance. Banks and other financial institutions, particularly those that are federally chartered in the United States, could be prosecuted and possibly convicted of money laundering for providing services to cannabis businesses. It may also be a violation of federal money laundering statutes for "federal health care law violations," which include violations of the Federal Food, Drug, and Cosmetic Act.

Violations of any U.S. federal laws and regulations could result in significant fines, penalties, administrative sanctions, convictions or settlements arising from civil proceedings conducted by either the federal government or private citizens, or criminal charges, including, but not limited to, disgorgement of profits, cessation of business activities, civil forfeiture or divestiture. This could have a material adverse effect on the Company, including its reputation and ability to conduct business, its cannabis licenses in the United States, the listing of its securities on various stock exchanges, its financial position, operating results, profitability or liquidity, or the market price of its publicly traded shares. In addition, it is difficult for the Company to estimate the time or resources that would be needed for the investigation of any such matters or its final resolution because, in part, the time and resources that may be needed are dependent on the nature and extent of any information requested by the applicable authorities involved, and such time or resources could be substantial. For the reasons set forth above, the Company's investments and operations in the United States may become the subject of heightened scrutiny by regulators, stock exchanges and other authorities in Canada.

The Company may also be subject to a variety of laws and regulations domestically and in the United States that relate to money laundering, financial recordkeeping and proceeds of crime, including the Currency and Foreign Transactions Reporting Act of 1970 (commonly known as the "Bank Secrecy Act"), as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), as amended and the rules and regulations thereunder, the

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Criminal Code (Canada), and any other related or similar rules, regulations or guidelines, issued, administered or enforced by governmental authorities in the United States and Canada.

In February 2014, the Financial Crimes Enforcement Network of the Treasury Department issued a memorandum (the "FinCEN Memorandum") providing instructions to banks seeking to provide services to cannabis-related businesses. The FinCEN Memorandum clarifies how financial institutions can provide services to cannabis-related businesses consistent with their Bank Secrecy Act obligations. It refers to supplementary guidance that Deputy Attorney General Cole issued to federal prosecutors relating to the prosecution of money laundering offenses predicated on cannabis-related violations of the Controlled Substances Act and independently lists the federal government's enforcement priorities as related to cannabis. Although the original FinCEN Memorandum is still in place, the supplementary DOJ guidance that accompanied the FinCEN Memorandum was rescinded when former U.S. Attorney General Sessions rescinded the Cole Memorandum. It is unclear whether the current administration will follow the guidelines of the FinCEN Memorandum, although immediately after the Sessions Memorandum, then-U.S. Treasury Secretary Steven Mnuchin stated that the Treasury Department had no intention to rescind the FinCEN Memorandum but, instead, wanted to improve the availability of banking services in the state-regulated cannabis space. The FinCEN Memorandum currently remains in effect under Treasury Secretary Scott Bessent.

H.R. 1595, or the Secure and Fair Enforcement Banking Act of 2019 ("SAFE Banking Act"), which would expand financial services in the United States to cannabis-related legitimate businesses and service providers, was introduced in the U.S. House of Representatives (the "House") on March 7, 2019 with bipartisan support. The SAFE Banking Act has passed the House six times but has yet to pass the Senate. A new version of the SAFE Banking Act known as the Secure and Fair Enforcement Regulation ("SAFER Banking Act") was introduced in the Senate on September 21, 2023, and subsequently approved by the Senate Committee on Banking. The SAFER Banking Act passed the Senate Banking Committee and is now pending passage in the U.S. Senate and, if passed, will move on to the House where it faces an uncertain future.

Other legislation that has been introduced in the United States that would make cannabis transactions easier and more predictable, include the Marijuana Opportunity Reinvestment and Expungement Act (the "MORE Act") and the Cannabis Administration and Opportunities Act (the "CAOA"). The MORE Act was first introduced in July 2019 by Representative Jerrold Nadler in the House, and in the Senate by then-U.S. Senator Kamala Harris. If it were to become law, the MORE Act would remove cannabis as a Schedule I controlled substance under the Controlled Substances Act and make available U.S. Small Business Administration funding for regulated cannabis operators. The MORE Act was reintroduced in the current Congress by Representative Nadler on May 28, 2021, and again on August 29, 2025, with no corresponding bill introduced in the Senate. The CAOA was released as a discussion draft by U.S. Senate Majority Leader Chuck Schumer, U.S. Senator Ron Wyden, and U.S. Senator Cory Booker in July 2022 and reintroduced on May 1, 2024. The CAOA is currently with the Senate Finance Committee, but it has not received a floor vote. If it were to become law, it would, among other things, remove cannabis from the definition of a controlled substance under the Controlled Substances Act, allow states to set their own regulations for cannabis, and block states from prohibiting interstate commerce of regulated cannabis across their borders. The States Reform Act, introduced by Representative Nancy Mace in 2021, which would have repealed the federal prohibition of cannabis did not pass into law. The STATES 2.0 Act (Marijuana Legalization - H.R. 2934) was re-introduced on April 17, 2025, by Rep. Dave Joyce (R-OH) and a bipartisan group of cosponsors. This bill aims to amend the Controlled Substances Act to prevent the federal government from interfering with states that have legalized marijuana. It explicitly keeps federal prohibition in place for states that choose to maintain it, while allowing for the transportation of marijuana in interstate commerce. The bill has been referred to the House Subcommittee on Energy and Commerce, in addition to the Judiciary, Transportation, and Infrastructure committees.

Despite the rescission of the Cole Memorandum, Congress has passed appropriations bills in each fiscal year since 2015, that prevents the federal government from using congressionally appropriated funds to enforce federal cannabis laws against regulated medical cannabis actors operating in compliance with state and local law. The continuing resolution contains, among other things, a rider known as Rohrabacher-Blumenauer Amendment (the "RBA"), which prevents the federal government from using congressionally appropriated funds to enforce federal cannabis laws against regulated medical cannabis actors operating in compliance with state medical laws. However, this measure does not protect adult-use cannabis businesses. The U.S. Ninth Circuit in *United States v. McIntosh* held that the prohibition under the RBA also prevents the DOJ from spending federal funds to prosecute individuals who are engaged in conduct that is permitted by, and in compliance with, state medical cannabis laws.

<u>State-Level Overview</u>

The following section presents an overview of market and regulatory conditions for the cannabis industry in the United States that the Company has or is intending to have an operating presence in, and is presented as of the date of filing, unless otherwise indicated.

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*New Jersey*

On January 18, 2010, the Compassionate Use Medical Marijuana Act (the "CUMMA") came into force allowing patients with a limited number of qualifying medical conditions to access the state's medical marijuana program. The New Jersey Department of Health (the "NJDOH") issued regulations shortly thereafter authorizing the NJDOH to accept applications for a minimum of six alternative treatment centers (the "ATCs"), with two each to operate in the northern, central and southern regions of New Jersey.

The CUMMA permits each ATC to operate as a cultivator, manufacturer, and dispensary under one permit. These activities can take place at up to two locations, as long as both locations are within the same region. The application process involves two stages. Those seeking an ATC permit must first submit an application seeking authority to apply for a permit to operate. Upon the granting of the application, the prospective ATC must then complete the application for actual permitting. Applications for authority to apply for a permit may only be submitted following solicitation from the NJDOH for such applications. The first six permits for ATCs were awarded to nonprofit entities, with subsequent permits to be available to both nonprofit and for-profit entities.

Upon taking office on January 16, 2018, Governor Murphy expanded the medical program by issuing Executive Order No. 6, which ordered a 60-day review of all aspects of New Jersey's current program, "with a focus on ways to expand access to cannabis for medical purposes." In response to Executive Order No. 6, the NJDOH released its Executive Order 6 Report on March 23, 2018, which proposed significant changes to the existing medicinal program. In an effort to create greater patient access, the state immediately put into effect some of the recommended changes, including cutting registration and renewal fees, and expanding qualifying conditions.

On July 16, 2018, the Murphy Administration announced that the licensing application process would be opened for up to six additional vertically-integrated medicinal cannabis ATCs. The NJDOH released a Notice of Request for Applications outlining the reason for issuing the licenses, eligibility rules and information required for the applications. The application period opened on August 1, 2018 and closed on August 31, 2018. Winning applicants were supposed to be selected on or before November 1, 2018 but this deadline was subsequently pushed to December 2018 due to administrative constraints. On December 17, 2018, the NJDOH approved six additional medical cannabis ATCs to add to the program. Those six applicant ATCs were then required to undergo background checks, provide evidence of cultivation, manufacturing, and dispensary locations with municipal approval for each location, and comply with all regulations promulgated by the NJDOH, including safety and security requirements. <u>The NJDOH subsequently approved additional rule waivers that permitted all ATCs operating in New Jersey to operate up to three different dispensary locations.</u>

On July 2, 2019, The Jake Honig Compassionate Use Medical Cannabis Act, which overhauled the CUMMA, was signed into law. On November 3, 2020, New Jersey voters passed a ballot measure amending the New Jersey Constitution to permit the use of cannabis for adults over 21 years of age. The ballot measure allowed New Jersey to regulate the growth, distribution, and sale of adult-use cannabis.

On February 22, 2021, Governor Murphy signed the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act into law, legalizing the use of cannabis by adults 21 years of age and older in New Jersey. CREAMMA permitted the existing 12 ATCs to seek expedited entry into the adult-use marketplace, and also created a new regulatory body named the New Jersey Cannabis Regulatory Commission ("CRC"), as the successor regulator to the NJDOH. CREAMMA also set caps on the total number of licenses that may be concurrently held by adult-use operators, permitting one entity to hold a cultivation, manufacturing, and retail license, but no more than one of each (with an exception made for ATCs who were previously authorized under NJDOH to hold up to three dispensing permits). On August 19, 2021, the CRC published its first set of rules for adult-use cannabis in the state. These rules outline the details of licensing (including for ATCs entering into the adult-use marketplace), the authority of municipalities, the operations of cannabis businesses, and the CRC's authority over adult-use cannabis. Adult-use sales in New Jersey commenced on April 21, 2022.

On September 25, 2023, Governor Murphy signed legislation that permitted an amendment to the current license limitations imposed under CREAMMA. Specifically, it provided investor groups, defined as anyone, including those who already hold interests in other licensed entities, to make investments in up to seven diversely-owned retailers, defined under the law as those otherwise qualified as certified minority-owned, women-owned, or disabled-veteran owned businesses. This law permitted said investor groups to obtain up to a 35% equity ownership interest, as well as the provision of licensing, financial, and other technical assistance to these diversely-owned entities.

Both ATC and adult-use licenses expire annually and require the submittal of a renewal application 90 days prior to expiration. Provided the requisite renewal fees are paid, the renewal application is submitted in a timely manner, and there are no material violations noted against the permit/license, all such permits/licenses are renewed in the ordinary course.

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*Maryland*

The Maryland medical cannabis program was signed into law on May 2, 2013. In 2016, the Maryland Medical Cannabis Commission issued preliminary licenses to 102 dispensaries, 15 cultivators, and 15 processors; the first dispensaries opened to patients in December 2017.

Maryland has three classes of cannabis licenses: dispensaries, cultivators, and processors. Wholesaling occurs between cultivators and processors, cultivators and dispensaries, and processors and dispensaries. Originally, no one company could directly control multiple licenses of the same class, but this restriction was changed in May 2019, when Governor Hogan signed a bill that permitted a single company to own or control, including the power to manage or operate, up to four dispensaries. Dispensary locations are tied to the Senate District in which they were awarded, with the exception of applicants who were awarded dispensary and cultivation licenses. These dispensaries can be located at the discretion of the license holder. Permitted products include oil-based formulations, flower, and edibles.

In April 2018, the Maryland House and Senate approved a bill, which was later signed by Governor Hogan, that expanded the license pool, allowing for a maximum of seven additional cultivation licenses, for a total of 22, and 13 additional processing licenses, for a total of 28. In November 2022, the voters in Maryland approved adult-use cannabis as a ballot question. Beginning on July 1, 2023, adults 21 or older may possess and consume up to 1.5 ounces of cannabis flower, 12 grams of concentrated cannabis, or a total amount of cannabis products that does not exceed 750 mg THC. This amount is known as the "personal use amount." Adult-use sales began around the same time. Subsequently, in July 2023, the Maryland Cannabis Administration (the "MCA") was established to oversee both Maryland's medical and adult-use cannabis programs. As of July 1, 2023, all medical license holders that chose to convert their licenses and whose conversion applications were approved by the MCA became the holders of "hybrid" medical and adult-use licenses (i.e., each license issued by the MCA permits the cultivation, processing, and dispensing of both medical and adult-use cannabis).

On March 14, 2024 and June 28, 2024, the MCA conducted lotteries for its social equity licensing round. A total of 205 applicants were selected across the micro and standard grower, processor, and dispensary categories. These drawings collectively represent the maximum number of licenses the MCA was authorized to award for the first round under 36-404(d) of the Alcoholic Beverage and Cannabis Article.

Licenses in Maryland are renewed every five years. Before expiry, licensees are required to submit a renewal application. While renewals are granted every five years, there is no ultimate expiry after which no renewals are permitted. Provided the requisite renewal fees are paid, the renewal application is submitted in a timely manner, and there are no material violations noted against the applicable license, licensees anticipate license renewals in the ordinary course of business.

*Pennsylvania*

The Pennsylvania medical cannabis program was signed into law on April 17, 2016, under Act 16 and provided access to state residents with one or more of 17 qualifying conditions, including: epilepsy, chronic pain, and post-traumatic stress disorder. The state originally awarded only 12 licenses to cultivate/process and 27 licenses to operate retail dispensaries (which entitled holders to up to three medical dispensary locations per retail license).

On March 22, 2018, it was announced that the final phase of the Pennsylvania medical cannabis program would initiate its rollout, which included 13 additional cultivation/processing licenses and 23 additional dispensary licenses. Additionally, the list of qualifying conditions was expanded from 17 to 21. On July 20, 2019, two more qualifying medical conditions were added, bringing the total to 23. Subsequent updates to the medical marijuana program in 2021 saw expansion of the caregiver program and an increase in patient supply purchasing limits from 30 days to 90 days.

There are two principal license categories in Pennsylvania: (1) cultivation/processing and (2) dispensary. All cultivation/processing establishments and dispensaries must register with the Pennsylvania Department of Health (the "PDOH"). Registration certificates are valid for a period of one year and are subject to annual renewals after the required fees are paid and the business remains in good standing. The PDOH must renew a permit unless it determines that the applicant is unlikely to maintain effective control against diversion of medical cannabis and the applicant is unlikely to comply with all laws as prescribed under the Pennsylvania medical cannabis program.

Under applicable laws, the licenses permit the license holder to cultivate, manufacture, process, package, sell and purchase medical cannabis pursuant to the terms of the licenses, which are issued by the PDOH under the provisions of Pennsylvania's Medical Marijuana Act and regulations promulgated thereunder. The medical cultivation/processing licenses permit the licensee to acquire, possess, cultivate, manufacture/process into medical cannabis products and/or medical cannabis-infused products, deliver, transfer, have tested, transport, supply or sell cannabis and related supplies to medical cannabis dispensaries.

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The retail dispensary licenses permit the Company to purchase cannabis and cannabis products from cultivation/processing facilities, as well as allow the sale of cannabis and cannabis products.

License permits are valid for a period of one year and are subject to annual renewals after required fees are paid and the business remains in good standing. Provided that the requisite renewal fees are paid, the renewal application is submitted in a timely manner, and there are no material violations noted against the applicable license, licenses are typically renewed in the ordinary course.

*California*

In 1996, California voters passed Proposition 215, also known as the Compassionate Use Act, allowing physicians to recommend cannabis for an inclusive set of qualifying medical conditions. The law established a not-for-profit patient/caregiver system but there was no state licensing authority to oversee the businesses that emerged. In September of 2015, the California legislature passed three bills, collectively known as the Medical Marijuana Regulation and Safety Act. In 2016, California voters passed The Adult Use of Marijuana Act, which legalized recreational use cannabis for adults 21 years of age and older and created a licensing system for commercial cannabis businesses. On June 27, 2017, then-Governor Jerry Brown signed Senate Bill 94 into law, which combined California's medicinal and recreational use cannabis frameworks into one licensing structure under the Medicinal and Adult-Use of Cannabis Regulation and Safety Act ("MAUCRSA").

Pursuant to MAUCRSA: (i) CalCannabis, a division of the California Department of Food and Agriculture, was designated to issue licenses to cannabis cultivators: (ii) the Manufactured Cannabis Safety Branch (the "MCSB"), a division of the California Department of Public Health, was designated to issue licenses to cannabis manufacturers; and (iii) the California Department of Consumer Affairs, via its agency, the Bureau of Cannabis Control (the "BCC"), was designated to issue licenses to cannabis distributors, testing laboratories, retailers, and micro-businesses. These agencies were also charged with overseeing various aspects of implementing and maintaining California's cannabis landscape, including the statewide track and trace system. All three agencies released their initial emergency rulemakings at the end of 2017 and updated them with minor revisions in June 2018. The three agencies adopted their permanent rulemakings on January 16, 2019. All three agencies began issuing temporary licenses in January 2018 and stopped doing so on December 31, 2018, pursuant to MAUCRSA.

Local authorization is a prerequisite to obtaining a state license, and local governments are permitted to prohibit or otherwise regulate the types and number of cannabis businesses allowed in their locality. All three state regulatory agencies require confirmation from the applicable locality that the operator is operating in compliance with local requirements and was granted authorization to continue or commence commercial cannabis operations within the locality's jurisdiction. Applicants are required to comply with all local zoning and land use requirements and provide written authorization from the property owner where the commercial cannabis operations are proposed to take place, which must dictate that the applicant has the property owner's authorization to engage in the specific state-sanctioned commercial cannabis activities proposed to occur on the premises. The State has not set a limit on the number of state licenses an entity may hold, unlike other states that have restricted how many cannabis licenses an entity may hold in total or for various types of cannabis activity. Although vertical integration across multiple license types is allowed under MAUCRSA, testing laboratory licensees may not hold any other licenses aside from a laboratory license. There are also no residency requirements for ownership of a state license under MAUCRSA.

California state licenses, and some local licenses, are renewed annually. Each year, licensees are required to submit a state renewal application to the relevant regulatory authority, and all applicable local renewal applications to the applicable local regulatory body (for local licenses).

On July 12, 2021, Governor Gavin Newsom signed AB-141 into law, triggering the consolidation of CalCannabis, the MCSB, and the BCC into the newly created Department of Cannabis Control (the "DCC"). The DCC was created in an effort to centralize regulatory authority and facilitate a more easily navigable regulatory regime. All licenses obtained under the previous regulatory authorities automatically transferred to the DCC, which is now responsible for issuing and renewing all cannabis licenses. In September 2021 the DCC issued emergency regulations, which were approved and went into effect the same month. The emergency regulations, among other things, include revised definitions clarifying who are considered to be owners or holders of a financial stake in cannabis businesses, and provisions allowing for the sale of branded products between businesses.

California's robust regulatory system is designed to ensure, monitor, and enforce compliance with all aspects of a cannabis operator's licensed operations. California's state license application process additionally requires comprehensive criminal, regulatory, financial and personal disclosures, coupled with stringent monitoring and continuous reporting requirements designed to ensure only good actors are granted licenses and that licensees continue to operate in compliance with the state regulatory program. Applicants must submit standard operating procedures describing how the operator will, among other requirements, secure the facility, manage inventory, comply with the state's seed-to-sale tracking requirements, dispense cannabis, and handle waste, as applicable to the license sought. Once licensed, an operator must continue to abide by the

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processes described in its application and seek regulatory approval before any changes to such procedures can be made. Licensees are additionally required to train their employees on compliant operations and are only permitted to transact with other legal and licensed businesses.

As a condition of state licensure, operators must consent to random and unannounced inspections of their commercial cannabis facility as well as the facility's books and records, so as to monitor and enforce compliance with state law. Many localities have also enacted similar standards for inspections, and the state has already commenced site-visits and compliance inspections for operators who have received state temporary or annual licensure. To legally operate a medical or adult-use cannabis business in California, the operator must have both a state and local license. This requires license holders to operate in cities with marijuana licensing programs. Therefore, cities in California are allowed to determine the number of licenses they will issue to marijuana operators or can choose to outright ban marijuana.

*Ohio*

HB 523, effective on September 8, 2016, legalized medical marijuana in Ohio. The Ohio Medical Marijuana Control Program ("OMMCP") allows people with certain medical conditions, upon the recommendation of an Ohio-licensed physician certified by the State Medical Board, to purchase and use medical marijuana. HB 523 required that the framework for the OMMCP become effective as of September 2018. This timeframe allowed for a deliberate process to ensure the safety of the public and to promote access to a safe product.

The Division of Cannabis Control ("DCC Ohio") within the Department of Commerce oversees the OMMCP and Patient and Caregiver Registry, and licenses and regulates medical marijuana cultivators, processors, dispensaries, and testing laboratories. Prior to the DCC Ohio, the OMMCP was administered by both the Board of Pharmacy and the Department of Commerce. The State Medical Board of Ohio is responsible for certifying physicians to recommend medical marijuana and approving qualifying conditions.

Several forms of medical marijuana are legal in Ohio, including inhalation of marijuana through a vaporizer (not direct smoking), oils, tinctures, plant material, edibles, lotions, creams, patches, and any other forms approved by the State of Ohio.

On November 7, 2023, Ohio voters approved Issue 2, making Ohio the 24th state to legalize adult-use marijuana. The law took effect on December 7, 2023 and allows for additional forms of cannabis to be sold to consumers.

In June 2024, Ohio issued its first provisional licenses for adult-use cannabis under its dual-use framework, with applications opening earlier in the year. These provisional licenses were granted to businesses already participating in the state's medical marijuana program, enabling a quicker transition to adult-use sales once compliance requirements were met. On August 6, 2024, adult-use cannabis sales begin in Ohio.

All medical marijuana operators in Ohio seeking to sell adult-use marijuana were required to transition to a dual-use license. A dual-use license allows operators to sell both medical and adult-use marijuana. Upon obtaining a dual-use license, the original medical license becomes inactive, effectively replaced by the dual-use license.

On December 19, 2025, Ohio Governor Mike DeWine signed SB 56 into law, which amended and repealed certain provisions of Issue 2. Among other things, SB 56: imposes new THC percentage limits in both adult-use and medical cannabis concentrates; caps the total number of retail licenses permitted across the state; and repeals provisions protecting adult-use consumers from facing either workplace or professional disciplinary action, as well as other forms of discrimination based solely upon their private marijuana use.

**Regulatory Framework in Canada**

***Licenses and Regulatory Framework in Canada***

<u>The Cookies Canada License</u>

The Company operates the Cookies Canada retail dispensary in Ontario, Canada through a subsidiary of TerrAscend Canada, which holds a retail operator's license under the Cannabis License Act (Ontario). The retail operator's license permits TerrAscend Canada, subject to further requirements set out in the regulations, to possess and sell cannabis, including cannabis extracts, topicals, edibles, and oils, in accordance with the applicable legislation and regulations promulgated thereunder, subject to certain restrictions and conditions.

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***Summary of Canadian Regulatory Framework***

On October 17, 2018, the Cannabis Act and the regulations promulgate thereunder (the "Cannabis Regulations") came into force as law with the effect of legalizing adult-use cannabis and regulating the production, distribution and sale of cannabis and cannabis derived products (both medical and adult-use) within Canada. The Cannabis Act replaced the Controlled Drug and Substances Act (Canada) (the "CDSA"). Under the CDSA, the Access to Cannabis for Medical Purposes Regulations (the "ACMPR") set out a framework to provide individuals with access to cannabis for medical purposes and it was the governing legislation in respect of the production, sale and distribution of medical cannabis and related oil extracts in Canada. Although the ACMPR was repealed, the regulatory framework applicable to cannabis for medical purposes was substantially reproduced within the Cannabis Act with minimal changes.

The Cannabis Regulations provide a licensing and permitting scheme for activities related to cannabis, setting out the following classes of licenses that authorize activities in relation to cannabis: (i) a license for cultivation; (ii) a license for processing; (iii) a license for analytical testing; (iv) a license for sale for medical purposes; (v) a license for research; and (vi) a cannabis drug license. Each license contemplates permitting the sale of cannabis within the supply chain (i.e. to other appropriate license holders or those permitted under a provincial law) but does not include the ability to sell recreational cannabis to retail consumers which is regulated by the provinces. At the end of each term of their respective licenses, a license holder must submit an application for renewal to Health Canada containing information prescribed by the Cannabis Act.

The Cannabis Regulations, among other things, outline the rules for the legal cultivation, processing, research, testing, distribution, sale, importation and exportation of cannabis and hemp in Canada.

Pursuant to the Cannabis Act, but subject to provincial or territorial restrictions, adults who are over the age of 18 are legally able to: (i) possess up to 30 grams of legal cannabis, dried or equivalent in non-dried form in public; (ii) share up to 30 grams of legal cannabis, dried or equivalent in non-dried form with other adults; (iii) buy dried or fresh cannabis and cannabis oil from a provincially licensed retailer; (iv) grow, from licensed seed or seedlings, up to four cannabis plants per residence for personal use; and (v) make cannabis products, such as food and drinks, at home as long as dangerous organic solvents are not used to create concentrated products.

**Compliance**

TerrAscend believes it is in compliance with all applicable laws in the jurisdictions it operates including all state laws, the cannabis licensing framework of Maryland, Pennsylvania, New Jersey, California and Ohio, and all provincial laws and the regulations in Ontario, and at the time of license return at the request of the Company, TerrAscend Canada believed it was in compliance with all applicable federal, provincial and territorial laws and regulations, including the Cannabis Act and the Cannabis Regulations. There are no known current incidences of material non-compliance, citations or notices of violations outstanding which may have an impact on the Company's licenses, business activities or operations where it operates. Notwithstanding the foregoing, like all businesses, the Company may, from time to time, experience incidences of non-compliance with applicable rules and regulations in the jurisdictions in which the Company operates, and such non-compliance may have an impact on the Company's licenses, business activities or operations. However, the Company takes steps to minimize, disclose and remedy all incidences of non-compliance which may have an impact on the Company's licenses, business activities or operations in the jurisdictions in which the Company operates. Notwithstanding the fact that various states in the United States have implemented medical cannabis laws or have otherwise legalized the use of cannabis, the use of cannabis remains illegal under U.S. federal law for any purpose, by way of the Controlled Substances Act.

**Available Information**

The Company's website address is <u>www.terrascend.com</u>. Through this website, the Company's filings with the SEC, including its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to such reports, will be accessible (free of charge) as soon as reasonably practicable after materials are electronically filed with or furnished to the SEC, and copies thereof are electronically filed on the System for Electronic Data Analysis and Retrieval + in Canada. Information contained on or accessible through the Company's website is not a part of this Annual Report, and the inclusion of the Company's website address in this Annual Report is an inactive textual reference only.

The SEC maintains an internet site (<u>http://www.sec.gov</u>) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

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**ITEM 1A. RISK FACTORS**

*The following risks should be carefully considered when deciding whether to make an investment in the Company. Some of the following factors are interrelated and, consequently, investors and readers should treat such risk factors as a whole. These risks and uncertainties are not the only ones that could affect the Company, and additional risks and uncertainties not currently known to the Company, or that it currently considers not to be material, may also impair the business, financial condition and results of operations of the Company and/or the value of its securities. If any of the following risks or other risks occur, they could have a material adverse effect on the Company's business, financial condition and results of operations and/or the value of the Company's securities. There is no assurance that any risk management steps taken by the Company will avoid future loss due to the occurrence of the risks described below, or other unforeseen risks.*

*Unless otherwise noted, dollar amounts in this section are in thousands of U.S. dollars.*

**Regulatory and Legal Risks Related to the Company's Business and the Cannabis Industry**

***As a cannabis business, the Company may be subject to unfavorable tax treatment and risks under U.S. federal income tax law.***

Tax risk is the risk of changes in the tax environment that would have a material adverse effect on the Companyʼs business, results of operations, and financial condition. Currently, U.S. state licensed cannabis businesses are assessed at a comparatively high effective U.S. federal income tax rate due to Section 280E of the Internal Revenue Code of 1986, as amended (the "Code"), which prohibits businesses associated with trafficking in controlled substances (within the meaning of Schedule I and II of the Controlled Substances Act) from deducting certain expenses. The IRS has invoked Section 280E of the Code in tax audits against various cannabis businesses in the United States that are permitted under applicable U.S. state laws. Although the IRS issued a clarification allowing the deduction of certain expenses, the scope of such items is interpreted very narrowly, and the bulk of operating costs and general administrative costs are not permitted to be deducted. In addition, on June 28, 2024, the IRS published a press release reminding taxpayers that cannabis remains a Schedule I controlled substance until a final rule is published that reschedules cannabis and, therefore, cannabis is still subject to the limitations of Section 280E of the Code, and stating that taxpayers that have filed amended returns seeking a refund of taxes paid related to Section 280E of the Code are not entitled to a refund or payment and that the IRS is taking steps to address these claims. While there are currently several pending cases before various U.S. administrative and federal courts challenging these restrictions, there is no guarantee that these courts will issue an interpretation of Section 280E of the Code favorable to cannabis businesses. Given these facts, the impact of any such challenges cannot be reliably estimated; however, it may be significant to the financial condition and/or the overall operations of the Company.

The Company has taken the position that it does not owe taxes attributable to the application of Section 280E of the Code, including amending its U.S. federal income tax returns related to tax years 2021 and 2022 based on legal interpretations that challenge its tax liability under Section 280E of the Code. Because the Company's tax positions could be (and, as discussed below, has been) challenged by the IRS and other taxing authorities and the Company may not be wholly successful in defending its tax positions, the Company records reserves for unrecognized tax benefits based on its assessment of the probability of successfully sustaining its tax filing positions. Management exercises significant judgment when assessing the probability of successfully sustaining the Company's tax filing positions, and in determining whether a contingent tax liability should be recorded and, if so, estimating the amount. During the years ended December 31, 2024 and December 31, 2025, certain of the Company's amended and originally filed federal income tax returns were selected for routine examinations by the IRS, which is still in process.

On December 18, 2025, President Trump signed an executive order entitled "Increasing Medical Marijuana and Cannabidiol Research," which directs the Attorney General, Pam Bondi, to expedite the movement of marijuana from Schedule I to Schedule III under the Controlled Substances Act. The order does not legalize marijuana for recreational use, and it remains a federally controlled substance. The order is not self-executing and requires a formal administrative rulemaking process.

If cannabis is moved to Schedule III from Schedule I under the Controlled Substances Act, it could end the effect of Section 280E of the Code on some or all of the Company's operations. However, any such change from Schedule I to Schedule III is beyond the control of the Company and its timing, occurrence and potential impact cannot be predicted. In addition, legislation has been introduced in the U.S. Congress that would make Section 280E of the Code applicable to any trade or business involved in cannabis, even if cannabis is rescheduled to Schedule III under the Controlled Substances Act. It is not clear whether these bills have a high likelihood of passage.

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***The Company may be at a higher risk of an IRS audit.***

There may be a greater likelihood that the IRS will audit the tax returns of cannabis-related businesses and any such IRS audit may require significant management attention. Any such audit of the Company's tax returns could result in it being required to pay additional tax, interest and penalties, as well as incremental accounting and legal expenses, which could be material. During the years ended December 31, 2024, and December 31, 2025, certain of the Company's amended and originally filed federal income tax returns were selected for routine examinations by the IRS, which is still in process. In the normal course of business, the Company receives notices, from time to time, from various local, state, and federal tax agencies. If the IRS makes a determination that the Company is not in compliance with Section 280E of the Code, the Company may be required to pay any difference in the amounts owed, in addition to penalties and interest, which could equal or exceed the amounts reserved by the Company, exceed the amount of cash on hand and materially impact the Company's financial condition or results of operations.

***Cannabis remains illegal under U.S. federal law, and enforcement of cannabis laws could change. The Company may be subject to action by the U.S. federal government due to its involvement with cannabis in the United States.***

While some states in the United States. have legalized the use and sale of cannabis in some form, it remains illegal under U.S. federal law. On January 4, 2018, then-U.S. Attorney General Jeff Sessions issued a memorandum to U.S. Attorneys which rescinded previous guidance from the DOJ specific to cannabis enforcement in the United States, including the Cole Memorandum, which stated that the DOJ would not prioritize the prosecution of cannabis-related violations of U.S. federal law in jurisdictions that had enacted laws legalizing medical cannabis in some form and had implemented strong and effective regulatory and enforcement systems. With the Cole Memorandum rescinded, U.S. federal prosecutors have greater discretion in determining whether to prosecute medical cannabis-related violations of U.S. federal law, though there was never such a policy statement in relation to United States and its territories with adult-use cannabis programs. On December 18, 2025, President Trump signed an executive order (EO) entitled "Increasing Medical Marijuana and Cannabidiol Research," which directs the Attorney General to take necessary steps to complete the rulemaking process to move marijuana from Schedule I to Schedule III under the Controlled Substances Act (CSA). The order does not legalize marijuana for recreational use, and it remains a federally controlled substance. The order is not self-executing and requires a formal administrative rulemaking process. Because TerrAscend engages in cannabis-related activities in the United States, an increase in federal enforcement efforts with respect to current U.S. federal laws applicable to cannabis could cause financial damage to the Company. Further, the Company is at risk of being prosecuted under U.S. federal law and having its assets seized.

The Companyʼs exposure to U.S. cannabis related activities are as follows:

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| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | **(In thousands)** | **(In thousands)** |
| Current assets | $108160 | $175239 |
| Non-current assets | 446748 | 429905 |
| Current liabilities | 63435 | 87262 |
| Non-current liabilities | 378220 | 329777 |

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| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| Revenue, net | $259711 | $267036 | $249589 |
| Gross profit | 136273 | 135650 | 137721 |
| Income from operations | 52092 | 53991 | 47354 |
| Net loss attributable to controlling interest | (21548) | (18518) | (22093) |

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Violations of any U.S. federal laws and regulations could result in significant fines, penalties, administrative sanctions, convictions or settlements arising from civil proceedings conducted by either the U.S. federal government or private citizens, or criminal charges, including, but not limited to, disgorgement of profits, cessation of business activities, civil forfeiture or divestiture. Any property owned by participants in the cannabis industry that is either used in the course of conducting or comprises the proceeds of a cannabis business could be subject to seizure by law enforcement and subsequent civil asset forfeiture. Even if the owners of the property were never charged with a crime, the property in question could still be seized and subjected to an administrative proceeding by which, with minimal process, it could become subject to forfeiture. This could have a material adverse effect on the Company, including its reputation and ability to conduct business, the listing of its securities on various stock exchanges, its financial position, operating results, profitability or liquidity or the market price of its publicly traded shares. In addition, it is difficult for the Company to estimate the time or resources that would be needed for the investigation of any such matters or its final resolution because, in part, the time and resources that may be needed are

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dependent on the nature and extent of any information requested by the applicable authorities involved, and such time or resources could be substantial.

Unlike in Canada, which has federal legislation uniformly governing the cultivation, distribution, sale and possession of cannabis under the Cannabis Act, cannabis is largely regulated at the state level. Notwithstanding the permissive regulatory environment of cannabis at the state level, cannabis continues to be categorized as a controlled substance under the Controlled Substances Act and, as such, is in violation of federal law in the United States. Further, there can be no assurance that state laws legalizing and regulating the sale and use of cannabis will not be repealed or overturned, or that local governmental authorities will not limit the applicability of state laws within their respective jurisdictions. Additionally, local and city ordinances may strictly limit and/or restrict the retailing of cannabis in a manner that will make it extremely difficult or impossible to transact business in the cannabis industry.

As stated above, Congress has passed appropriations bills in each fiscal year since 2015, that prevents the federal government from using congressionally appropriated funds to enforce federal cannabis laws against regulated medical cannabis actors operating in compliance with state and local law. The continuing resolution contains, among other things, the RBA, which prevents the federal government from using congressionally appropriated funds to enforce federal cannabis laws against regulated medical cannabis actors operating in compliance with state medical cannabis laws. However, the appropriations protections only apply to medical cannabis operations and provide no protection against businesses operating in compliance with a state's adult-use cannabis laws.

The DOJ or a federal prosecutor could allege that the Company, or its board of directors (the "Board of Directors" or the "Board") and, potentially its shareholders, "aided and abetted" violations of federal law by providing finances and services to its operating subsidiaries. Under these circumstances, it is possible that a federal prosecutor would seek to seize the assets of the Company and to recover the "illicit profits" previously distributed to shareholders resulting from any of the foregoing financing or services. In these circumstances, the Company's operations could cease, shareholders of the Company may lose their entire investment and directors, officers and/or shareholders of the Company may be left to defend any criminal charges against them at their own expense and, if convicted, be sent to federal prison. Violations of any federal laws could result in significant fines, penalties, administrative sanctions, convictions or settlements arising from civil proceedings conducted by either the federal government or private citizens, or criminal charges, including, but not limited to, disgorgement of profits, cessation of business activities or divestiture. This could have a material adverse effect on the Company, including its reputation and ability to conduct business, its holding (directly or indirectly) of cannabis licenses in the United States, the listing of its securities on any securities exchanges, its financial position, operating results, profitability or liquidity or the market price of its listed securities. An investor's contribution to and involvement in the Company's activities may result in federal civil and/or criminal prosecution, including forfeiture of an entire investment.

***The Company's business is subject to applicable anti-money laundering laws and regulations and, therefore, the Company has restricted access to capital markets, banking and other financial services.***

Since the use of cannabis is currently illegal under U.S. federal law, and in light of considerations related to money laundering and other cannabis related criminality in the U.S. banking industry, U.S. banks have been reluctant to accept or deposit funds from businesses involved with the cannabis industry. Consequently, businesses involved in the cannabis industry often have difficulty finding banks willing to accept its business. Likewise, cannabis businesses have limited access, if any, to credit card processing services. As a result, cannabis businesses in the United States are largely cash-based. This complicates the implementation of financial controls and increases security issues. Furthermore, the Company maintains domestic cash deposits in Federal Deposit Insurance Corporation ("FDIC") insured banks that exceed the FDIC insurance limits. Bank failures, events involving limited liquidity, defaults, non-performance, or other adverse developments that affect financial institutions, or concerns or rumors about such events, may lead to liquidity constraints. There can be no assurance that the Company's deposits in excess of the FDIC or other comparable insurance limits will be backstopped by the United States government, or that any bank or financial institution with which the Company does business will be able to obtain needed liquidity from other banks, government institutions, or by acquisition in the event of a failure or liquidity crisis.

While the Company cannot obtain financing in the United States from traditional banks or other certain federally regulated entities, the Company has been able to access equity financing through private markets in both the United States and Canada. Commercial banks, private equity firms, and venture capital firms have approached the cannabis industry cautiously. While increasing numbers of high-net-worth individuals and family offices have made meaningful investments in companies and businesses similar to the Company, there is neither a broad nor deep pool of institutional capital available to cannabis license holders and applicants. There can be no assurance that additional financing, if raised privately, will be available to the Company when needed or on terms which are acceptable to the Company. The Companyʼs inability to raise financing or limitations on such financings to fund its operations, capital expenditures or acquisitions could limit its growth and may have a material adverse effect upon future profitability.

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Under U.S. federal law, financial transactions in the United States involving proceeds generated by cannabis-related conduct can form the basis for prosecution. The FinCEN division of the U.S. Department of Treasury has provided guidance for how financial institutions can provide services to the cannabis-related businesses consistent with the obligations under the Bank Secrecy Act.

Previously, the DOJ directed its federal prosecutors to consider the federal enforcement priorities enumerated in the Cole Memorandum when determining whether to charge institutions or individuals with any of the financial crimes described above based upon cannabis-related activity. In January 2018, the DOJ revoked the Cole Memorandum and related memorandum. While the impact remains unclear, the revocation has created uncertainty. For instance, federal prosecutors may increase enforcement activities against institutions or individuals who are engaged in financial transactions related to cannabis activities, or there may be a negative impact to the continuation of financial services in the United States with regard to cannabis-related activities.

The U.S. federal prohibitions on the sale of cannabis may result in the Company and its partners being restricted from accessing the U.S. banking system and they may be unable to deposit funds in federally insured and licensed banking institutions. Banking restrictions could be imposed due to the Companyʼs banking institutions not accepting payments and deposits. The Company is at risk that any bank accounts it has could be closed at any time and result in increased costs for the Company. The Companyʼs activities in the United States, and any proceeds thereof, may be considered proceeds of crime due to the fact that cannabis remains federally illegal in the United States. This may restrict the ability of the Company to repatriate funds back to Canada. Furthermore, while the Company has no current intention to declare or pay dividends on the Common Shares or make other distributions for the foreseeable future, the Company may decide or be required to suspend declaring or paying dividends or making other distributions without advance notice and for an indefinite period of time. The guidance provided in the FinCEN Memorandum as described above may change depending on the position of the U.S. government administration at any given time and is subject to revision or retraction in the future, which may restrict the Companyʼs access to banking services.

***The Company's business relies heavily on its ability to obtain and maintain required licenses and permits.***

The Companyʼs ability to cultivate, manufacture and sell medicinal and adult-use cannabis in certain U.S. states and in Canada is dependent on its ability to maintain licenses with applicable regulators for the cultivation, manufacture, and sale of cannabis. Failure to comply with the requirements of its licenses or any failure to maintain its licenses could have a material adverse impact on the business, financial condition and operating results of the Company.

The Company and its subsidiaries, as applicable, will apply for, as the need arises, all necessary licenses and permits for the activities it expects to conduct in the future. However, the ability of the Company or its subsidiaries to obtain, maintain or renew any such licenses and permits in a timely manner, on acceptable terms or at all is subject to changes in regulations and policies, and at the discretion of the applicable authorities or other governmental agencies in each jurisdictions.

In certain jurisdictions, the cannabis laws and regulations limit, not only the number of cannabis licenses issued, but also the type or number of cannabis licenses that a single company may own. As a result, the Company may be restricted from participating in certain cannabis businesses in specific markets as a result of ownership or control of other cannabis licenses, which may limit the Companyʼs ability to grow organically or increase its market share in such states. As an example, certain markets may limit the size of a company's cultivation space, limit the number of dispensaries a single-company may own, or may obligate a company to offer certain products, like medical cannabis, to consumers.

The Company faces further risk associated with restrictions on licenses as a result of the Company's inability to control public company shareholder ownership or conflicting interpretations of control or ownership of the Company by shareholders, and therefore the Company may inadvertently have certain restrictions placed on its ability to operate as a result of third-party ownership. Restrictions placed on the Company's ability to own specific licenses or assets in specific markets, or complexities arising from third-party ownership thresholds may materially adversely impact the Company's ability to compete in a specific market or may cause other regulatory delays in receiving regulatory approval for certain activities.

***Compliance with regulations regarding cannabis is difficult, because the regulation of cannabis is uncertain and frequently changes, particularly during the early phases of the cannabis industry being introduced into a particular market. The Company may fail to comply with applicable laws regarding cannabis.***

Achievement of the Companyʼs business objectives is contingent, in part, upon compliance with regulatory requirements enacted by governmental authorities and obtaining all regulatory approvals, where necessary, for the production and sale of its products. The Company cannot predict the impact of the compliance regime that the applicable regulatory bodies in the United States and Canada are implementing that may affect the business of the Company, particularly during the early phases of the cannabis industry being introduced into a particular market, and changes could require the Company to incur substantial costs

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associated with compliance or alter its business plan. Similarly, the Company cannot predict the time required to secure all appropriate regulatory approvals for its products, or the extent of testing and documentation that may be required by governmental authorities. The impact of governmental compliance regimes, any delays in obtaining, or failure to obtain regulatory approvals may significantly delay or impact the development of markets, products and sales initiatives and could have a material adverse effect on the business, results of operations and financial condition of the Company.

The Company will incur ongoing costs and obligations related to regulatory compliance. Failure to comply with regulations may result in additional costs for corrective measures, penalties or restrictions on the Companyʼs operations. In addition, changes in regulations, more vigorous enforcement thereof or other unanticipated events could require extensive changes to the Companyʼs operations, result in increased compliance costs or give rise to material liabilities, which could have a material adverse effect on the business, results of operations and financial condition of the Company.

The Company cannot predict its ability to secure all appropriate regulatory approvals for any of its products, or the extent of testing or related documentation that may be required by governmental authorities. Delays in obtaining, or failure to obtain, regulatory approvals may significantly delay or impact the development of markets, products and sales initiatives and could have adverse effect on the business, financial condition, and operating results of the Company. Without limiting the foregoing, the Companyʼs failure to comply with the requirements of any underlying licenses or any failure to maintain any underlying licenses would have a material adverse impact on its business, financial condition, and operating results. It is uncertain whether any required licenses for the operation of the Companyʼs business will be extended or renewed in a timely manner, if at all, or that if they are extended or renewed, the licenses will be extended or renewed on the same or similar terms.

Furthermore, Internet websites are visible by people everywhere, not just in jurisdictions where the activities described therein are considered legal. As a result, to the extent that the Company sells services or products via web-based links targeting only jurisdictions in which such sales or services are compliant with state law, the Company may face legal action in other jurisdictions which are not the intended object of any of the Company's marketing efforts for engaging in any web-based activity that results in sales into such jurisdictions deemed illegal under applicable laws.

The cannabis industry is subject to extensive controls and regulations, which may significantly affect the financial condition of the Company. The marketability of any product may be affected by numerous factors that are beyond the control of the Company, and which cannot be predicted, such as changes to government regulations, including those relating to taxes and other government levies which may be imposed. Certain requirements may prove to be excessively onerous or otherwise impractical for the Company to comply with. This may result in the exclusion of certain business opportunities from the list of possible transactions that the Company would otherwise consider. Changes in government levies, including taxes, could reduce the Companyʼs earnings and could make future capital investments or the Companyʼs operations uneconomic. The industry is also subject to numerous legal challenges, which may significantly affect the financial condition of market participants and which cannot be reliably predicted.

***The Company's failure to comply with TSX requirements could result in a delisting of the Common Shares.***

The Common Shares are currently listed on the TSX, and accordingly, so long as the Company chooses to continue to be listed on such stock exchange, it must comply with the TSX requirements or guidelines when conducting business, especially when pursuing opportunities in the United States. On October 16, 2017, the TSX provided clarity regarding the application of Sections 306 (Minimum Listing Requirements) and 325 (Management) and Part VII (Halting of Trading, Suspension and Delisting of Securities) of the TSX Company Manual (collectively, the "TSX Requirement**s**") to TSX-listed issuers with business activities in the cannabis sector. In TSX Staff Notice 2017-0009, the TSX noted that issuers with ongoing business activities that violate U.S. federal law regarding cannabis are not in compliance with the TSX Requirements. The TSX reminded issuers that, among other things, if the TSX finds that a listed issuer is engaging in activities contrary to the TSX Requirements, the TSX has the discretion to initiate a delisting review. Although the Company believes that it currently complies with the TSX Requirements, the Company's interpretation may differ from the TSX and failure to comply with the TSX Requirements could result in a delisting of the Common Shares from the TSX or the denial of an application for certain approvals, such as to have additional securities listed on the TSX, which could have a material adverse effect on the trading price of the Common Shares.

***There is a substantial risk of regulatory or political change with respect to cannabis.***

In the United States, the operations of TerrAscend and its subsidiaries are subject to a variety of laws, including, among other things, state and local regulations and guidelines relating to the cultivation, manufacture, management, transportation, distribution, sale, storage and disposal of cannabis. Changes to such laws, regulations and guidelines may cause adverse effects to the Company's business, financial condition and results of operations. Local, state and federal laws and regulations governing cannabis for medicinal and adult-use purposes are broad in control and are subject to evolving interpretations, which could require the Company to incur substantial costs associated with bringing the Companyʼs operations into compliance. In addition,

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violations of these laws, or allegations of such violations, could disrupt the Companyʼs operations and result in a material adverse effect on its financial performance. It is beyond the Companyʼs scope to predict the nature of any future change to the existing laws, regulations, policies, interpretations or applications, nor can the Company determine what effect such changes, when and if promulgated, could have on the Companyʼs business.

In the United States, the production and sale of cannabis is prohibited according to the Controlled Substances Act. If cannabis is re-classified or there are changes in U.S. controlled substance laws and regulations, such changes could have a material adverse effect on our business, financial condition, and results of operations. If cannabis is re-classified as a Schedule II or lower controlled substance, the resulting re-classification would result in the need for approval by FDA and DEA. As a result of such a re-classification, the manufacture, importation, exportation, domestic distribution, storage, sale and use of such products could become subject to a significant degree of regulation by the FDA and DEA. In that case, we may be required to be registered to perform these activities and have the security, control, recordkeeping, reporting and inventory mechanisms required by the DEA to prevent drug loss and diversion. Obtaining the necessary registrations may result in delay of the manufacturing or distribution of our products. The DEA conducts periodic inspections of registered establishments that handle controlled substances. Failure to maintain compliance could have a material adverse effect on our business, financial condition and results of operations. The DEA may seek civil penalties, refuse to renew necessary registrations, or initiate proceedings to restrict, suspend or revoke those registrations. In certain circumstances, violations could lead to criminal proceedings.

Furthermore, should the United States federal government legalize cannabis, it is possible that the FDA would seek to regulate it under the Uniform State Food, Drug and Cosmetic Act. Additionally, the FDA may issue rules and regulations, including good manufacturing practices related to the growth, cultivation, harvesting and processing of medical and adult-use cannabis. Clinical trials may be needed to verify efficacy and safety of medical cannabis products. It is also possible that the FDA would require that facilities where cannabis is grown or manufactured register with the agency and comply with certain federally prescribed regulations. In the event that some or all of these regulations are imposed, the impact on the cannabis industry is uncertain and could include the imposition of new costs, requirements, and prohibitions.

In Canada, the Cannabis Act was established on October 17, 2018, along with various related regulations. The cultivation, processing, distribution and sale of cannabis, among other things, remains subject to extensive regulatory oversight in Canada under the Cannabis Act. It is possible that these statutory requirements, including any new regulations that are subsequently issued, could significantly and adversely affect the business, financial condition and results of operations of the Company.

Furthermore, the distribution of adult-use cannabis is the responsibility of the respective provincial and territorial governments. There is no guarantee that provincial and territorial legislation regulating the distribution and sale of cannabis for adult-use purposes will continue according to their current terms, that they will not be materially amended or that such regimes will create the growth opportunities currently anticipated by the Company.

In addition, government policy changes or public opinion may also influence the regulation of the cannabis industry in Canada, the United States or elsewhere. A negative shift in the public's perception of medical or adult-use cannabis in Canada, the United States or any other applicable jurisdiction could affect future legislation or regulation. Among other things, a shift could cause state and local jurisdictions to abandon initiatives or proposals to legalize medical or adult-use cannabis, thereby limiting the number of new state or provincial jurisdictions into which the Company could expand. Any inability to fully implement the Companyʼs expansion strategy may have a material adverse effect on the Companyʼs business, financial condition and results of operations.

***The Company may encounter increasingly strict environmental health and safety regulations in connection with its operations.***

The Companyʼs operations are subject to environmental and safety laws and regulations concerning, among other things, emissions and discharges to water, air and land, the handling and disposal of hazardous and non-hazardous materials and wastes, and employee health and safety. Changes in environmental, employee health and safety or other laws, more vigorous enforcement thereof or other unanticipated events could require extensive changes to the Companyʼs operations or give rise to material liabilities, which could have a material adverse effect on the business, results of operations and financial condition of the Company.

***The Company's products may be subject to product recalls or returns.***

The Companyʼs products may be subject to recalls or returns for a variety of reasons, including product defects such as contamination, unintended harmful side effects or interactions with other substances, packaging safety, inadequate or inaccurate labeling disclosure, or other reasons outside of the control of the Company. In certain circumstances, state regulators may change certain regulations after products are already in the market, that may require the Company to issue a recall. If any of

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the Companyʼs products are recalled due to an alleged product defect or for any other reason, the Company could be required to incur the unexpected expense of the recall and any legal proceedings that might arise in connection therewith. The Company may lose a significant amount of sales and may not be able to replace those sales at an acceptable margin or at all, in addition to writing off a substantial amount of inventory or materials. Additionally, a product recall may require significant management attention. Although the Company has detailed procedures in place for testing its products, there can be no assurance that any quality, potency or contamination problems will be detected in time to avoid unforeseen product recalls, regulatory action or lawsuits. If one of the products produced by the Company were subject to a recall, the image of that product and the Company could be harmed. A recall for any of the foregoing reasons could lead to decreased demand for the Companyʼs products and could have a material adverse effect on the results of operations and financial condition of the Company. Additionally, product recalls may lead to increased scrutiny of the Companyʼs operations by regulatory agencies, requiring further management attention and potential legal fees and other expenses.

***The Company faces an inherent risk of product liability claims and other consumer protection claims as a manufacturer, processor and producer of products that are meant to be ingested by people.***

As a manufacturer of products designed to be ingested by humans, the Company faces an inherent risk of exposure to product liability claims, regulatory action and litigation if its products are alleged to have caused loss or injury. In addition, the manufacturing and sale of cannabis and other products involve the risk of injury to consumers due to tampering by unauthorized third parties, product contamination, or unauthorized sale of counterfeit products. Previously unknown adverse reactions resulting from human consumption of cannabis products alone or in combination with other medications or substances could occur. Furthermore, safety, efficacy and quality of cannabis in general, or the Company's products specifically, or associating the consumption of cannabis with illness or other negative effects or events, could have such a material adverse effect on the Company. The Company may be also subject to various product liability claims, including, among others, that the products produced by the Company caused injury or illness, include inadequate instructions for use or include inadequate warnings concerning possible inebriating effects, side effects or interactions with other substances. Consumers may unlawfully operate a vehicle or heavy equipment while under the effects of the Company's products, resulting in increased liability to the Company. A product liability claim or regulatory action against the Company could result in increased costs, could adversely affect the Companyʼs reputation with its clients and consumers generally, and could have a material adverse effect on the results of operations and financial condition of the Company.

The Companyʼs products may be considered misbranded or adulterated, or otherwise unlawful under federal and state food and drug laws and could subject the Company to local, federal, or state enforcement or private litigation. Some states permit advertising, labeling laws, false and deceptive trade practices, and other consumer-protection laws to be enforced by state attorney generals, who may seek relief for consumers, class action certifications, class wide damages and product recalls of products sold by the Company. Private litigation may also seek relief for consumers, class action certifications, class wide damages and product recalls of products sold by the Company in any of the markets in which it operates. Any actions against the Company by governmental authorities or private litigants could have a material adverse effect on the Companyʼs business, financial condition and results of operations.

***The Company may be subject to constraints on and differences in marketing its products under varying regulatory restrictions among the jurisdictions in which it operates.***

The development of the Companyʼs business and results of operations may be hindered by applicable regulatory restrictions on sales and marketing activities. For example, regulations may prohibit certain sales and marketing activities that may be deemed to target minors or make specified health claims. If the Company is unable to effectively market its products and compete for market share, or if the costs of compliance with government legislation and regulation cannot be absorbed through increased selling prices for the Companyʼs products, the Companyʼs sales and results of operations could be adversely affected.

In the United States, marketing, advertising, packaging and labeling regulations vary from state to state, potentially limiting the consistency and scale of consumer branding communication and product education efforts. Restrictions may include regulations that specify what, where and to whom product information and descriptions may appear and/or be advertised. The regulatory environment in the United States may limit the Company's ability to compete for market share in a manner similar to other industries.

***Because the Company's contracts involve cannabis and cannabis-related activities, which are not legal under U.S. federal law, the Company may face difficulties in enforcing its contracts.***

It is a fundamental principle of law that a contract will not be enforced if it involves a violation of law or public policy. Because cannabis remains illegal at a federal level, judges may refuse to enforce contracts in connection with activities that violate U.S. federal law, even if there is no violation of state law. There remains doubt and uncertainty that the Company will be able to

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legally enforce contracts it enters into if necessary. The Company cannot be assured that it will have a remedy for breach of contract, the lack of which may have a material adverse effect on the Companyʼs business, revenues, operating results, financial condition or prospects.

***Failure to comply with medical practice laws and regulations may result in impacts to the Company's operations, the imposition of monetary fines or the commencement of legal proceedings.***

In the United States, the Health Insurance Portability and Accountability Act ("HIPAA") imposes privacy and security requirements and breach reporting obligations with respect to individually identifiable health information upon "covered entities" (health plans, health care clearinghouses and certain health care providers), and their respective business associates, which include individuals or entities that create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered entity. HIPAA mandates the reporting of certain breaches of health information to HHS, affected individuals and if the breach is large enough, the media. Entities that are found to be in violation of HIPAA as a result of a breach of unsecured protected health information, a complaint about privacy practices or an audit by HHS, may be subject to significant civil, criminal, and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance. In addition, provisions of the Americans with Disabilities Act require confidential treatment of employee medical records.

In Canada, the Personal Information Protection and Electronics Documents Act (Canada) ("PIPEDA") and substantially similar legislation at the provincial level, governs the treatment of personal information held by a corporation. The Office of the Privacy Commissioner of Canada has stated that it considers the personal information of cannabis users to be considered sensitive. Canadian privacy jurisprudence regarding the obligations that private sector organizations have to individual data subjects is constantly evolving. Privacy laws in Canada are evolving at both the legislative and regulatory levels, including proposed and enacted reforms that would impose enhanced obligations and restrictions on private organizations that collect, use, and disclose personal information. These developments may include expanded individual rights, heightened transparency and consent requirements, increased regulatory oversight, and materially higher administrative monetary penalties and enforcement measures than those available under current privacy and data protection legislation in Canada. For example, it is anticipated that the Canadian federal government will introduce reforms to PIPEDA sometime this year, which will be similar to those that were tabled by the previous Canadian federal government under Bill C-11.

In addition, with respect to consumer health information, there are a number of federal and state laws protecting the confidentiality of certain patient health information, including patient records, and restricting the use and disclosure of that protected information. In Canada, we may also be required to retain certain customer personal information for prescribed periods of time pursuant to the Cannabis Act.

Overall, failure to maintain adequate compliance or safeguards regarding stakeholder privacy could materially adversely impact the Company's business and result in fines, litigation, or certain government mandated actions, and could be detrimental to the Company's ability to operate its business.

***The Company's ability to use its U.S. net operating loss carryforwards to offset its future U.S. taxable income may be subject to limitations.***

The Company's U.S. federal net operating loss carryforwards ("NOLs") generated in taxable years beginning before January 1, 2018, may be carried forward for 20 years. The Company's U.S. federal NOLs generated in taxable years beginning after December 31, 2017, may be carried forward indefinitely, but the utilization of such NOLs is limited. In addition, under Section 382 of the Code, a corporation that undergoes an "ownership change" (generally defined as a greater than 50% change (by value) in its stock ownership over a three-year period) is subject to limitations on its ability to utilize its pre-change U.S. federal NOLs to offset its future U.S. taxable income. If the Company has undergone an ownership change in the past, or if future changes in its stock ownership result in an ownership change, which may be outside of the Company's control, its ability to utilize its U.S. federal NOLs may be limited by Section 382 of the Code. It is uncertain if and to what extent U.S. states will conform to U.S. federal income tax law with respect to the treatment of NOLs. As a result, the Company's ability to use its U.S. NOLs to offset its future U.S. taxable income may be subject to limitations, which could increase its tax liability and decrease its cash flow.

***The Company may be subject to heightened scrutiny by Canadian regulatory authorities, which could negatively affect its business.***

The Companyʼs future investments and operations in the United States may become the subject of heightened scrutiny by regulators, stock exchanges and other authorities in Canada, including placing certain restrictions on the Company's ability to

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operate or acquire other cannabis businesses in the United States. As a result, the Company may be subject to significant direct and indirect interaction with public officials. There can be no assurance that this heightened scrutiny will not in turn lead to the imposition of certain restrictions on the Companyʼs ability to invest in the United States or any other jurisdiction, in addition to those described herein.

Although a memorandum of understanding signed by the Canadian Depository for Securities ("CDS") and the Canadian recognized exchanges (Aequitas NEO Exchange Inc., the CSE, the TSX, and the TSX Venture Exchange) dated February 8, 2018, confirms that CDS relies on the exchanges to review the conduct of listed issuers, and therefore there is currently no CDS ban on the clearing of securities of issuers with cannabis-related activities in the United States, there can be no guarantee that this approach to regulation will continue in the future. If such a ban were to be implemented, it would have a material adverse effect on the ability of holders of Common Shares to make and settle trades. In particular, Common Shares would become highly illiquid as and until an alternative was implemented, investors would have no ability to affect a trade of Common Shares through the facilities of a stock exchange.

***The Company's investors, directors, officers, employees and contractors who are not U.S. citizens may be denied entry into the United States, which may negatively affect the Company's business.***

Because cannabis remains illegal under U.S. federal law, those employed at or investing in Canadian or state regulated cannabis companies could face detention, denial of entry or lifetime bans from the United States for their business associations or investments. Entry happens at the sole discretion of the U.S. Customs and Border Protection officers on duty, and these officers have wide latitude to ask questions to determine the admissibility of a foreign national. The Government of Canada has started warning travelers on its website that previous use of cannabis, or any substance prohibited by U.S. federal laws, could mean denial of entry to the U.S. Business or financial involvement in the legal cannabis industry in Canada or in the United States could also be reason enough for U.S. border guards to deny entry*.*

**Risks Related to the Company's Business, Operations and Industry**

***The Company's outstanding indebtedness may adversely affect its business, results of operations and financial condition. The Company's failure to comply with applicable covenants could trigger events that may materially adversely affect the Company's business, results of operations and financial condition.***

The Company's outstanding indebtedness may adversely affect the Company's business, results of operations and financial condition. As of December 31, 2025, the Company had approximately $244,807 in aggregative principal amount of debts outstanding, $217,682 of which is outstanding under the FG Loan (as defined below). See the section titled "*Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources*" of this Annual Report for more information regarding the Company's indebtedness. As a result of its indebtedness, a portion of the Company's cash flow will be required to pay interest and principal on its outstanding loans. The Company's indebtedness could have important consequences. For example, it could:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•make it more difficult for the Company to satisfy its obligations with respect to any other debt it may incur in the future;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•increase the Company's vulnerability to general adverse economic and industry conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•require the Company to dedicate a significant portion of its cash flow from operations to payments on its indebtedness and related interest, thereby reducing the availability of its cash flow to fund working capital, capital expenditures and other general corporate purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•limit the Company's flexibility in planning for, or reacting to, changes in its business and the industry in which it operates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•increase the Company's cost of borrowing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•place the Company at a competitive disadvantage compared to its competitors that may have less debt; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•limit the Company's ability to obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements or general corporate purposes.

The Company expects to use cash flow from operations and additional outside financings to meet its current and future financial obligations, including funding its operations, debt service and capital expenditures. The Company's ability to make these payments depends on its future performance, which will be affected by financial, business, economic and other factors, many of which the Company cannot control. The Company's business may not generate sufficient cash flow from operations in the future, which could result in the Company being unable to repay indebtedness, or to fund other liquidity needs. If the Company

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does not generate sufficient cash from operations, it may be forced to reduce or delay its business activities and capital expenditures, sell assets, obtain additional debt or equity capital or restructure or refinance all or a portion of its debt on or before maturity. The Company cannot make any assurances that it will be able to accomplish any of these alternatives on terms acceptable to it, or at all. In addition, the terms of existing or future indebtedness may limit the Company's ability to pursue any of these alternatives.

Furthermore, the instruments governing the Company's indebtedness include obligations and covenants that limit the Company's discretion with respect to certain business matters and require the Company to satisfy certain financial requirements. For example, the FG Loan (as defined below) includes covenants that limit the borrowers' ability to, among, other things, (i) incur additional indebtedness or guarantee indebtedness; (ii) create liens; (iii) pay dividends; (iv) make investments; (v) enter into transactions with affiliates; and (vi) consolidate, merge, sell or otherwise dispose of all or substantially all of their respective assets. The Company may not receive consent from lenders to take certain actions such as divest assets or enter into material agreements. The Company can make no assurances that it will be able to comply with such obligations and covenants and any failure to comply could result in a default, which, if not amended, cured or waived, could permit acceleration of the indebtedness and the exercise of other remedies available to lenders. In such event, there can be no assurance that the Company would be able to obtain any amendment, cure, waiver or other relief on terms acceptable to the Company. If the Company is unable to obtain relief from an event, the relevant indebtedness may be accelerated and the related collateral may be foreclosed upon. In addition, such circumstances may result in the cross-default or cross-acceleration of other debt, any of which would materially adversely affect the Company's business, results of operations, and financial condition.

***The Company may require substantial additional financing to operate its business and it may face difficulties acquiring additional financing on terms acceptable to the Company, or at all.***

The building and operation of the Companyʼs business, including its facilities, are capital intensive. The Company expects that significant additional capital may be needed in the future to continue its planned operations, undertake capital expenditures, undertake acquisitions, or other business combination transactions. The Company expects to finance its cash needs through cash flow from ongoing operations and a combination of equity offerings, debt financings and other strategies. The Company cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to the Company, if at all. If the Company engages in debt financing, it may be required to accept terms that restrict or limit the Company's ability to take specific actions, such as incurring additional indebtedness, making capital expenditures or declaring dividends, and other restrictive covenants that could adversely impact the Company's ability to conduct its business. In addition, weakness and volatility in the capital markets and the economy in general could limit the Company's access to the capital markets and increase its cost of borrowing.

***An adverse change in market conditions, including a sustained decline in the price of the Common Shares, negative changes to the Company's position in the market, or lack of growth in demand for its products and services could be considered to be an impairment triggering event. Such changes could impact valuation assumptions relating to the recoverability of assets and have resulted in, and may in the future result in, impairment charges to the Company's goodwill or long-lived asset balances, which would negatively impact the Company's operating results and harm its business.*** 

There are inherent uncertainties in management's estimates, judgments and assumptions used in assessing recoverability of goodwill, intangible, and other long-lived assets. Any material changes in key assumptions, including failure to meet business plans, a deterioration in the United States, Canadian and global financial markets, general economic conditions, an increase in interest rates or an increase in the cost of equity financing by market participants within the industry, regulatory developments, impact on operations due to changing consumer preferences, overall competitive activity within the market, or other unanticipated events and circumstances, could potentially result in an impairment charge. Goodwill and indefinite lived intangible assets are reviewed for impairment annually and whenever there are events or changes in circumstances that indicate that the carrying amount has been impaired. The Company first performs a qualitative assessment. If based on the results of a qualitative assessment it has been determined that it is more likely than not that the carrying value of a reporting unit exceeds its fair value, an additional quantitative impairment test is performed which compares the carrying value of the reporting unit to its estimated fair value. If the carrying value exceeds the estimated fair value, an impairment is recorded. The Company has recorded impairments for each of the fiscal years ending December 31, 2025, 2024 and 2023. The Company may be required to record a significant charge to earnings in its consolidated financial statements during the period in which any impairment of the Company's goodwill or intangible and other long-lived assets is determined, which might have a materially adverse impact on the Company's business operations and its financial position or results of operations.

***Consolidation in the cannabis industry and other changes to the competitive environment can impact the Company's margins and profitability.*** 

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The markets for cannabis in the United States and Canada are becoming increasingly competitive and are evolving rapidly. The Company may face intense and increasing competition from existing operators and new entrants in each of the markets in which the Company operates. Some of these competitors may be larger multi-state operators, have longer operating histories, more financial resources and manufacturing experience that the Company, or offer competitive products. There is also the potential that the cannabis industry will undergo further consolidation that may pose a risk to the Company's ability to compete.

As a result of this competition, the Company may be unable to maintain its operations or develop them as currently intended. Increased competition by larger, better-financed competitors with geographic advantages could materially and adversely affect its business, financial condition and results of operations. If the Company is unable to achieve its business objectives, such failure could materially adversely affect the Company's business.

As the emerging cannabis industry continues to rapidly evolve, the Company may not be able to create and maintain a competitive advantage in the marketplace. The Company's success will depend on its ability to respond to, among other things, changes in consumer preferences, regulatory conditions, and general competitive pressures. Should the Company be unable to adequately respond to such changes, it could have a material adverse effect on the Company's business, financial condition, operating results, liquidity, cash flow and operational performance.

In each market the Company operates in, the number of licenses granted, and the number of license holders ultimately authorized by the regulator, or previously authorized licenses becoming more commercially active, could have an impact on its business. If the number of users of medical and/or adult-use cannabis increases, the demand for products will increase and the Company expects that competition will become more intense, as current and future competitors begin to offer an increasing number of diversified products. To remain competitive, the Company may require increased levels in research and development, sales and customer support. The Company may not have sufficient resources to maintain research and development, sales and customer support efforts on a competitive basis which could have a material adverse effect on the Company's business, financial condition and results of operations.

***The Company is dependent on suppliers and key inputs for the cultivation, extraction and production of cannabis products.***

The ability of the Company to compete and grow will be dependent on it having access, at a reasonable cost and in a timely manner, to required equipment, parts and components. No assurances can be given that the Company will be successful in maintaining its required supply of equipment, parts and components. Global supply challenges have added further uncertainties around availability and price of equipment, parts and components. It is also possible that the final costs of major equipment contemplated by the Companyʼs capital expenditure plans may be significantly greater than anticipated by the Companyʼs management and may be greater than funds available to the Company, in which circumstance the Company may curtail, or extend the timeframes for completing, its capital expenditure plans. This could have an adverse effect on the business, financial condition, results of operations or prospects of the Company.

The cannabis business is dependent on a number of key inputs and their related costs including raw materials and supplies related to growing operations, as well as electricity, water and other local utilities. Any significant interruption or negative change in the availability or economics of the supply chain for key inputs could materially impact the business, financial condition, results of operations or prospects of the Company. In addition, any restrictions on the ability to secure required supplies or utility services or to do so on commercially acceptable terms could have a materially adverse impact on the business, financial condition and operating results. Some of these inputs may only be available from a single supplier or a limited group of suppliers. If a sole source supplier was to go out of business, the Company might be unable to find a replacement for such source in a timely manner or at all. If a sole source supplier were to be acquired by a competitor, that competitor may elect not to sell to the Company in the future. Any inability to secure required supplies and services or to do so on appropriate terms and/or agreeable terms could have a materially adverse impact on the business, financial condition, results of operations or prospects of the Company.

***The Companyʼs business is subject to the risks inherent in agricultural operations.***

The Companyʼs business involves the cultivation of the cannabis plant. The cultivation of this plant is subject to agricultural risks related to insects, plant diseases, unstable growing conditions, water and electricity availability and cost, and force majeure events. Certain agricultural risks, such as insects or plant diseases, can result in a prolonged disruption of its operations. Although the Company cultivates its cannabis plants indoors or in greenhouses, each with climate-controlled rooms staffed by trained personnel, there can be no assurance that agricultural risks will not have a material adverse effect on the cultivation of its cannabis. The Company may, in the future, cultivate cannabis plants outdoors, which would also subject it to related agricultural risks.

***The Companyʼs intellectual property may be difficult to protect, and failure to do so may negatively impact its business.***

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The ownership and protection of trademarks, trade secrets and intellectual property rights are significant aspects of the Companyʼs future success. The Company has no patented technology or trademarked business methods at this time, nor has it registered any patents. While the Company has filed trademark applications in the United States and Canada, the Company's ability to obtain registered or enforce trademark protection for cannabis-related goods and services, in particular for cannabis itself, may be limited in certain countries outside of Canada, including the United States, where registered federal trademark protection is currently unavailable for trademarks covering cannabis-related products and services that are illegal under the Controlled Substances Act.

Furthermore, other countries may not protect intellectual property rights to the same standards as the United States or Canada. Actions taken to protect or preserve intellectual property rights may require significant financial and other resources which may have a significant impact on the Companyʼs business.

In addition, other parties may claim that the Companyʼs products infringe on proprietary and patent protected rights. Such claims, whether or not meritorious, may result in the Companyʼs required expenditure of significant financial and other resources, legal fees, result in injunctions, temporary restraining orders and/or require the payment of damages.

***Directors and officers of the Company have faced, and may in the future face, conflicts of interests regarding the Company's business strategy.***

Certain of the directors and officers of the Company are also directors and officers of other companies or are engaged and will continue to be engaged in activities that may put them in conflict with the business strategy of the Company. For example, certain funds controlled by the Company's Executive Chairman, Jason Wild, a related party of the Company, are members of the loan syndicate of the FG Loan (as defined below). Consequently, there exists the possibility for such directors and officers to be in a position of conflict.

In particular, the Company may also become involved in other transactions which conflict with the interests of its directors and officers, who may from time-to-time deal with persons, firms, institutions or companies with which the Company may be dealing, or which may be seeking investments similar to those desired by it. All decisions to be made by directors and officers of the Company are required to be made in accordance with their duties and obligations to act honestly and in good faith with a view to the best interests of the Company. In addition, the directors and officers are required to declare their interests in, and such directors are required to refrain from voting on, any matter in which they may have a material conflict of interest. Failure to adequately manage or disclose conflicts of interest may result in public accusations, investigations, or litigation, and could have material adverse effect on the Company's business, operating results and financial condition.

***The Company's profitability may be impacted by declining wholesale or retail cannabis prices in certain markets and shifting market conditions.*** 

The Company's gross profits may decline as a result of a reduction in wholesale or retail cannabis prices. The Company's profitability is sensitive to fluctuations in wholesale and retail prices caused by crop seasonality, disruptions to supply chains, increased competition, government taxes or levies, and other market conditions, all of which are factors beyond the Company's control. While the Company has observed that the cannabis industry in any given market generally progresses through identifiable phases as that market evolves, there is currently not an established market price for cannabis and the price of cannabis may change rapidly. Any price decline may have a material adverse effect on the Company.

If a significant number of new licenses are granted by a regulator in a market in which the Company operates, the Company may experience increased competition for market share and may experience downward price pressure on its products as new entrants increase production. The Company may also face competition from illegal cannabis dispensaries that are selling cannabis to individuals despite not having a valid license. The continued declining wholesale and retail price will impact the Company's overall business.

***The Company may face unfavorable publicity or consumer perception of the safety, efficacy and quality of its cannabis products.***

The Company believes the cannabis industry is highly dependent upon consumer perception regarding the safety, efficacy and quality of the cannabis distributed to such consumers. Consumer perception of the Companyʼs products can be significantly influenced by scientific research or findings, regulatory investigations, litigation, media attention and other publicity regarding the consumption of medical cannabis products. There can be no assurance that future scientific research, findings, regulatory proceedings, litigation, media attention or other research findings or publicity will be favorable to the medical cannabis market or any particular product, or consistent with earlier publicity.

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Future research reports, findings, regulatory proceedings, litigation, media attention or other publicity that are perceived as less favorable than, or that question, earlier research reports, findings or publicity could have a material adverse effect on the demand for the Companyʼs products and the business, results of operations, financial condition of the Company. In particular, adverse publicity reports or other media attention regarding the safety, efficacy and quality of cannabis in general, or the Companyʼs products specifically, or associating the consumption of cannabis with illness or other negative effects or events, could have such a material adverse effect. Such adverse publicity reports or other media attention could arise even if the adverse effects associated with such products resulted from consumers' failure to consume such products appropriately or as directed.

Further, adverse publicity reports or other media attention regarding the safety, efficacy and quality of cannabis in general, or the Company's products specifically, or associating the consumption of cannabis with illness or other negative effects or events, could have such a material adverse effect on the Company. Although the Company uses quality control processes and procedures to ensure our consumer packaged goods meet the Company's standards, a failure or alleged failure of such processes and procedures could result in negative consumer perception of products or legal claims against the Company. Adverse publicity reports or other media attention could arise even if the adverse effects associated with such products resulted from consumers' failure to consume such products appropriately or as directed.

The Company offers certain vaporizer or "vape" products. The use of vape products and vaping may pose health risks. According to the Centers for Disease Control, vape products may contain ingredients that are known to be toxic to humans and may contain other ingredients that may not be safe. Because clinical studies about the safety and efficacy of vape products have not been submitted to the FDA, consumers currently have no way of knowing whether they are safe for their intended use or what types or concentrations of potentially harmful chemicals or by-products are found in these products. It is also uncertain what implications the use of vape or other inhaled products, such as cannabis flower that is smoked, may have on respiratory illnesses. Although the Company believes that it takes care in protecting its image and reputation, the Company does not ultimately have direct control over how it is perceived by others. Adverse findings, regulatory investigations, litigation, media attention and other publicity regarding the consumption of vape or other inhaled products, including adverse publicity regarding underage use of vape or other inhaled products, may result in reputation loss and in decreased investor confidence, increased challenges in developing and maintaining community relations and an impediment to the Companyʼs overall ability to advance its business, thereby having a material adverse impact on the financial condition and results of operations of the Company.

***The Company faces reputational risks, which may negatively impact its business.***

Damage to the Companyʼs reputation can be the result of the actual or perceived occurrence of any number of events, and could include any negative publicity, whether true or not. The increased usage of social media and other web-based tools used to generate, publish, and discuss user-generated content and to connect with other users has made it increasingly easier for individuals and groups to communicate and share opinions and views regarding the Company and its activities, whether true or not. Although the Company believes that it operates in a manner that is respectful to all shareholders and that it takes care in protecting its image and reputation, the Company does not ultimately have direct control over how it is perceived by others. Reputation loss may result in decreased investor confidence, increased challenges in developing and maintaining community relations, and an impediment to the Companyʼs overall ability to advance its projects, thereby having a material adverse impact on financial performance, financial condition, cash flows, and growth prospects. Further, the parties with which the Company does business may perceive that they are exposed to reputational risk as a result of the Companyʼs cannabis business activities. Failure to establish or maintain business relationships could have a material adverse effect on the Company.

***The Company is dependent on consumer acceptance of and public demand for its products.*** 

The Company's ability to generate revenue and be successful in the implementation of its business plan is dependent on consumer acceptance of and demand for its products. Acceptance of the Company's products depends on several factors, including availability, cost, ease of use, familiarity of use, convenience, effectiveness, safety and reliability. If customers do not accept the Company's products, or if such products fail to adequately meet customers' needs and expectations, the Company's ability to generate revenue could be negatively impacted. As the number of available licenses increase in the markets in which the Company operates, and the illicit market and psychoactive hemp-based products proliferate, additional competition and increased product availability may result in competitors undercutting the Company's prices. From time to time, the Company may need to reduce its prices in response to competitive and customer pressures and to maintain its market share, which could materially reduce the Company's revenue.

***The Company (and the third parties with whom it works) faces physical security risks, as well as risks related to its information technology systems, data, potential cyber or phishing attacks, and security incidents or other interruption.***

In the ordinary course of its business, the Company, and the third parties with whom it works, collects, receives, stores, processes, generates, uses, transfers, discloses, makes accessible, protects, secures, disposes of, transmits, and shares personal

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data about its patients, adult-use customers and guests and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, sensitive third-party data, business plans, transactions, and financial information (collectively, "sensitive data").

If there was a breach in physical security systems and the Company became victim to a robbery or theft or if there was a failure of information technology systems or a component of information technology systems, or if the Company's sensitive data were otherwise compromised, it could, depending on the nature of any such security incident or other interruption, adversely impact the Companyʼs reputation, business continuity and results of operations. Any such security incident or other interruption could expose the Company to additional liability and to potentially costly litigation, government enforcement actions, additional reporting requirements and/or oversight, indemnification obligations, negative publicity, increase expenses relating to the resolution and future prevention of these security incident or other interruption and may deter potential customers from choosing the Companyʼs products.

A security incident or other interruption may occur through procedural or process failure, information technology malfunction, or deliberate unauthorized intrusions. Cyber-attacks, malicious internet-based activity, online and offline fraud such as phishing schemes, and other similar activities threaten the confidentiality, integrity, and availability of the Company's sensitive data and information technology systems, and those of the third parties with whom it works. Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer "hackers," threat actors, "hacktivists," organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors.

Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major conflicts, the Company, and the third parties with whom it works are vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt its systems and operations, supply chain, and ability to produce, sell and distribute its goods and services.

The Company and the third parties with whom it works are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, cable cuts, damage to physical plants, power loss, vandalism, theft, and other similar threats.

In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in the Company's operations, loss of sensitive data and income, reputational harm, and diversion of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but the Company may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.

Remote work has increased risks to the Company's information technology systems and data, as its employees utilize network connections, computers, and devices outside its premises or network, including working at home, while in transit and in public locations. Additionally, future or past business transactions (such as acquisitions or integrations) could expose the Company to additional cybersecurity risks and vulnerabilities, as its systems could be negatively affected by vulnerabilities present in acquired or integrated entities' systems and technologies. Furthermore, the Company may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into the Company's information technology environment and security program should any security issues be identified.

In addition, the Company's reliance on third parties could introduce new cybersecurity risks and vulnerabilities, including supply-chain attacks, and other threats to its business operations. The Company has entered into agreements with third parties for hardware, software, telecommunications and other information technology services in connection with its operations. The Company attempts to ensure Sarbanes-Oxley Act (as defined below) compliance by requiring vendors that interact with financially material data to provide SOC certification (Type 1 or Type 2) of their internal controls. Additionally, every new software provider Company works with is required to go through a security audit of their infrastructure and security practices. However, the Company's ability to ensure these third parties' information security practices is limited, and these third parties may not have adequate information security measures in place. If these third parties experience a security incident or other interruption, the Company could experience adverse consequences. While the Company may be entitled to damages if these third parties fail to satisfy their privacy or security-related obligations to the Company, any award may be insufficient to cover the Company's damages, or the Company may be unable to recover such award. In addition, supply-chain attacks have

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increased in frequency and severity, and the Company cannot guarantee that third parties' infrastructure in its supply chain or the third parties' with whom it works supply chains have not been compromised.

The Companyʼs operations depend, in part, on how well it and the third parties with whom it works protect networks, equipment, information technology systems and software against compromise or damage from the aforementioned or similar threats. The Companyʼs operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, information technology systems and software, as well as pre-emptive expenses to mitigate the risks of failures.

The Company expends resources or may have to modify its business activities to try to protect against security incidents or other interruption. Additionally, certain data privacy and security obligations require the Company to implement and maintain specific security measures or industry-standard or reasonable security measures to protect its information technology systems and sensitive data.

In 2024, the Company identified and quickly contained and remediated several non-material cybersecurity incidents. The Company takes steps designed to detect, mitigate and remediate vulnerabilities in its information systems (such as its hardware or software, including that of third parties with whom it works), but it may not be able to detect and remediate all such vulnerabilities, including on a timely basis. Further, the Company may in the future experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities. Vulnerabilities could be exploited and result in a security incident or other interruption.

While the Company has implemented security measures designed to protect against security incidents and other interruptions, there can be no assurance that these measures will be effective. It may be difficult or costly to detect, investigate, mitigate, contain, and remediate a security incident or other interruption. Despite the Company's efforts to detect, investigate, mitigate, contain, and remediate a security incident, the Company may not be successful. Actions taken by the Company or the third parties with whom it works to detect, investigate, mitigate, contain, and remediate a security incident or other interruption could result in outages, data losses, and disruptions of the Company's business. Threat actors may also gain access to other networks and systems after a compromise of the Company's networks and systems.

Certain of the previously identified or similar threats have in the past and may in the future cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to the Company's sensitive data or its information technology systems, or those of the third parties with whom it works.

For example, in September 2024, the Company became aware of a security incident where a contractor's firewall VPN account was accessed. This allowed a threat actor to scan a site's network and attempt to login to devices unsuccessfully, as the incident was immediately detected and stopped. A security incident or other interruption could disrupt the Company's ability (and that of the third parties with whom it works) to provide its goods and services.

Applicable data privacy and security obligations may require the Company, or it may voluntarily choose, to notify relevant stakeholders (including affected individuals, customers, regulators, and investors) of security incidents or other interruptions, or to take other actions, such as providing credit monitoring and identity theft protection services. Such disclosures and related actions are costly, and the disclosure or the failure to comply with applicable requirements could lead to adverse consequences.

Some of the Company's contracts do not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in its contracts are sufficient to protect it from liabilities, damages, or claims related to its data privacy and security obligations. The Company cannot be sure that its insurance coverage will be adequate or sufficient to protect it from, or to mitigate liabilities arising out of its privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.

In addition to experiencing a security incident or other interruption, third parties may gather, collect, or infer sensitive data about it from public sources, data brokers, or other means that reveals competitively sensitive details about the Company and could be used to undermine its competitive advantage or market position. Additionally, sensitive information of the Company or its customers could be leaked, disclosed, or revealed as a result of or in connection with its employees', personnel's, or vendors' use of generative artificial intelligence ("AI") technologies.

***The Company may be subject to growth-related risks, which could negatively affect its business.***

The Company may be subject to growth-related risks, including capacity constraints and pressure on its internal systems and controls. The ability of the Company to manage growth effectively will require it to continue to implement and improve its operational and financial systems and to expand, train and manage its employee base. Such expansion is dependent on availability of capital funding, continuing to enter into successful business arrangements and receiving necessary regulatory

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and shareholder approvals, as required. The inability of the Company to deal with this growth may have a material adverse effect on the Companyʼs business, financial condition, results of operations and prospects.

***The Company may be adversely impacted by rising or volatile energy costs.***

The Companyʼs cannabis growing and manufacturing operations, which account for approximately 50% of the products sold in the Company's own retail stores, consume considerable energy, which make the Company vulnerable to rising energy costs. Accordingly, rising or volatile energy costs have and may further adversely impact the Company's business and profitability. Furthermore, the Company may face challenges in accessing sufficient utilities to meet the energy, water or sewage requirements for cannabis growing and manufacturing operations.

***The Company's internal controls over financial reporting may not be effective, and the Company's independent auditors may not be able to certify as to their effectiveness, which could have a significant and adverse effect on the Company's business.***

The Company is subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002, as amended (the "Sarbanes-Oxley Act"). Pursuant to Section 404 of the Sarbanes-Oxley Act, the Company is required to perform system and process evaluation and testing of its internal control over financial reporting to allow Company management to report on the effectiveness of its internal control over financial reporting. Furthermore, if at such time, the Company no longer qualifies as an "emerging growth company," its independent registered public accounting firm will be required to issue an annual report that attests to the effectiveness of the Company's internal control over financial reporting.

The Company incurs expenses and diversion of Company management's time in its efforts to comply with Section 404 of the Sarbanes-Oxley Act regarding internal controls over financial reporting. Effective internal controls over financial reporting are necessary for the Company to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause the Company to fail to meet its reporting obligations. In addition, any testing by the Company conducted in connection with Section 404 of the Sarbanes-Oxley Act, or the subsequent testing by the Company's independent registered public accounting firm when required, may reveal deficiencies in the Company's internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retrospective changes to the Company's consolidated financial statements or identify other areas for further attention or improvement. Moreover, the Company's internal controls over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objective will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected. If the Company is unable to assert that its internal control over financial reporting is effective, investors could lose confidence in the Company's reported financial information, the trading price of the Common Shares could decline and the Company could be subject to sanctions or investigations by the SEC or other regulatory authorities.

***Demand for the Company's products is difficult to forecast due to limited and unreliable market data.***

As a result of recent and ongoing regulatory and policy changes in the medical and adult-use cannabis industry, the market data available is limited and unreliable. Federal and state laws prevent widespread participation and hinder market research. Therefore, the Company must rely largely on its own market research to forecast sales as detailed forecasts are not generally obtainable from other sources at this early stage of the industry. Market research and projections by the Company of estimated total retail sales, demographics, demand, and similar consumer research are based on assumptions from limited and unreliable market data, and generally represent the personal opinions of the Companyʼs management team as of the date of this Annual Report. A failure in the demand for its products to materialize as a result of competition, technological change or other factors could have a material adverse effect on the business, results of operations, financial condition or prospects of the Company.

***The Company's inability to attract and retain key personnel, or its inability to maintain relations with its employees, unions and other employee representatives, could materially adversely affect its business.***

The success of the Company is dependent upon the ability, expertise, judgment, discretion and good faith of its senior management, which are key personnel. Moreover, the Companyʼs future success depends on its continuing ability to attract, develop, motivate and retain highly qualified and skilled employees. Qualified individuals are in high demand, and the Company may incur significant costs to attract and retain them. The Company does not maintain "key man" insurance policies on the lives of its key personnel, or the lives of any of its other employees. In order to induce valuable employees to continue their employment with the Company, the Company has provided certain key personnel stock options and restricted stock units that vest over time. The value to employees of such equity grants that vest over time is significantly affected by movements in

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the price of the Common Share that are beyond the Company's control, and may at any time be insufficient to counteract more lucrative offers from other companies. The Company is limited in its ability to address declines in the value of employee equity grants in an effort to retain key personnel. Despite the Company receiving shareholder approval in 2025 to re-price the stock options of the Company's employees, subject to certain conditions, there is not guarantee that the Company's shareholders or the stock exchanges on which the Common Shares are listed will approve re-pricing efforts in the future. This could result in the inability to retain key personnel if the value of employees' stock options decline. Additionally, if the Company were to reprice any share option without the approval of our shareholders, as permitted under certain circumstances, then proxy advisory firms may issue a negative recommendation on certain of our compensation-related proposals at future annual meetings of our shareholders. In addition, if the Company's share-based compensation otherwise ceases to be viewed as a valuable benefit, the Company's ability to attract, retain and motivate key personnel could be weakened, which could harm its business. The loss of the services of key personnel, or an inability to attract other suitably qualified persons when needed, could have a material adverse effect on the Companyʼs ability to execute on its business plan and strategy, and the Company may be unable to find adequate replacements on a timely basis, or at all. While employment agreements are customarily used as a primary method of retaining the services of such key personnel these agreements cannot assure the continued services of such employees.

There is no assurance that any of the Companyʼs existing personnel who presently or may in the future require a security clearance will be able to obtain or renew such clearances or that new personnel who require a security clearance will be able to obtain one. A failure by such key personnel to maintain or renew their security clearance would result in a material adverse effect on the Companyʼs business, financial condition and results of operations. In addition, if any key personnel leave the Company, and the Company is unable to find a suitable replacement that has a security clearance in a timely manner, or at all, it could have a material adverse effect on the Companyʼs business, financial condition and results of operations.

The Company may not be able to attract or retain qualified management and other key employees in the future due to the intense competition for a limited number of qualified personnel in its industry. Many of the other cannabis companies that it competes against for qualified personnel have greater financial and other resources, different risk profiles and a longer history in the industry than the Company does. They also may provide more diverse opportunities and better chances for career advancement. Some of these characteristics may be more appealing to high quality candidates than what the Company has to offer. If the Company is unable to continue to attract and retain high quality personnel, the rate and success at which it can develop and market its products will be limited.

In addition, certain of the Company's employees are covered by collective bargaining agreements. These agreements typically contain provisions regarding the general working conditions of such employees, including provisions that could affect the Company's ability to restructure its operations, close facilities, or reduce the number of its employees. The Company may not be able to extend existing collective bargaining agreements or, upon the expiration of such agreements, negotiate such agreements in a favorable and timely manner or without work stoppages, strikes or similar actions. Any deterioration of the relationships with its employees, unions and other employee representatives, or any material work stoppage, strike or similar action could have a material adverse effect on the Company's business results, cash flows, financial condition or prospects. Furthermore, the Company's actions or responses to any such negotiations, labor disputes, work stoppages or strikes could negatively impact its corporate reputation and have adverse effects on its business.

***The Company and its investors may have difficulty enforcing their legal rights.***

In the event of a dispute arising from TerrAscendʼs U.S. operations, TerrAscend may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdictions of courts in Canada. Similarly, to the extent that the Companyʼs assets are located outside of Canada, investors may have difficulty collecting from the Company any judgments obtained in the Canadian courts and predicated on the civil liability portions of securities provisions. The Company may also be hindered or prevented from enforcing its rights with respect to a governmental entity or instrumentality because of the doctrine of sovereign immunity.

In addition, all of the Company's directors and officers reside outside of Canada. Some or all of the assets of such persons may be located outside of Canada. Therefore, it may not be possible for Company shareholders to collect or to enforce judgments obtained in Canadian courts predicated upon the civil liability provisions of applicable Canadian securities laws against such persons. Moreover, it may not be possible for Company shareholders to effect service of process within Canada upon such persons. Courts in the United States may refuse to hear a claim based on a violation of Canadian securities laws on the grounds that such jurisdiction is not the most appropriate forum to bring such a claim. Even if a United States court agrees to hear a claim, it may determine that the local law, and not Canadian law, is applicable to the claim. If Canadian law is found to be applicable, the content of applicable Canadian law must be proven as a fact, which can be a time-consuming and costly process.

***The Company (and the third parties with whom it works) is subject to stringent and evolving U.S. and foreign laws, regulations, rules, contractual obligations, policies and other obligations related to data privacy and security. Its actual or*** 

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***perceived failure (or that of the third parties with whom it works) to comply with such obligations could lead to regulatory investigations or actions; litigation; fines and penalties; disruptions of business operations; reputational harm; loss of revenue or profits; and other adverse business consequences.***

The Company's data processing activities subject it to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security.

In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws). For example, there are a number of federal, state, and local laws protecting the confidentiality of certain health-related information of the Company's patients and customers, including their health-related records, and restricting the use and disclosure of that information.

Additionally, numerous U.S. states have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data. As applicable, such rights include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making. The exercise of these rights may impact the Company's business and ability to provide its products and services. Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as conducting data privacy impact assessments. These state laws allow for statutory fines for noncompliance. For example, the CCPA applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights. The CCPA provides for fines and allows private litigants affected by certain data breaches to recover significant statutory damages.

Similar laws have passed or are being considered in several other states, as well as at the federal and local levels, and more states are expected to pass similar laws in the future. To the extent applicable, these developments will further complicate compliance efforts, as well as increase legal risk and compliance costs for us and the third parties with whom it works.

Furthermore, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 and the TCPA impose specific requirements on communications with customers. For example, the TCPA imposes various consumer consent requirements and other restrictions on certain telemarketing activity and other communications with consumers by phone, fax or text message. TCPA violations can result in significant financial penalties, including penalties or criminal fines imposed by the Federal Communications Commission or fines of up to $1,500 per violation imposed through private litigation or by state authorities. Outside the United States, an increasing number of laws, regulations, and industry standards may govern data privacy and security. For example, Canada's PIPEDA imposes strict requirements for processing personal data.

In addition to data privacy and security laws, the Company is bound by other obligations related to data privacy and security, including contractual obligations and self-regulatory standards (e.g., PCI-DSS), and its efforts to comply with such obligations may not be successful. For example, the Company relies on third parties to process payment card data who are subject to PCI-DSS, and its business may be negatively impacted if these third parties are fined or suffer other consequences as a result of PCI-DSS noncompliance. Additionally, the Company publishes privacy policies, marketing materials, and other public or external facing statements concerning data privacy and security. If found to be deficient, lacking in transparency, deceptive, unfair, misleading or misrepresentative of facts or its practices, the Company may be subject to investigation, enforcement actions by regulators, or experience other adverse consequences.

The Company's employees and personnel may use generative AI technologies to assist with their work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy obligations. Governments have passed and are likely to pass additional laws regulating generative AI. The Company's use of this technology could result in additional compliance costs, regulatory investigations and actions, and lawsuits. If the Company is unable to use generative AI, this could make its business less efficient and result in competitive disadvantages.

Obligations related to data privacy and security (and consumer's data privacy expectations) are quickly changing, becoming increasingly stringent, and creating uncertainty. Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions. Preparing for and complying with these obligations requires the Company to devote significant resources and may necessitate changes to its services, information technologies, systems, and practices and to those of any third parties with whom it works.

The Company may at times fail, or be perceived to have failed, in its efforts to comply with its data privacy and security obligations. Moreover, despite its efforts, the Company's personnel or third parties with whom it works may fail to comply

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with such obligations, which could negatively impact its business operations. If the Company or the third parties with whom it works fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, it could face significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class-action claims); additional reporting requirements and/or oversight; bans on processing personal data; and orders to destroy or not use personal data. In particular, plaintiffs have become increasingly more active in bringing privacy-related claims against companies, including class claims and mass arbitration demands. Some of these claims allow for the recovery of statutory damages on a per violation basis, and, if viable, carry the potential for monumental statutory damages, depending on the volume of data and the number of violations.

Any of these events could have a material adverse effect on the Company's reputation, business, or financial condition, including but not limited to: loss of customers; inability to process personal data or to operate in certain jurisdictions; limited ability to develop or commercialize its products; expenditure of time and resources to defend any claim or inquiry; adverse publicity; or substantial changes to its business model or operations.

***The Company may not have access to U.S. bankruptcy protections available to non-cannabis businesses.*** 

Because cannabis is a Schedule I controlled substance under the Controlled Substances Act, courts may deny cannabis businesses federal bankruptcy protections, making it difficult for the Company to restructure our operations and lenders to be made whole on their investments in the cannabis industry in the event of a bankruptcy. If the Company were to experience a bankruptcy, there is no guarantee that United States federal bankruptcy protections would be available to the Company, which would have a material adverse effect on us and may make it more difficult for us to restructure our operations or obtain debt financing.

***The development of the Company's products is complex and requires significant investment.***

The introduction of new products embodying new methodologies, including new manufacturing processes, and the emergence of new industry standards may render the Companyʼs products obsolete, less competitive or less marketable. The process of developing the Companyʼs products is complex and requires significant continuing costs, development efforts and third-party commitments. The Companyʼs failure to develop new methodologies and products and the obsolescence of existing methodologies could adversely affect the business, financial condition and operating results of the Company. The Company may be unable to anticipate changes in its potential customer requirements that could make the Companyʼs existing methodologies obsolete.

The development of the Companyʼs proprietary methodologies entails significant technical and business risks. The Company may not be successful in using its new methodologies or exploiting its niche markets effectively or adapting its businesses to evolving customer or medical requirements or preferences or emerging industry standards.

***The cannabis industry and market are relatively new, and this industry and market may not continue to exist or grow as expected.***

The Company is operating its business in a relatively new industry and market. While the Company has observed that the cannabis industry in any given market generally progresses through identifiable phases as that market evolves, competitive conditions, consumer preferences, patient requirements and spending patterns in this new industry and market are relatively unknown and may have unique circumstances that differ from existing industries and markets, particularly during the early phases of the cannabis industry being introduced into a particular market. Accordingly, there are no assurances that this industry and market will continue to exist or grow as currently estimated or anticipated, or function and evolve in a manner consistent with management's expectations and assumptions. Any event or circumstance that affects the cannabis industry and market could have a material adverse effect on the Companyʼs business, financial condition and results of operations.

The Companyʼs success in North America is dependent on the market building out direct to consumer channels including but not limited to retail outlets. There are many factors which could impact the Companyʼs ability to gain market share and distribute its products, including but not limited to the continued growth and expansion of retail outlets in the North American market which may have a material adverse effect on the Companyʼs business, operating results and financial condition. The Companyʼs ability to continue to grow, process, store and sell medical cannabis and participate in the adult-use cannabis markets is dependent on the maintenance and validity of the Companyʼs licenses from regulatory authorities.

***The Company may be affected by currency fluctuations.*** 

The Company may face exposure to currency fluctuations because of its present operations in the United States. Substantially all of the Company's revenue is earned in U.S. dollars, but its shares, and some of its employee stock options and certain

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warrants issued to holders of the Company's notes are denominated in Canadian dollars, which can provide variability for results of operations. The Company does not have currency hedging arrangements in place and there is no expectation that it will put any currency hedging arrangements in place in the future. Fluctuations in the exchange rate between the U.S. dollar and the Canadian dollar may have a material adverse effect on the Company's business, financial position or results of operations.

**Risks Related to the Company's Investment and Acquisition Business Strategies**

***The success of the Companyʼs business depends, in part, on its ability to successfully integrate recently acquired businesses and to retain key employees of acquired businesses and the Company's failure to do so may negatively affect the Companyʼs business.***

The Company may not be able to successfully integrate and combine the operations, personnel, and technology infrastructure of any acquired company with its existing operations. If integration is not managed successfully by the Companyʼs management, the Company may experience interruptions to its business activities, deterioration in its employee and customer relationships, increased costs of integration and harm to its reputation, all of which could have a material adverse effect on the Companyʼs business, financial condition, and results of operations. The Company may experience difficulties in combining corporate cultures, maintaining employee morale, and retaining key employees. The integration of any such acquired companies may also impose substantial demands on management. There is no assurance that these acquisitions will be successfully integrated in a timely manner, or at all.

***There can be no assurance that the Company's current and future strategic alliances will have a beneficial impact on the Company's business, financial condition, and results of operations.***

The Company currently has, and may in the future, enter into strategic alliances with third parties it believes will complement or augment its existing business. The Companyʼs ability to complete strategic alliances is dependent upon, and may be limited by, the availability of suitable candidates and capital. In addition, strategic alliances could present unforeseen integration obstacles or costs, may not enhance the Companyʼs business, and may involve risks that could adversely affect the Company, including significant amounts of management time that may be diverted from operations in order to pursue and complete such transactions or maintain such strategic alliances. Future strategic alliances could result in the incurrence of additional debt, costs and contingent liabilities, and there can be no assurance that future strategic alliances will achieve, or that the Companyʼs existing strategic alliances will continue to achieve, the expected benefits to the Companyʼs business or that the Company will be able to consummate future strategic alliances on satisfactory terms, or at all. Any of the foregoing could have a material adverse effect on the Companyʼs business, financial condition and results of operations.

**Risks Related to the Common Shares**

***The Company's voting control is concentrated.***

Mr. Jason Wild, Executive Chairman of the Company's Board, beneficially owns, directly or indirectly, or exercises control or direction over shares representing approximately 27% of the voting capital stock of the Company as of March 11, 2026. As a result, Mr. Wild exerts significant control over matters that may be put forward for the consideration of all of the Company shareholders, including for example, the approval of a potential business combination or consolidation, a liquidation or sale of all or substantially all of the Companyʼs assets, electing members to the Board, and adopting amendments to the Companyʼs constating documents, including its articles of incorporation, as amended (the "Articles") and by-laws.

***Additional issuances of the Company's securities may result in dilution.***

The Company may issue additional securities in the future, which may dilute a shareholder of the Company's holdings in the Company. The Companyʼs Articles permit the issuance of an unlimited number of proportionate voting shares in the capital of the Company ("Proportionate Voting Shares"), non-participating non-voting exchangeable shares in the capital of the Company ("Exchangeable Shares"), Preferred Shares and Common Shares, and shareholders of the Company will have no pre-emptive rights in connection with such further issuance. The Board has discretion to determine the price and the terms of issue of further issuances, and such terms could include rights, preferences and privileges superior to those existing holders. Moreover, additional Common Shares will be issued by the Company on the exercise of options under the Companyʼs stock option plan (the "Stock Option Plan"), upon the exercise of outstanding warrants, upon the due conversion of the Convertible Notes (as defined below) and upon the conversion of Proportionate Voting Shares, Exchangeable Shares and Preferred Shares. To the extent holders of the Company's stock options or other convertible securities convert or exercise their securities and sell the Common Shares they receive, the trading price of the Common Shares may decrease due to the additional amount of Common Shares available in the market. The Company cannot predict the size or nature of future issuances or the effect that future

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issuances and sales of Common Shares will have on the market price of the Common Shares. Issuances of a substantial number of additional Common Shares, or the perception that such issuances could occur, may adversely affect prevailing market prices for the Common Shares. With any additional issuance of Common Shares, investors will suffer dilution to their voting power and economic interest in the Company.

***Due to liquidity risks, sales of substantial amounts of Common Shares may have an adverse effect on the market price of the Common Shares.***

Sales of a substantial number of Common Shares in the public market could occur at any time. These sales, or the market perception that the holders of a large number of Common Shares intend to sell Common Shares, could reduce the market price or cause the market price of Common Shares to fall rapidly.

***An investor may face difficulty selling in the Common Shares.***

The Common Shares are listed on the TSX and the OTCQX, however, an investor may find it difficult to resell any securities of the Company. For example, given the heightened risk profile associated with cannabis in the United States, capital markets participants may be unwilling to assist with the settlement of trades for U.S. resident securityholders of companies with operations in the U.S. cannabis industry, which may prohibit or significantly impair the ability of securityholders in the United States to trade the Company's securities. In the event residents of the United States are unable to settle trades of the Company's securities, this may affect the pricing of such securities in the secondary market, the transparency and availability of trading prices and the liquidity of these securities.

***The price of the Common Shares may be volatile.***

The market price of the Common Shares may be subject to wide price fluctuations. For example, price fluctuations may be in response to many factors, including variations in the operating results of the Company and its subsidiaries, divergence in financial results from analysts' expectations, changes in earnings estimates by stock market analysts, changes in the business prospects for the Company and its subsidiaries, general economic conditions, legislative changes, community support for the cannabis industry and other events and factors outside of the Companyʼs control. In addition, stock markets as a whole have from time-to-time experienced extreme price and volume fluctuations, which, as well as general economic and political conditions, could adversely affect the market price for the Common Shares. Accordingly, there is no guarantee that the Common Shares will earn any positive return in the short term or long term.

***"Cannabis related business" rules or policies may restrict certain financial institutions from holding the Company's securities, which may make its securities less liquid.***

Certain financial institutions have implemented "cannabis related business" rules or policies that prohibit or restrict the trading in cannabis related securities. Trading in the Company securities may be prohibited by certain financial institutions and therefore the Company's securities may have limited liquidity. Holders of the Company securities may face limitations or be unable to deposit their securities with a brokerage institution.

***The Company's management will continue to have broad discretion over the use of the proceeds the Company receives in its public offerings, private placements, warrant exercises and loans, as applicable, and may not apply the proceeds in ways that increase the value of shareholders' investment.*** 

The Company's management will continue to have broad discretion to use the net proceeds from its public offerings, private placements warrant exercises and loans, as applicable, and shareholders will be relying on the judgment of the Company's management regarding the application of these proceeds. The Company's management might not apply the Company's net proceeds in ways that ultimately increase the value of shareholders' investment. Because of the number and variability of factors that will ultimately influence how the Company uses net proceeds from its public offerings and other financing transactions, the Company's use of proceeds may vary substantially from their currently intended use. If the Company does not invest or apply the net proceeds from its public offerings, private placements, warrant exercises and loans in ways that enhance shareholder value, it may fail to achieve the expected financial results, which could cause its share price to decline.

***The Company cannot guarantee that it will repurchase the maximum number of Common Shares pursuant to the Share Repurchase Program or that the Share Repurchase Program will enhance long-term shareholder value. Share repurchases could also increase the volatility of the trading price of the Common Shares and could diminish the Company's cash reserves.*** 

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On August 20, 2025, the Board approved a program to repurchase up to $10.0 million of Common Shares (the "Share Repurchase Program"), which replaced the Company's share repurchase program previously in place (the "Original Program"). The Company is not obligated to repurchase any specific dollar amount or acquire any specific number of Common Shares pursuant to the Share Repurchase Program. If management determines that it has a better use for its cash reserves, it is under no obligation to continue to purchase Common Shares and Common Share repurchases may be suspended or terminated at any time at the Company's discretion. The actual timing and number of Common Shares repurchased pursuant to the Share Repurchase Program remains subject to a variety of factors, including market conditions at the time and securities laws requirements, and other general business considerations. The Company's ability to repurchase Common Shares pursuant to the Share Repurchase Program will expire on August 21, 2026, and there is no guarantee that the Company will repurchase the maximum number of Common Shares pursuant to the Share Repurchase Program or that, if it does, such repurchases will enhance long-term shareholder value. The Company's failure to repurchase Common Shares after announcing the Share Repurchase Program may negatively impact the price of the Common Shares, the Company's reputation, and investor confidence in the Company.

Furthermore, the Company's implementation of the Share Repurchase Program could affect the trading price of the Common Shares, increase volatility, cause the price of the Common Share to be higher than it otherwise would be, or reduce the market liquidity for the Common Shares. Although the Share Repurchase Program is intended to enhance long-term shareholder value, there is no assurance that it will do so because the market price of the Common Shares may decline below the levels at which the Company repurchases Common Shares, and short-term price fluctuations could reduce the effectiveness of the Share Repurchase Program. Should the Company repurchase any Common Shares pursuant to the Share Repurchase Program, the amount of cash the Company has available to fund working capital, capital expenditures, strategic acquisitions or investments, other business opportunities, and other general corporate projects, as well as to invest in securities to generate returns on the Company's cash balance may decrease if not offset by other cash-generating initiatives. The Company also may fail to realize the anticipated long-term shareholder value of the Share Repurchase Program.

***The Preferred Shares have a liquidation preference over the Common Shares, which could limit the Company's ability to make distributions to the holders of Common Shares in certain circumstances.***

In the event of liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or upon any other return of capital or distribution of the assets of the Company among its shareholders, in each case for the purposes of winding up its affairs, the Preferred Shares are entitled to receive any distribution available to be paid out of the assets of the Company before the Proportionate Voting Shares, Common Shares and Exchangeable Shares. Accordingly, should the Company be liquidated, dissolved or wound-up, the Company may be unable to make any distribution to the holders of the Common Shares.

***Investors could be disqualified from owning a direct or indirect interest in the Company.***

An individual with an ownership interest in the Company could become disqualified from having such ownership interest in the Company under a U.S. state cannabis agency's interpretation of the relevant state laws and regulations if such owner is convicted of a certain type of felony or fails to meet the residency requirements, if any, for owning equity in a company like the Company The loss of such equity holder could potentially have a material adverse effect on the Company.

***The Company does not intend to pay dividends on the Common Shares for the foreseeable future and, consequently, investors' ability to achieve a return on their investment will depend on appreciation in the price of the Common Shares.***

The Company's policy is to retain earnings to finance the development and enhancement of its products and to otherwise reinvest in the Companyʼs businesses. Therefore, the Company does not anticipate paying cash dividends on Common Shares in the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of the Board and will depend on, among other things, financial results, cash requirements, contractual restrictions and other factors that the Board may deem relevant. As a result, investors may not receive any return on investment in Common Shares unless they sell them for a share price that is greater than that at which such investors purchased them.

***"Penny stock" rules may make buying or selling the Company's securities difficult, which may make its securities less liquid and make it harder for investors to buy and sell such securities.***

Trading in the Company's securities is subject to the SEC's "penny stock" rules and it is anticipated that trading in the Company's securities will continue to be subject to the penny stock rules for the foreseeable future. The SEC has adopted regulations that generally define a penny stock as any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. These rules require that any broker-dealer who recommends the Company's securities to persons other than prior customers and accredited investors must, prior to the sale, make a special written suitability determination for the purchaser and receive the purchaser's written agreement to execute the transaction. Unless an exception is available, the

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regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by these requirements may discourage broker-dealers from recommending transactions in the Company's securities, which could severely limit the liquidity of such securities and consequently adversely affect the market price for such securities.

**General Risk Factors**

***The Company may be subject to litigation, which could divert the attention of management and cause the Company to expend significant resources.***

The Company may become party to litigation from time to time in the ordinary course of business which could adversely affect its business. Should any litigation in which the Company becomes involved be determined against the Company, such a decision could adversely affect the Companyʼs ability to continue operating and the market price for Common Shares. Even if the Company is involved in litigation and wins, litigation can redirect significant resources.

***The Company's business could be adversely affected by economic downturns, fluctuating inflation, high interest rates, natural disasters, public health crises, political crises, geopolitical events, such as the war in Ukraine and the hostilities in the Middle East, policy changes, including tariffs, or other macroeconomic conditions, which have in the past and may in the future negatively impact the Company's business and financial performance.***

The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including, among other things, severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, supply chain shortages, fluctuating inflation rates and interest rates and uncertainty about economic stability. Increased inflation rates can adversely affect the Company by increasing the Company's costs, including labor and employee benefit costs. Higher interest rates, coupled with reduced government spending and volatility in financial markets may increase economic uncertainty and affect consumer spending. In addition, if the equity and credit markets deteriorate, including as a result of political unrest or war, such as the war in Ukraine and the hostilities in the Middle East, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, and more costly or more dilutive.

***The Company faces exposure to fraudulent or illegal activity by employees, contractors and consultants, which may subject the Company to investigations or other actions.***

The Company is exposed to the risk that its employees, independent contractors and consultants may engage in fraudulent or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to the Company that violates: (i) government regulations; (ii) manufacturing standards; (iii) federal, state and provincial healthcare fraud and abuse laws and regulations; or (iv) laws that require the true, complete and accurate reporting of financial information or data. It may not always be possible for the Company to identify and deter misconduct by its employees and other third parties, and the precautions taken by the Company to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting the Company from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against the Company, and it is not successful in defending itself or asserting its rights, those actions could have a significant impact on the Companyʼs business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of the Companyʼs operations, any of which could have a material adverse effect on the Companyʼs business, financial condition, results of operations or prospects.

***The Company faces risks and hazards that may not be covered by insurance.***

The Companyʼs business is subject to a number of risks and hazards generally, including adverse environmental conditions, accidents, disputes and changes in the regulatory environment. Such occurrences could result in damage to assets, personal injury or death, environmental damage, delays in operations, monetary losses and possible legal liability.

Although the Company maintains insurance to protect against certain risks in such amounts as it considers to be reasonable, its insurance does not cover all the potential risks associated with its operations. The Company may also be unable to maintain insurance to cover these risks at economically feasible premiums. Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Moreover, insurance against risks such as environmental pollution or other hazards encountered in the operations of the Company is not generally available on acceptable terms. Losses from these events

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may cause the Company to incur significant costs that could have a material adverse effect upon its financial performance and results of operations.

***The Company has incurred and will continue to incur substantial costs as a result of operating as a public company in Canada and the United States, and its management will continue to devote substantial time to public company compliance.*** 

The Common Shares are listed on the TSX under the ticker symbol "TSND." The Common Shares also trade over the counter in the United States on the OTCQX under the ticker symbol "TSNDF." As a public company, the Company incurs substantial legal, accounting, and other expenses that it would not incur as a private company. For example, the Company is subject to the reporting requirements of the Exchange Act, the applicable requirements of the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations of the SEC. The Exchange Act and Securities Act (Ontario) require, among other things, that the Company file annual, quarterly, and current reports with respect to its business, financial condition and results of operations. Compliance with these rules and regulations increase the Company's legal and financial compliance costs and increase demand on its systems, particularly after the Company is no longer an emerging growth company. In addition, as a result of disclosure information in filings required of a public company, the Company may be subject to shareholder activism, which can lead to additional substantial costs, distract management and impact the manner in which the Company operates its business in ways it cannot currently anticipate and the Company's business and financial condition are more visible, which may result in threatened or actual litigation, including by competitors.

***The Company is currently an "emerging growth company" within the meaning of the Securities Act, and to the extent the Company has taken advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make its securities less attractive to investors and may make it more difficult to compare the Company's performance with other public companies.*** 

The Company is an "emerging growth company" within the meaning of the Securities Act, as modified by the JOBS Act (as defined below), and the Company may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in the Company's periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a result, the Company's shareholders may not have access to certain information they may deem important. The Company could be an emerging growth company for up to five years, although circumstances could cause the Company to lose that status earlier, including if the market value of its Common Shares held by non-affiliates exceeds $700,000 as of the last business day of the Company's most recent second fiscal quarter or if the Company has annual gross revenue of over $1.235,000, in which case the Company would no longer be an emerging growth company as of the following fiscal year. The Company cannot predict whether investors will find its securities less attractive because it will rely on these exemptions. If some investors find the Company's securities less attractive as a result of its reliance on these exemptions, the trading prices of its securities may be lower than they otherwise would be, there may be a less active trading market for the securities and the trading prices of its securities may be more volatile.

Further, Section 102(b)(1) of the JOBS Act (as defined below) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act (as defined below) provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company's financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.

**Item 1B. Unresolved Staff Comments**

This Item 1B is not required for non-accelerated filers.

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**Item 1C. Cybersecurity**

***Risk management and strategy***

The Company has implemented and maintain various information security processes designed to identify, assess, and manage material risks from cybersecurity threats to its critical computer networks, third-party hosted services, communications systems, hardware and software, and its critical data, including intellectual property, confidential information that is proprietary, strategic or competitive in nature, and patient data ("Information Systems and Data").

The Company's cybersecurity function, led by its Chief Information Officer ("CIO"), with support from its Senior Director of Information Technology ("IT"), Enterprise Security Architect, security management personnel, engineering operations, and third-party service providers, helps identify, assess, and manage the Company's cybersecurity threats and risks. The Company's CIO has over twenty-five years of technology leadership experience including infrastructure design and management, software development, system implementation, cybersecurity, and network design administration. The Company's CIO also has experience in data protection for systems and has supported a complex global public enterprise environment with operations in over 200 countries. The Company's Senior Director of IT has over 11 years of experience developing and leading healthcare solutions and has led the development in web and infrastructure design, serverless architecture, database integrations, SMS, mass-email and mass phone notification solutions and holds a Sarbanes-Oxley Act (SOX) certification. The Company's Enterprise Security Architect has over seven years of experience in assessing risk and protecting data in various technologies from client/server software to cloud based solutions and holds a Certified Information Systems Security Professional designation, a GIAC Certified Incident Handler Certification, and Sarbanes-Oxley Act (SOX) certifications. The Company's Senior Director of IT and the Enterprise Security Architect also have experience dealing directly with numerous cyber security threats, breaches, detection and containment activities and strategies under strict requirements and expectations for HIPAA covered entities. The Company's cybersecurity function works, in certain circumstances, in partnership with its managed security service provider ("MSSP") and managed service provider ("MSP") to help identify, assess, and respond to risks from cybersecurity threats, including by monitoring and evaluating its threat environment using various methods including, for example: manual tools, automated tools, subscribing to reports and services that identify cybersecurity threats, analyzing reports of threats and actors, conducting scans of the threat environment, evaluating the Company's and its industry's risk profile, evaluating certain threats reported to us, coordinating with law enforcement concerning certain threats, conducting internal and/or external audits, conducting threat assessments for certain internal and external threats, third-party threat assessments, conducting vulnerability assessments to identify vulnerabilities, and use of external intelligence feeds. The Company's Security Incident Response Team leverages a cybersecurity managed detection and response partner, which monitors certain of its endpoints, cloud infrastructure, and networks for irregular activity.

Depending on the environment and system, the Company implements and maintains various technical, physical, and organizational measures, processes, standards, and policies designed to manage and mitigate material risks from cybersecurity threats to its Information Systems and Data, including, for example: an incident response plan, incident detection and response measures, monitoring and response services, network and system access controls, physical security measures, an employee cybersecurity training program, dedicated cybersecurity personnel, asset management and recovery processes, encryption of certain data, segregation of certain data, implementation of security standards/certifications, a vendor risk management program, penetration testing, dark web monitoring, monthly environment risk reviews, external threat intelligence reports, regular digital infrastructure scans, internally reported threats, data back-up measures, and cybersecurity insurance.

The Company's assessment and management of material risks from cybersecurity threats are integrated into the Company's overall risk management processes. For example, cybersecurity risk is identified in the Company's risk register detailing certain known and potential risk items; the Company's IT operations department works with its MSSP/MSP vendor partners to review certain identified threats and its cybersecurity practices in an effort to prioritize and mitigate cybersecurity threats that are more likely to lead to a material impact on its business; and its CIO regularly presents to senior management, the Board and Audit Committee to evaluate material risks relative to its overall business objectives.

The Company uses third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats including, for example, managed cybersecurity service providers, cybersecurity software providers, penetration testing firms, threat intelligence service providers, cybersecurity consultants, dark web monitoring services, forensic investigators, and professional services firms, including legal counsel.

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The Company uses third-party service providers to perform a variety of functions throughout its business, such as enterprise resource planning, point of sale, eCommerce, wholesale sales, application providers, and web hosting. The Company has a vendor management program to manage cybersecurity risks associated with its use of these providers. The Company's vendor management program includes completion of a cybersecurity questionnaire and review of the vendor's security program for certain vendors designed to help us evaluate the potential cybersecurity risks associated with its use of the vendor. Depending on the nature of the services provided, the sensitivity of the Information Systems and Data at issue, and the identity of the provider, its vendor management process may involve different levels of assessment designed to help identify cybersecurity risks associated with a provider and imposition of contractual obligations related to cybersecurity on the provider.

For a description of the risks from cybersecurity threats that may materially affect the Company and how they may do so, see the risk factors under *Item 1A. "Risk Factors"* in this Annual Report, including "The Company (and the third parties with whom it works) faces physical security risks, as well as risks related to its information technology systems, data, potential cyber or phishing-attacks, and security incidents."

***Governance*** 

The Board addresses the Company's cybersecurity risk management as part of its general oversight function. The Company's Audit Committee is responsible for overseeing the Company's cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats.

The Company's cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including the CIO and the Senior Director of IT. The CIO is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company's overall risk management strategy, and communicating key priorities to relevant personnel. The CIO is responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.

Our cybersecurity incident response and vulnerability management processes are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including the security management department, CIO, Chief Financial Officer ("CFO"), Chief Executive Officer ("CEO") and others. The security management department, CIO, CFO, CEO, and others work with the Company's incident response team to help the Company mitigate and remediate cybersecurity incidents of which they are notified. In addition, the Company's incident response and vulnerability management processes includes reporting to the Board for certain cybersecurity incidents.

The Board receives regular reports from the CIO concerning the Company's significant cybersecurity threats and risks and the processes the Company has implemented to address them. These reports also include materials related to certain cybersecurity trends the Company has identified, potential cybersecurity threats and risk, and proposed mitigation measures.

**Item 2. Properties**

TerrAscend's corporate headquarters is located in Union City, New Jersey and the Issuer's registered office is in Mississauga, Ontario, Canada. In addition, the Company has various other offices, manufacturing, cultivation and/or processing facilities and dispensaries across the United States. The Company believes that its current offices and facilities are suitable and adequate to meet its current needs. The Company intends to add new facilities or expand existing facilities as it adds employees, and it believes that suitable additional or substitute space will be available as needed to accommodate any such expansion of the Company's operations.

The following tables set forth the Company's material physical properties as of March 11, 2026.

---

| | | |
|:---|:---|:---|
| **Corporate Properties** | **Corporate Properties** | **Corporate Properties** |
| **Type** | **Location** | **Leased / Owned** |
| Office | Santa Rosa, CA | Leased\* |
| **Production and Storage Properties** | **Production and Storage Properties** | **Production and Storage Properties** |
| **Type** | **Location** | **Leased / Owned** |
| Cultivation, Processing | Ilera | Owned\* |

---

------

---

| | | |
|:---|:---|:---|
|  | Waterfall, PA |  |
| Cultivation, Processing | TerrAscend NJ LLC<br>Boonton, NJ | Owned\* |
| Cultivation | State Flower<br>San Francisco, CA | Leased\* |
| Cultivation, Processing | HMS Health<br>Hagerstown, MD | Owned\* |
| **Retail Properties** | **Retail Properties** | **Retail Properties** |
| **Type** | **Location** | **Leased / Owned** |
| Dispensary | Cookies<br>Toronto, ON Canada | Leased\* |
| Dispensary | The Apothecarium<br>Plymouth Meeting, PA | Leased\*  |
| Dispensary | The Apothecarium<br>Lancaster, PA | Leased\*  |
| Dispensary | The Apothecarium<br>Thorndale, PA | Leased\*  |
| Dispensary | The Apothecarium<br>Allentown, PA | Leased\*  |
| Dispensary | The Apothecarium<br>Bethlehem, PA | Leased\* |
| Dispensary | The Apothecarium<br>Stroudsburg, PA | Leased\*  |
| Dispensary | The Apothecarium<br>Phillipsburg, NJ | Owned\* |
| Dispensary | The Apothecarium<br>Maplewood, NJ | Leased\* |
| Dispensary | The Apothecarium<br>Lodi, NJ | Leased\*  |
| Dispensary | Union Chill<br>Lambertville, NJ | Leased† |
| Dispensary | Union Chill<br>Lambertville, NJ | Leased† |
| Dispensary | The Apothecarium<br>Cumberland, MD | Leased\* |
| Dispensary | The Apothecarium<br>Salisbury, MD | Leased\* |
| Dispensary | The Apothecarium<br>Nottingham, MD | Leased\* |
| Dispensary | The Apothecarium<br>Burtonsville, MD | Leased\* |

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------

---

| | | |
|:---|:---|:---|
| Dispensary | The Apothecarium – Castro<br>San Francisco, CA | Leased\* |
| Dispensary | The Apothecarium – Marina<br>San Francisco, CA | Leased\* |
| Dispensary | The Apothecarium – Soma<br>San Francisco, CA | Leased\* |
| Dispensary | The Apothecarium<br>Berkeley, CA | Leased\* |
| Dispensary | Ratio Cannabis<br>New Philadelphia, OH | Leased\* |
| **Miscellaneous Properties** | **Miscellaneous Properties** | **Miscellaneous Properties** |
| **Type** | **Location** | **Leased / Owned** |
| Cultivation, Processing | Monitor Facility<br>Monitor, MI | Owned |
| Cultivation, Processing | Monitor Facility<br>Monitor, MI | Owned |

---

\* Property or lease on the property is subject to an encumbrance as described below.

† Property is leased by Union Chill Cannabis Company LLC ("Union Chill"), a New Jersey limited liability company in which subsequent to the year ended December 31, 2025, the Company exercised the option to hold a 35% ownership interest.

 Subleased and not utilized in the Company's operations

**Properties Subject to an Encumbrance**

<u>FocusGrowth Term Loan</u>

The Company, pursuant to a senior secured term loan with an aggregate principal amount of $222.1 million, entered into on August 1, 2024, and amended pursuant to a joinder agreement dated September 30, 2024 and July 8, 2025 (the "FG Loan"), by and between the Company, as guarantors, and each of the Borrowers (as defined below) and Incremental Amendment Borrowers (as defined below), and FG Agency Lending LLC, as the Administrative Agent, has pledged substantially all of the assets of the Borrowers (as defined below) and Incremental Amendment Borrowers (as defined below) as collateral to secure its obligations.

See the section titled "*Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations—Debt Facilities*" of this Annual Report for more information regarding the Company's indebtedness.

**Item 3. Legal Proceedings**

**Legal Proceedings**

In the ordinary course of business, the Company is involved in a number of lawsuits incidental to its business, including litigation related to intellectual property, product liability, employment, and commercial matters. Although it is difficult to predict the ultimate outcome of these matters, management believes that any ultimate liability would not have a material adverse effect on the Company's Consolidated Balance Sheets or results of operations. For additional information regarding legal proceedings, if any, see Note 24, "Commitments and contingencies" to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. We believe there are currently no pending lawsuits that could reasonably be expected to have a material effect on the results of the Company's consolidated financial statements.

**Item 4. Mine Safety Disclosures**

Not applicable.

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**PART II**

**Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities**

**Market Information**

The Common Shares were traded on the CSE, under the ticker symbol "TER," from May 3, 2017 until July 4, 2023, when the Common Shares commenced trading on the TSX under the ticker symbol "TSND". On October 22, 2018, the Common Shares began trading on the OTCQX under the ticker symbol "TRSSF," which was changed to "TSNDF" effective July 6, 2023. Any over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

**Shareholders**

The Company had 470 shareholders of record as of March 11, 2026. This does not include shares held in the name of a broker, bank or other nominees (typically referred to as being held in "street name").

**Dividends**

The Company has not declared any dividends or made any distributions. Furthermore, the Company has no current intention to declare dividends on the Common Shares in the foreseeable future. Any decision to pay dividends on the Common Shares in the future will be at the discretion of the Board and will depend on, among other things, the Company's results of operations, current and anticipated cash requirements and surplus, financial condition, any future contractual restrictions and financing agreement covenants, solvency tests imposed by corporate law and other factors that the Board may deem relevant.

**Stock Performance Graph**

The following shall not be deemed incorporated by reference into any of the Company's other filings under the Exchange Act, except to the extent the Company specifically incorporates it by reference into such filings.

The following compares the cumulative total return for an investment of $100 in the Common Shares, Russell 2000 Index and a selected peer group of companies for the five years ended December 31, 2025. The comparison assumes all dividends have been reinvested (if any). Effective July 4, 2023, the Company commenced trading its Common Shares on the TSX, under the ticker symbol "TSND".

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The comparisons in this graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of the Common Shares.

![img86684783_0.gif](img86684783_0.gif)

The following specific companies were included in the peer group:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Green Thumb Industries Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Curaleaf Holdings, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Trulieve Cannabis Corp.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Cresco Labs Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Verano Holdings Corp.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Jushi Holdings Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•AYR Wellness Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Ascend Wellness Holdings, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The Cannabist Company Holdings Inc.

**Recent Unregistered Sales of Equity Securities**

There were no unregistered sales of equity securities during the year ended December 31, 2025, except as otherwise previously reported in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.

**Securities Authorized for Issuance Under Equity Compensation Plans**

Information regarding our equity compensation plans and the securities authorized for issuance thereunder is set forth in Part III, Item 12 of this Annual Report.

**Use of Proceeds from Initial Public Offering of Common Shares**

Not applicable.

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**Purchase of Equity Securities by the Issuer and Affiliated Purchasers**

*Unless otherwise noted, dollar amounts in this section are in thousands of U.S. dollars, except per share amounts.*

On August 20, 2025, the Board authorized the Company to commence the Share Repurchase Program, which replaced the Company's Original Program. The Share Repurchase Program authorizes the Company to repurchase up to 60,255 Common Shares daily, which represents 25% of the Company's average daily trading volume on the TSX of 241,023 Common Shares. Any repurchases under the program may be made by means of open market transactions, negotiated block transactions, or otherwise, including pursuant to a repurchase plan administered in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended. The size and timing of any repurchases will depend on price, market and business conditions, and other factors. Common Shares may be purchased on the TSX, the OTCQX, or alternative trading systems and are subject to the limitations and rules imposed by U.S. and Canadian securities regulations. The actual number of Common Shares purchased, timing of purchases and share price depend upon market conditions at the time and securities law requirements. Any Common Shares acquired pursuant to the Share Repurchase Program will be returned to treasury and cancelled. Shareholders may obtain a copy of the Form 12 – Notice of Intention to make a Normal Course Issuer Bid filed by the Company with the TSX, without charge, by contacting the Company. During the fourth quarter of 2025, the Company repurchased Common Shares as set forth below:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **Total Number of Common Shares Purchased** | **Weighted Average Price Paid per Common Share** | **Total Number of Common Shares as Part of a Publicly Announced Program** | **Number of Common Shares that may yet be Purchased under the Program** |
| October 1 through October 31, 2025 |  | $— |  | 10000000 |
| November 1 through November 30, 2025 | 55000 | $0.44 | 55000 | 9945000 |
| December 1 through December 31, 2025 | 20000 | $0.46 | 20000 | 9925000 |
| For the Quarter Ended December 31, 2025 | 75000 | $0.44 | 75000 | 9925000 |

---

**Item 6. [Reserved]**

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**Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations**

*The following discussion and analysis of the financial condition and results of operations of TerrAscend Corp., its subsidiaries, including TerrAscend Growth Corp. and its subsidiaries should be read in conjunction with the Company's audited consolidated financial statements as of December 31, 2025 and December 31, 2024 and for the years ended December 31, 2025, December 31, 2024, and December 31, 2023 (the "Consolidated Financial Statements") appearing elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to the Company's plans and strategy for its business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth under "Risk Factors" appearing elsewhere in this Annual Report, the Company's actual results could differ materially from the results described in or implied by the forward-looking information contained in this Annual Report and in the following discussion and analysis.* 

*Unless otherwise noted, dollar amounts in this Item 7 are in thousands of U.S. dollars, except per share information.* 

**<u>Overview</u>**

The Company is a leading North American cannabis company. The Company has vertically-integrated licensed operations in Pennsylvania, New Jersey, Maryland and California. In addition, the Company has retail operations in Ohio and Ontario, Canada with a majority-owned dispensary in Toronto, Ontario, Canada. Notwithstanding the fact that various states in the U.S. have implemented medical marijuana laws or have otherwise legalized the use of cannabis, the use of cannabis remains illegal under U.S. federal law for any purpose, by way of the Controlled Substances Act.

The Company operates under one reportable segment, which is the cultivation, production and sale of cannabis products.

The Company owns a portfolio of operating businesses, including:

• TerrAscend NJ, a majority-owned operation with four dispensaries, and a cultivation/processing facility;

• TerrAscend MD, a wholly-owned operation with four dispensaries, and a cultivation/processing facility;

• TerrAscend PA, a wholly-owned operation with six dispensaries, and a cultivation/processing facility;

• TerrAscend CA, a wholly-owned operation with four dispensaries, and a cultivation facility;

• TerrAscend OH, a cannabis retailer in New Philadelphia, Ohio with one wholly-owned dispensary; and;

• TerrAscend Canada, a cannabis retailer in Ontario, Canada with a majority-owned dispensary in Toronto, Ontario, Canada.

**<u>Recent Developments</u>**

• On December 26, 2025, the Company closed on the transaction with Union Chill, for an option to purchase 35% of Union Chill ("Union Chill Option") for total consideration of $13,000 consisting of $9,000 in the form of convertible notes to the various sellers of Union Chill bearing interest at 6.5% per annum, payable quarterly and $4,000 in cash upon the exercise of the Union Chill Option (the "Union Chill Transaction"). The Union Chill Transaction conforms to New Jersey's regulatory framework, which facilitates investment opportunities for diversely owned businesses.

• On November 1, 2025 one of the Company's owned properties included in the Michigan disposal group was subsequently leased to a third party under a lease agreement.

• On August 20, 2025, the Board approved the Share Repurchase Program, which replaces the Company's Original Program. The Share Repurchase Program authorizes the Company to repurchase up to 10,000,000 Common Shares at any time, or from time to time, from August 22, 2025 until August 21, 2026.

• On July 18, 2025, Keith Stauffer's resignation as the Company's Chief Financial Officer became effective.

• On July 15, 2025, the Company drew $3,105 of the Uncommitted Term Loan Facility (as defined below).

• On July 8, 2025, TerrAscend, TerrAscend USA, Inc., TerrAscend NJ LLC, TER Holding MD, Inc., and WDB Holding MD, Inc., including certain of each of their respective subsidiaries, and other borrowers, all of which are entities that are consolidated in the financial statements of the Company (collectively, the "Incremental Amendment Borrowers"), became parties to the FG Loan as borrowers pursuant to a joinder and an amendment to the FG Loan (the "FG Loan Amendment"),

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which provides for a $79,000 upsize to the existing FG Loan. The FG Loan bears interest at 12.75% per annum and matures on August 1, 2028. The Company drew down in full the $79,000 available under the FG Loan Amendment on July 8, 2025, $64,489 of which was used to retire the single-draw senior secured term loan drawn pursuant to a loan agreement from October 2022 among certain subsidiaries of TerrAscend and Pelorus Fund REIT, LLC (the "Pelorus Term Loan"), and certain other indebtedness of the Company, in addition to being used for future growth initiatives. As a result, the outstanding obligation under the Pelorus Term Loan and certain other indebtedness of the Company were repaid in full and subsequently terminated. In addition, the FG Loan Amendment provides for an uncommitted term loan facility of up to $35,000 (the "Uncommitted Term Loan Facility"), of which the Company drew $3,105 as of December 31, 2025. As of December 31, 2025, there was an outstanding principal amount of $217,682 under the FG Loan. Certain funds controlled by the Company's Executive Chairman, Jason Wild, a related party of the Company, invested approximately $1,600 of the loan under the FG Loan Amendment.

• On June 27, 2025, the Company received approval from the Board, together with TerrAscend Corp.'s consolidated entities, and is currently engaged in an active program to sell the assets of TerrAscend Michigan ("TerrAscend MI"), which is expected to be substantially completed in the first half of 2026. As part of the exit plan, the Company intends to sell all of the Company's Michigan assets, including four cultivation and processing facilities, twenty retail dispensaries, and other assets. TerrAscend MI is presented as discontinued operations and has been excluded from continuing operations for all periods presented. See Note 7, "Discontinued Operations", in the audited consolidated financial statements included elsewhere in this Annual Report.

• On May 6, 2025, the Company completed the acquisition of certain assets of Ratio Cannabis LLC ("Ratio Cannabis"), a dispensary in Ohio (the "Ratio Acquisition"). Under the terms of the purchase agreements entered into in connection with the acquisition, each dated as of March 14, 2025, the Company acquired certain assets of Ratio Cannabis for total consideration of $10,300, which was comprised of $5,000 in cash, 4,570,637 Common Shares and a promissory note with a principal amount of $3,980 bearing 6% interest with a two-year maturity (the "Ratio Promissory Note"). The number of Common Shares issued as part of the consideration was calculated based on a price per Common Share equal to $0.29, being the twenty (20)-day volume-weighted average price of the Common Shares on the OTCQX for the period ending on May 5, 2025, resulting in the issuance of 4,570,637 Common Shares on May 6, 2025.

**<u>Subsequent Transactions</u>**

• Subsequent to the fiscal year ended December 31, 2025, the Union Chill Option, as a part of the Union Chill Transaction, was exercised and the Company paid the remaining cash consideration of $4,000 to Union Chill, at which time the Company acquired a 35% interest in Union Chill.

**<u>Components of Results of Operations</u>**

The following discussion sets forth certain components of the Company's Consolidated Statements of Comprehensive Income (Loss) as well as factors that impact those items.

***Revenue, net***

The Company generates revenue from the sale of cannabis products, brands, and services to the United States and Canadian markets. Revenues consist of wholesale and retail sales in the legal medical and adult-use market across Canada and in several U.S. states where cannabis has been legalized for medical or adult-use cannabis.

***Cost of sales***

Cost of sales primarily consists of expenses related to providing cannabis products and services to the Company's customers, including personnel-related expenses, the depreciation of property and equipment, amortization of acquired intangible assets, certain royalties, and other overhead costs.

***Operating Expenses***

<u>General and administrative</u>

General and administrative ("G&A") expenses consist primarily of personnel costs related to finance, human resources, legal, certain royalties, and other administrative functions. Additionally, G&A expenses include professional fees to third parties, as well as marketing expenses. Moreover, G&A expenses include share-based compensation on options, restricted share units and warrants.

------

<u>Amortization and depreciation</u>

Amortization and depreciation includes the amortization of intangible assets. Amortization is calculated on a straight-line basis over the following terms:

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| | |
|:---|:---|
| Brand intangibles - indefinite lives | Indefinite useful lives |
| Software | 5 years |
| Licenses | 15-30 years |

---

Depreciation of property and equipment is calculated on a straight-line basis over the estimated useful life of the asset using the following terms:

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| | |
|:---|:---|
| Buildings and improvements | 15-30 years |
| Land | Not depreciated |
| Machinery & equipment | 5-15 years |
| Office furniture & production equipment | 3-5 years |
| Right of use assets | Lease term |
| Assets in process | Not depreciated |

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<u>Impairment of intangible assets and goodwill</u>

Goodwill and indefinite lived intangible assets are reviewed for impairment annually and whenever there are events or changes in circumstances that indicate that the carrying amount has been impaired. The Company first performs a qualitative assessment. If based on the results of a qualitative assessment it has been determined that it is more likely than not that the carrying value of a reporting unit exceeds its fair value, an additional quantitative impairment test is performed which compares the carrying value of the reporting unit to its estimated fair value. If the carrying value exceeds the estimated fair value, an impairment is recorded.

The Company evaluates the recoverability of definite lived assets based on whether events or changes in circumstances indicate that the carrying value of the asset, or asset group, may not be recoverable. The assets, or asset group, are assessed for impairment based on the estimate of future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the undiscounted cash flows are less than the carrying value, the Company measures the fair value of the asset group. If the carrying value of an asset group exceeds its fair value, an impairment loss is recorded for the excess of the asset group's carrying value over its estimated fair value.

<u>Impairment of property and equipment</u>

The Company evaluates the recoverability of property and equipment based on whether events or changes in circumstances indicate that the carrying value of the asset, or asset group, may not be recoverable. The assets, or asset group, are assessed for impairment based on the estimate of future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the undiscounted cash flows are less than the carrying value, the Company measures the fair value of the asset group. In certain circumstances, an appraisal was obtained to determine the fair value of certain long-lived assets. If the carrying value of an asset group exceeds its fair value, an impairment loss is recorded for the excess of the asset group's carrying value over its estimated fair value.

***Other operating expense (income)***

Other operating income primarily represents (gains) losses on lease terminations and (gains) losses on disposal of fixed assets.

***(Gain) loss from revaluation of contingent consideration***

As a result of some of its acquisitions, the Company recognizes a contingent consideration payable, which is an obligation to transfer additional assets to the seller if future events occur. The liability is revalued at the end of each reporting period to determine its fair value. A gain or loss is recognized as a result of the revaluation.

***Loss (gain) on fair value of derivative liabilities***

Derivative liabilities consist of convertible options, that contains embedded derivative features, that are remeasured to fair value at the end of each reporting period using the Black-Scholes Option Pricing Model (the "Black-Scholes Model"). A gain or loss is recognized as a result of the revaluation.

------

***Finance and other expenses***

Finance and other expenses consist primarily of interest and accretion expense on the Company's outstanding debt obligations.

***Transaction and restructuring costs***

Transaction costs include costs incurred in connection with the Company's acquisitions, such as expenses related to professional fees, consulting, legal and accounting. Restructuring costs are those costs associated with severance and restructuring of business units.

***Unrealized and realized foreign exchange (gain) loss***

Unrealized and realized foreign exchange (gain) loss represents the loss recognized on the remeasurement of U.S. dollar ("USD") denominated cash and other assets recorded in the Canadian dollars ("CAD") functional currency at the Company's Canadian operations.

***Unrealized and realized loss on investments***

The Company accounts for its investment in equity securities without readily determinable fair values using a valuation technique which maximizes the use of relevant observable inputs, with subsequent holding changes in fair value recognized in unrealized gain or loss on investments in the Consolidated Statements of Operations and Comprehensive Loss.

***Loss on extinguishment of debt***

Loss on extinguishment of debt represents the Company's debt that was retired prior to its scheduled maturity at a different amount than the book value and the amount paid.

***Provision for income taxes***

Provision for income taxes consists of U.S. federal and state income taxes in certain jurisdictions in which the Company conducts business.

**<u>Results from Operations - Years ended December 31, 2025, December 31, 2024, and December 31, 2023</u>**

*Unless otherwise noted, dollar amounts in this section are in thousands of U.S. dollars.*

<u>Continuing Operations</u>

The following tables represent the Company's results from operations for the years ended December 31, 2025, December 31, 2024, and December 31, 2023:

***Revenue, net***

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| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| **Revenue, net** | $**260558** | $**268078** | $**250509** |
| $ change | $(7520) | $17569 |  |
| % change | -3% | 7% |  |

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Revenue decreased by $7,520 from $268,078 to $260,558 during the year ended December 31, 2025 as compared to the year ended December 31, 2024. The decrease was primarily due to a $9,104 decrease in wholesale revenue offset by a $1,584 increase in retail revenue.

The $9,104 decrease in wholesale revenue for the year ended December 31, 2025 compared to the year ended December 31, 2024, was primarily driven by increased competition and price compression which resulted in lower average selling prices.

The $1,584 increase in retail revenue for the year ended December 31, 2025 compared to the year ended December 31, 2024, was primarily driven by acquisitive growth in Ohio.

Revenue increased by $17,569, or 7% from $250,509 to $268,078 during the year ended December 31, 2024 as compared to the year ended December 31, 2023. The increase was primarily due to a $24,665 increase in wholesale revenue offset by a $7,096 decline in retail revenue.

The $24,665 increase in wholesale revenue for the year ended December 31, 2024 compared to the year ended December 31, 2023, was primarily driven by acquisitive growth in Maryland and greater wholesale demand across other markets.

The $7,096 decrease in retail revenue for the year ended December 31, 2024 compared to the year ended December 31, 2023, was primarily driven by increased competition and price compression which was partially offset by acquisitive growth in Maryland.

***Cost of sales***

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| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| **Total cost of sales** | $**124234** | $**132211** | $**112492** |
| $ change | $(7977) | $19719 |  |
| % change | -6% | 18% |  |
| Cost of sales as a % of revenue | 48% | 49% | 45% |

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The decrease of $7,977, in cost of sales for the year ended December 31, 2025 as compared to the year ended December 31, 2024 was mainly due to a decrease in sales volume. Cost of sales as a percentage of revenue decreased by 1% due to reduced unit costs and improved cost absorption.

The increase of $19,719, in cost of sales for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was mainly due to an increase in sales volume along with higher input costs that reduced gross profit margins.

***General and administrative expense***

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| General and administrative expense | $86240 | $90624 | $83543 |
| $ change | $(4384) | $7081 |  |
| % change | -5% | 8% |  |

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The decrease of $4,384 in G&A expenses for the year ended December 31, 2025 as compared to the year ended December 31, 2024 was primarily related to a reduction in share-based compensation due to lower grant-date fair values of awards issued in the 2025 and the expiration and full vesting of awards granted in prior years that had higher grant-date fair values. The decrease was also driven by a reduction of professional fees. This was partially offset by an increase in the Company's provision for expected losses and salaries and wages.

The increase of $7,081 in G&A expenses for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily driven by an increase in salaries and wages as well as an increase in stock-based compensation due to a modification of stock option terms extending the expiration period from five years to ten years.

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***Impairment of intangible assets***

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| Impairment of intangible assets | $2606 | $— | $15518 |
| $ change | $2606 | $(15518) |  |
| % change | 100% | -100% |  |

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During the year ended December 31, 2025, the Company recognized impairment charges of $2,606 related to the wholesale brand name and license in California. The impairment was primarily driven by declining wholesale revenue expectations in California as a result of increased competition that was not reasonably foreseeable based on available data and trends at the time.

There were no impairment of intangible assets recognized during the year ended December 31, 2024.

During the year ended December 31, 2023, the Company performed an impairment analysis over its definite lived retail licenses in California and determined that its carrying value was greater than its fair value, and therefore, recorded impairment of $15,518.

***Impairment of goodwill***

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| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| Impairment of goodwill | $— | $— | $4690 |
| $ change | $— | $(4690) |  |
| % change | 0% | -100% |  |

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There was no impairment of goodwill recognized during the years ended December 31, 2025 and December 31, 2024.

During the year ended December 31, 2023, it was determined during the annual impairment analysis that it was more likely than not that the California reporting unit's fair value was less than its carrying value. As a result of this quantitative test, the Company recorded impairment of goodwill of $4,690, reducing the carrying value of goodwill within the California reporting unit to $nil.

***Impairment of property and equipment, and right of use assets***

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| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| Impairment of property and equipment and right of use assets | $— | $2438 | $28 |
| $ change | $(2438) | $2410 |  |
| % change | -100% | 8607% |  |

---

There were no impairment of property and equipment and right of use assets recognized during the year ended December 31, 2025.

During the year ended December 31, 2024, the Company recognized impairment of $2,438 due to the closure of one of its California retail stores.

------

***Other operating expense (income)***

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| Other operating expense (income) | $33 | $(1190) | $(1255) |
| $ change | $1223 | $65 |  |
| % change | -103% | -5% |  |

---

During the year ended December 31, 2025, the Company terminated one of its corporate office leases, resulting in a gain on lease termination of $99, offset by a loss on disposals of fixed assets of $127.

During the year ended December 31, 2024, the Company transferred a California lease to a third party, resulting in a lease termination and a recognized gain of $1,169.

During the year ended December 31, 2023, the Company entered into a lease termination agreement in Florida. As a result of the lease termination, the Company recorded a gain on lease termination of $1,217.

***(Gain) loss from revaluation of contingent consideration***

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| (Gain) loss from revaluation of contingent consideration | $(1004) | $2465 | $(645) |
| $ change | $(3469) | $3110 |  |
| % change | -141% | -482% |  |

---

During the year ended December 31, 2025, the Company recognized a gain of $1,004 related to the remeasurement of its contingent consideration. The gain resulted from the Company's issuance of Common Shares, following the triggering of price protection provisions included in certain of the Company's acquisition agreements. This issuance resulted in a reduction in the stock price that would trigger further price protection issuances, which significantly reduced the probability that additional Common Shares would be issued under the price protection provisions. As a result, the estimated fair value of the contingent consideration liability was reduced to $nil subsequent to the issuance.

During the year ended December 31, 2024, the Company recognized a loss from revaluation of contingent consideration of $2,466, an increase in loss of $3,111 for the year ended December 31, 2024, compared to the year ended December 31, 2023. The increase in loss was primarily driven by a decrease in TerrAscend's share price, partially offset by the expiration in December 2024 of the contingent consideration in connection with the Peninsula Acquisition on June 28, 2023.

For the year ended December 31, 2023, the Company recognized a gain of $645 due to a reduction in the contingent liability in connection with the Peninsula Acquisition, which resulted from the increase in the price of the Common Shares from the grant date.

***Loss on extinguishment of debt*** 

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| Loss on extinguishment of debt | $1432 | $2096 | $— |
| $ change | $(664) | $2096 |  |
| % change | -32% | 100% |  |

---

During the years ended December 31, 2025 and 2024, the Company recognized a loss on extinguishment of debt due to the retirement of certain loans in relation to the upsize of the FG Loan, which included the write-off of deferred financing costs.

------

***Loss (gain) on fair value of derivative liabilities***

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| Loss (gain) on fair value of derivative liabilities | $535 | $(4549) | $(1181) |
| $ change | $5084 | $(3368) |  |
| % change | -112% | 285% |  |

---

For the year ended December 31, 2025, the Company recognized a loss on the fair value of derivative liabilities of $535, primarily due to an increase in the price of the Company's Common Shares during the year, which resulted in a higher fair value of the derivative instruments and a corresponding increase in the liability.

For the year ended December 31, 2024, the Company recognized a gain of $4,549 related to the remeasurement of derivative liabilities, primarily driven by a decline in the price of the Company's Common Shares during the year, which reduced the fair value of the derivative instruments.

For the year ended December 31, 2023, the Company recognized a gain of $1,181 from the remeasurement of derivative liabilities, primarily due to a decline in the price of the Company's Common Shares during the remeasurement period.

***Finance and other expenses***

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| Finance and other expenses | $35403 | $33488 | $32853 |
| $ change | $1915 | $635 |  |
| % change | 6% | 2% |  |

---

The increase in finance and other expenses for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily driven by additional interest and accretion related to the upsize to the existing FG Loan in 2025.

The increase in finance and other expenses for the year ended December 31, 2024, compared to the year ended December 31, 2023, was primarily driven by increased accretion related to the refinancing debt and the repayment of certain other debt during 2024.

***Provision for income taxes***

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| Provision for income taxes | $29466 | $25134 | $23386 |
| $ change | $4332 | $1748 |  |
| % change | 17% | 7% |  |

---

The increase in provision for income taxes for the year ended December 31, 2025 as compared to December 31, 2024 was primarily driven by accrued interest and penalties. This increase was partially offset by the reduction of uncertain tax liabilities from prior years.

The increase in provision for income taxes of $1,748 for the year ended December 31, 2024, compared to December 31, 2023, was primarily due to primarily driven by accrued interest and penalties. This increase was offset by deferred tax benefits related to certain intangible assets recorded in 2023.

------

<u>Discontinued Operations</u>

***Discontinued Operations***

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| Loss from discontinued operations, net of tax | $(56842) | $(51779) | $(59103) |
| $ change | $(5063) | $7324 |  |
| % change | 10% | -12% |  |

---

During the year ended December 31, 2025, the loss on discontinued operations of $56,842 was primarily driven by an impairment of property and equipment of $41,271, attributable to the Company's expedited sales strategy in Michigan, constructions in process that will no longer be completed, and the continued increase of competition in the Michigan market and continued market saturation and price compression in Michigan which negatively impacted gross margins. The loss was also impacted by the termination of certain leases and inventory write-offs.

During the year ended December 31, 2024, the loss on discontinued operations of $51,779 was primarily driven by impairment of intangible assets of $39,334 and impairment of property and equipment of $6,073 attributable to declining revenue in Michigan as a result of increased competition.

During the year ended December 31, 2023 the loss on discontinued operations of $59,103 was primarily driven by impairment of intangible assets of $35,785 and impairment of property and equipment of $4,769 attributable to increased competition.

**<u>Liquidity and Capital Resources</u>**

*Unless otherwise noted, dollar amounts in this section are in thousands of U.S. dollars, except dollar amounts per security.*

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| Cash and cash equivalents | $37414 | $26381 |
| Restricted Cash | 110 | 606 |
| Current assets | 110108 | 176887 |
| Non-current assets | 447271 | 430344 |
| Current liabilities | 79931 | 91049 |
| Non-current liabilities | 378427 | 339366 |
| Working capital | 30177 | 85838 |
| Total shareholders' equity | $99021 | $176816 |

---

The calculation of working capital provides additional information and is not defined under GAAP. The Company defines working capital as current assets less current liabilities. This measure should not be considered in isolation or as a substitute for any standardized measure under GAAP.

Management assesses the Company's liquidity in terms of its ability to generate cash to fund its operating, investing, and financing activities. The Company remains in a strong financial position, with resources available for reinvesting in existing businesses, conducting acquisitions, and managing its capital structure on a short and long-term basis. The Company believes its existing cash balances will be sufficient to meet its anticipated cash requirements from the date of this Annual Report through at least the next 12 months.

Since its inception, the Company's primary sources of capital have been through the issuance of equity securities or debt facilities, and the Company has received aggregate net proceeds from such transactions totaling $861,332 as of December 31, 2025.

The Company expects to fund any additional future requirements through the following sources of capital:

• cash from ongoing operations.

• private placements and public offerings of equity or debt securities.

------

• additional debt from additional creditors.

• sale of real property.

• sale leaseback transactions.

• exercise of options and warrants.

As of December 31, 2025, the Company had $225,452 in principal outstanding under its loans payable, excluding any prepayment or exit fees, of which $5,469 is due in the next twelve months. The Company also had $19,355 in principal outstanding under its convertible debt, of which $10,355 is due within the next twelve months. In addition, accrued interest in the aggregate amount of $2,171 related to the Company's convertible debt is due in the next twelve months.

The Company has entered into leases for certain premises and offices for which it owes monthly lease payments. The Company has $59,441 in lease obligations. Of this amount, $4,360 of lease payments are due in the next twelve months.

As of December 31, 2025, the Company had accounts payable and accrued liabilities of $39,807 and corporate income taxes payable of $5,360.

The Company intends to meet its capital commitments through any or all of the sources of capital noted above. The Company's objective with respect to its capital management is to ensure it has sufficient cash resources to maintain its ongoing operations and finance future obligations.

The Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the Company's results of operations or financial condition, including and without limitation, such consideration as liquidity and capital resources.

The Company is subject to a financial covenant as a result of its loan payable with its primary lender. The Company was in compliance with its debt covenant as of December 31, 2025. In the event that, in future periods, the Company's financial results are below levels required to maintain compliance with it covenant, the Company will assess and undertake appropriate corrective initiatives with a view to allowing it to continue to comply with its covenant. Other than the covenant related to loans payable, the Company is not subject to externally imposed capital requirements.

**<u>Debt Facilities</u>**

---

| | | |
|:---|:---|:---|
|  | **Principal Paid during the Years Ended December 31, 2025** | **Principal Outstanding as of December 31, 2025** |
|  | **(In thousands)** | **(In thousands)** |
| FocusGrowth Term Loan | $4423 | $217682 |
| Pelorus Term Loan | 45478 |  |
| Maryland Acquisition Loans | 15180 | 2758 |
| FG Bridge Loan | 5208 |  |
| Ratio Promissory Note |  | 3980 |
| Other Loans | 201 | 1032 |
| Private Placement Convertible Debentures |  | 10355 |
| Union Chill Convertible Promissory Note |  | 9000 |
| &nbsp;&nbsp;Total | $**70490** | $**244807** |

---

*Loan Facilities*

<u>FocusGrowth Term Loan</u>

On August 1, 2024, the Issuer and TerrAscend USA, Inc., as guarantors, and each of WDB Holding CA, Inc., WDB Holding PA, Inc., Moose Curve Holdings, LLC, Hempaid, LLC and, pursuant to a joinder agreement dated September 30, 2024, WDB Holding MI, Inc., including certain of each of their respective subsidiaries, as borrowers (collectively, the "Borrowers"), and FG Agency Lending LLC, as the Administrative Agent entered into a Loan Agreement (the "FG Loan") for a four-year, $140,000 senior-secured term loan. Net proceeds of the FG Loan were received in an amount equal to 95% of the $140,000.

The FG Loan bears interest at 12.75% per annum and matures on August 1, 2028 (the "FG Loan Maturity Date"). The FG Loan

------

is guaranteed by the Issuer and TerrAscend USA, Inc. and is secured by substantially all of the assets of the Borrowers. Depending on the timing of repayment, an exit fee of between 2.0% and 4.0% of the outstanding principal balance of the FG Loan will be due upon either prepayment, in part or in full, of the FG Loan or the FG Loan Maturity Date.

The FG Loan includes negative covenants that are usual for facilities and transactions of this type. The FG Loan contains covenants that limit the borrowers' ability to, among other things: (i) incur additional indebtedness or guarantee indebtedness; (ii) create liens; (iii) pay dividends; (iv) make investments; (v) enter into transactions with affiliates; and (vi) consolidate, merge, sell or otherwise dispose of all or substantially all of their respective assets. The FG Loan also includes a minimum liquidity covenant with respect to the borrowers. If an event of default occurs and is not cured within an applicable grace period or waived, the principal amount, any accrued interest and any other obligations outstanding under the FG Loan may become immediately due and payable.

On July 8, 2025, the Incremental Amendment Borrowers became parties to the FG Loan as borrowers pursuant to the FG Loan Amendment, which provided for an additional $79,000 upsize to the existing FG Loan. The Company drew down in full the $79,000 available under the FG Loan Amendment on July 8, 2025, $64,489 of which was used to retire the Pelorus Term Loan, and certain other indebtedness of the Company, in addition to being used for future growth initiatives.

On July 15, 2025, the Company drew $3,105 of the Uncommitted Term Loan Facility.

During the year ended December 31, 2025, the Company made prepayments in aggregate of $4,423, including a 3% prepayment fee.

On March 4, 2026, the Company, FG Agency Lending LLC, and the parties to the loan agreement amended the terms of the FG Loan to, among other things, permit the Company to incur certain additional indebtedness.

As of December 31, 2025, there was an outstanding principal amount of $217,682 under the FG Loan.

<u>Maryland Acquisition Loans</u>

In connection with the acquisition of Derby 1, LLC on June 28, 2023 ("Peninsula"), Hempaid, LLC on June 30, 2023 ("Blue Ridge"), and Herbiculture Inc. on July 10, 2023 ("Herbiculture"), (collectively, the "Maryland Acquisitions"), the Company entered into a series of promissory notes with an aggregate principal amount of $20,625.

On July 8, 2025, as described above, the Company entered into the FG Loan Amendment, of which, a portion of the proceeds was used to retire a series of Maryland promissory notes and pay an outstanding principal amount of $13,077. Due to the early retirement of the certain Maryland promissory notes, the Company recognized a loss on extinguishment of debt of $240 on the Consolidated Statements of Operations and Comprehensive Loss.

As of December 31, 2025, there was an outstanding principal amount of $2,758 under the promissory notes related to the Maryland Acquisitions associated with Blue Ridge, which bears interest at 7.0% with a maturity date of June 30, 2027.

<u>Ratio Promissory Note</u>

As a part of the Ratio Acquisition, the Company entered into a promissory note for $3,980 bearing 6% interest with a two-year maturity.

As of December 31, 2025, there was an outstanding principal amount of $3,980 under the Ratio Promissory Note.

<u>Class A Shares of TerrAscend</u>

In connection with the Reorganization, TerrAscend issued $1,000 of class A shares (the "Class A Shares") with a 20% guaranteed annual dividend to an investor (the "Investor") pursuant to the terms of a subscription agreement between TerrAscend and the Investor dated April 20, 2023 (the "Subscription Agreement"). Pursuant to the terms of the Subscription Agreement, TerrAscend holds a call right to repurchase all of the Class A Shares issued to the Investor for an amount equal to the sum of: (a) the Repurchase/Put Price (as defined in the Subscription Agreement); plus (b) the amount equal to 40% of the subscription amount less the aggregate dividends paid to the Investor as of the date of the exercise of the purchase right. In addition, the Investor holds a put right that is exercisable at any time after four months' advanced written notice following June

------

28, 2028, to put all (and only all) of the Class A Shares owned by the Investor to TerrAscend at the Repurchase/Put Price, payable in cash or shares. The instrument is considered as a debt for accounting purposes due to the economic characteristics and risks. As of December 31, 2025, there was an outstanding principal amount of $1,000.

*Convertible Debt*

<u>Private Placement Convertible Debentures</u>

In June and August 2023, the Company closed the private placements of a total of 10,355 senior unsecured convertible debentures at a price of $1,000 per debenture for total gross proceeds of $10,355. Unless repaid or converted earlier, the outstanding principal and accrued and unpaid interest on the debentures will be due and payable 36 months following the closing of the debenture offering (the "Debenture Maturity Date"). Each debenture bears interest at a rate of 9.9% per annum from the date of issuance, calculated and compounded semi-annually, and payable on the Debenture Maturity Date. Each holder has the option to elect to receive up to 4.95% per annum of such interest payable in cash on a semi-annual basis. Each debenture is convertible into Common Shares, at the option of the holder, at any time or times prior to the close of business on the last business day immediately preceding the Debenture Maturity Date, at a conversion price of $2.01 per Common Share. Holders converting their debentures will receive accrued and unpaid interest for the period from and including the date of the last interest payment date, to and including, the date of conversion. As of December 31, 2025, there was an outstanding principal amount of $10,355 and accrued interest of $2,171. As of December 31, 2025, the Common Share price of $0.72 was below the $2.01 conversion price. Accordingly, conversion is out-of-the-money, and the Company expects repayment or refinancing at maturity unless market conditions change.

<u>Union Chill Convertible Promissory Note</u>

On December 26, 2025, the Company issued a convertible promissory note for $9,000 to the various sellers of Union Chill (the "Convertible Notes"). Unless repaid or converted earlier, the outstanding principal and interest owed under the Convertible Notes shall be due and payable 48 months following the date of issuance (the "Convertible Note Maturity Date"). The Convertible Notes bears interest at the rate of 6.5% per annum payable in quarterly payments within five days following the first business day of each fiscal quarter. Each of the Convertible Notes is convertible into Common Shares, only in its entirety, at the option of the holder, at any time or times prior to the close of business on the last business day immediately preceding the Convertible Note Maturity Date, at a conversion price of $1.89 per Common Share. As of December 31, 2025, there was an outstanding principal amount of $9,000 owed under the Convertible Note.

**<u>Share Repurchases</u>**

On August 20, 2025, the Board approved the Share Repurchase Program, which replaced the Original Program. The Share Repurchase Program authorizes the Company to repurchase up to 10,000,000 Common Shares at any time, or from time to time, from August 22, 2025 until August 21, 2026. The Share Repurchase Program authorizes the Company to repurchase up to 60,255 Common Shares daily, which represents 25% of the Company's average daily trading volume on the TSX of 241,023 Common Shares. Any repurchases under the program may be made by means of open market transactions, negotiated block transactions, or otherwise, including pursuant to a repurchase plan administered in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended. The size and timing of any repurchases will depend on price, market and business conditions, and other factors.

During the year ended December 31, 2025, the Company repurchased 1,117,500 Common Shares under its share repurchase programs, consisting of 75,000 Common Shares under the Share Repurchase programs and 1,042,500 Common Shares under the Original Program, for total consideration of approximately $428, including excise tax. The Company canceled all Common Shares that were repurchased. As of December 31, 2025, the Company had a total of 9,925,000 Common Shares remaining that can be authorized for repurchase pursuant to the Share Repurchase Program.

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**<u>Cash Flows</u>**

*Unless otherwise noted, dollar amounts in this section are in thousands of U.S. dollars.*

***Cash flows provided by operating activities***

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
| Net cash provided by operating activities - continuing operations | $33926 | $46216 | $51888 |
| Net cash used in operating activities - discontinued operations | (12398) | (8266) | (24417) |
| Net cash provided by operating activities | $21528 | $37950 | $27471 |

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Continuing Operations

The decrease of $12,290 in net cash provided by operating activities for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily driven by higher income taxes paid and increased interest payments on its loans payable.

The decrease of $5,672 in net cash provided by operating activities for the year ended December 31, 2024 as compared to December 31, 2023 is primarily driven by unfavorable changes in working capital, partially offset by an income tax refund related to an amended federal tax return for tax year 2020.

Discontinued Operations

The increase of $4,132 in net cash used in operating activities for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily driven by unfavorable changes in working capital and increased expenditures related to the exit of Michigan.

The decrease of $16,151 in net cash used in operating activities for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily driven by favorable changes in working capital along with $2,881 of cash received for a recovery of expected credit loss.

***Cash flows used in investing activities***

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| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
| Net cash used in investing activities - continuing operations | $(17715) | $(9763) | $(26340) |
| Net cash provided by (used in) investing activities - discontinued operations | 3108 | (2484) | 10121 |
| Net cash used in investing activities | $(14607) | $(12247) | $(16219) |

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Continuing Operations

The increase of $7,952 in net cash used in investing activities for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily driven by cash consideration of $5,261 paid in connection with the Ratio Cannabis acquisition, and a $3,400 refundable deposit related to a potential business acquisition.

The decrease of $16,577 in net cash used in investing activities for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily driven by $16,789 of cash paid for the acquisition of four dispensaries in Maryland and a success fee of $3,750 related to Alternative Treatment Center licenses issued by the New Jersey Department of Health during the year ended December 31, 2023. This was partially offset by an increase in capital expenditures during the year ended December 31, 2024.

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Discontinued Operations

The increase of $5,592 in net cash provided by investing activities year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily driven by the sale of property and equipment related to the exit of Michigan.

The decrease of $12,605 in net cash provided by investing activities year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily driven by the sale of property and equipment related to the closure of the TerrAscend Canada's manufacturing facility during the year ended December 31, 2023.

***Cash flows provided by (used in) financing activities***

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| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
| Net cash provided by (used in) financing activities- continuing operations | $4188 | $(15929) | $(3611) |
| Net cash used in financing activities- discontinued operations |  | (8787) | (8889) |
| Net cash provided by (used in) financing activities | $4188 | $(24716) | $(12500) |

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Continuing Operations

The increase of $20,117 in net cash provided by (used in) financing activities year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily driven by net loan proceeds of $8,221 in 2025, compared to net loan principal paid of $8,114, in 2024, and lower distributions to non-controlling interests during 2025.

The increase of $12,318 in net cash used in financing activities for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily driven by of net proceeds from private placements of $20,820 in 2023, partially offset by lower distributions to non-controlling interests in 2024.

Discontinued Operations

The net cash used in financing activities year ended December 31, 2024 and 2023 was primarily driven by loan principal paid.

**<u>Reconciliation of Non-GAAP Measures</u>**

*Unless otherwise noted, dollar amounts in this section are in thousands of U.S. dollars.*

In addition to reporting the financial results in accordance with GAAP, the Company reports certain financial results that differ from what is reported under GAAP. Non-GAAP measures used by management do not have any standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies. The Company believes that certain investors and analysts use these measures to measure a company's ability to meet other payment obligations or as a common measurement to value companies in the cannabis industry, and the Company calculates: (i) Free cash flow from net cash provided by operating activities from continuing operations less capital expenditures for property and equipment which management believes is an important measurement of the Company's ability to generate additional cash from its business operations, and (ii) EBITDA from continuing operations and Adjusted EBITDA from continuing operations as net loss, adjusted to exclude provision for income taxes, finance expenses, depreciation and amortization, share-based compensation, impairment of goodwill and intangible assets, loss (gain) on extinguishment of debt, unrealized and realized loss on investments, loss (gain) on fair value of derivative liabilities, loss (gain) on disposal of fixed assets, gain on lease termination, unrealized and realized foreign exchange (gain) loss), gain from revaluation of contingent consideration, impairment of property and equipment and right of use assets, and certain other items, which management believes is not reflective of the ongoing operations and performance of the Company. Such information is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

The Company believes Adjusted EBITDA from continuing operations is a useful performance measure to assess the performance of the Company as it provides more meaningful ongoing operating results by excluding the effects of expenses that are not reflective of the Company's underlying business performance and other one-time or non-recurring expenses. The table below reconciles net loss to EBITDA from continuing operations and Adjusted EBITDA from continuing operations for the years ended December 31, 2025, December 31, 2024, and December 31, 2023:

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---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| **Net loss** | $**(81331)** | $**(72670)** | $**(86730)** |
| Loss from discontinued operations | 56842 | 51779 | 59103 |
| Loss from continuing operations | (24489) | (20891) | (27627) |
| *Add (deduct) the impact of:* |  |  |  |
| Provision for income taxes | 29466 | 25134 | 23386 |
| Finance expenses | 36291 | 34339 | 32053 |
| Amortization and depreciation | 15640 | 15191 | 15568 |
| **EBITDA from continuing operations**<br> (a) | **56908** | **53773** | **43380** |
| *Add (deduct) the impact of:* |  |  |  |
| Share-based compensation<br> (b) | 5007 | 9706 | 7707 |
| Impairment of goodwill and intangible assets<br> (c) | 2606 |  | 20208 |
| Loss on extinguishment of debt<br> (d) | 1432 | 2096 | - |
| Unrealized and realized loss on investments<br> (e) | 1365 | 238 | 2604 |
| Loss (gain) on fair value of derivative liabilities<br> (f) | 535 | (4549) | (1181) |
| Loss (gain) on disposal of fixed assets<br> (g) | 127 | (21) | (38) |
| Gain on lease termination<br> (h) | (99) | (1169) | (1217) |
| Unrealized and realized foreign exchange (gain) loss<br> (i) | (687) | 940 | 2 |
| (Gain) loss from revaluation of contingent consideration<br> (j) | (1004) | 2465 | (645) |
| Impairment of property and equipment and right of use assets<br> (k) |  | 2438 | 28 |
| Other one-time items<br> (l) | 1621 | 4303 | 4444 |
| **Adjusted EBITDA from continuing operations** | $**67811** | $**70220** | $**75292** |

---

The table below reconciles net cash provided by operating activities from continuing operations to free cash flow for the years ended December 31, 2025, December 31, 2024 and December 31, 2023:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| Net cash provided by operating activities - continuing operations | $**33926** | $**46216** | $**51888** |
| Capital expenditures for property and equipment | (8614) | (6866) | (4871) |
| **Free Cash Flow** | $**25312** | $**39350** | $**47017** |

---

a) EBITDA from continuing operations is a non-GAAP measure and is calculated from net (loss) income.

b) Represents non-cash share-based compensation expense.

c) Represents impairment charges taken on the Company's intangible assets and goodwill.

d) Represents the loss on extinguishment of debt recorded as a result of the extinguishment of the loans.

e) Represents unrealized and realized loss on fair value changes on strategic investments.

f) Represents the revaluation of the fair value of convertible options.

g) Represents the loss (gain) taken on the disposal of property and equipment.

h) Represents the gain taken as a result on lease termination and derecognition of right of use assets.

i) Represents the remeasurement of USD denominated cash and other assets recorded in CAD functional currency.

j) Represents the revaluation of the Company's contingent consideration liabilities.

------

k) Represents impairment charges taken on the Company's property and equipment.

l) Includes one-time fees incurred in connection with the Company's acquisitions, such as expenses related to professional fees, consulting, legal, and accounting, that would otherwise not have incurred. In addition, includes one-time charges for Sarbanes-Oxley Act of 2002 implementation, as well as work completed in preparation of becoming a U.S. filer. These fees are not indicative of the Company's ongoing costs.

The decrease in Adjusted EBITDA from continuing operations for the year ended December 31, 2025, as compared to December 31, 2024 was primarily due to lower add-backs for non-recurring items in 2025.

The decrease in Adjusted EBITDA from continuing operations for the year ended December 31, 2024, as compared to December 31, 2023 was primarily due to margin compression driven by higher input costs.

**<u>Changes in or Adoption of Accounting Principles</u>**

New standards, amendments and interpretations adopted:

Information regarding the Company's adoption of new accounting and reporting standards is discussed in Note 2 to the accompanying Consolidated Financial Statements included in Item 8, "Financial Statements and Supplementary Data" in this Annual Report.

**<u>Critical Accounting Estimates and Policies</u>**

The preparation of the Company's Consolidated Financial Statements requires management to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

While the Company's significant accounting policies are described in more detail in Note 2 to the accompanying Consolidated Financial Statements included in Item 8, "Financial Statements and Supplementary Data" in this Annual Report, the accounting estimates and assumptions discussed in this section are those that the Company considers to be the most critical in the preparation of the Consolidated Financial Statements. An accounting estimate or assumption is considered critical if both (a) the nature of the estimate or assumption is material due to the levels of subjectivity and judgement involved, and (b) the impact within a reasonable range of outcomes of the estimate and assumption is material to the financial condition.

A quantitative sensitivity analysis is provided where information is available to reasonably estimate the impact and provides material information to investors.

***Acquisitions***

As the Company continues to acquire businesses and operate in a broader range of markets, the Company expects its valuation techniques to continue to improve through additional access to more detailed historical data, market benchmarks, and post-acquisition performance insights, such as impairment charges from prior acquisitions. These inputs enhance management's ability to evaluate projected cash flows, market sustainability, and associated risks in future valuation analyses. However, given the evolving nature of the cannabis industry, market conditions remain subject to regulatory, competitive, and economic volatility, which could materially impact assumptions used in impairment assessments.

***Income taxes***

The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Company generating future taxable income against which the deferred tax assets can be utilized. In addition, significant judgment is required in classifying transactions and assessing probable outcomes of tax positions taken, and in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions.

Provisions for taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of the reporting period. It is possible, however, that at some future date, an additional liability could result from audits by taxing authorities. If the final outcome of these tax-related matters is different from the amounts that were initially recorded, such differences will affect the tax provisions in the period in which such determination is made.

------

***Impairment of goodwill, intangible assets, and long-lived assets***

The Company evaluates goodwill, intangible assets, and long-lived assets for impairment in accordance with applicable accounting standards. Goodwill is tested for impairment at the reporting unit level under ASC 350-20 and the reporting units are identified at the same level of the Company's operating segments which are New Jersey, Pennsylvania, Maryland, Ohio, and California. Indefinite-lived intangible assets such as store brand names are tested as a single asset or group of assets under ASC 350-30. Goodwill and indefinite-lived intangible assets are evaluated annually or more frequently if events or changes in circumstances indicate that their carrying value may not be recoverable. The Company considers whether circumstances or conditions exist which suggest that the carrying value of its goodwill and indefinite-lived intangible assets might be impaired. If such circumstances exist, the Company performs a qualitative assessment to determine whether it is more likely than not that the assets are impaired. If the results of the qualitative assessment indicate that it is more likely than not that the assets are impaired, further steps are required in order to determine whether the carrying value of each reporting unit exceeds its fair value. All assets and liabilities that are employed in or relate to the operations of a reporting unit and will be considered in determining the fair value of the reporting unit are included in the carrying value of the reporting unit.

The Company estimates the fair value of its reporting units using an income approach based upon projected future discounted cash flow ("DCF") models. Under this DCF model, the fair value of each reporting unit is determined based on the present value of estimated future cash flows, discounted at a risk-adjusted rate of return. Estimated future cash flows are developed using the Company's following year budget along with anticipated market trends in which its business operates. Key inputs to this DCF model include assumptions for net sales growth, gross profit margins, operating expenses, EBITDA margins, capital expenditures, terminal growth rates, and discount rates. The discount rates are based on a weighted-average cost of capital ("WACC"). In certain circumstances where multiple potential outcomes exist, the Company utilizes a probability-weighted DCF approach. Under this method, multiple cash flow scenarios are developed and probability-weighted to reflect management's assessment of the likelihood of each outcome. In 2025, the Company applied a probability-weighted DCF model in evaluating the Pennsylvania reporting unit to reflect potential regulatory developments, including the possible legalization of adult-use cannabis in the state. The estimated fair value is sensitive to changes in key assumptions, particularly the timing and outcome of adult-use legalization. Changes in the timing or an adverse outcome of adult-use legalization could adversely affect operating results which would result in a reduction in the estimated fair value of the reporting unit below its carrying value and result in goodwill impairment. In the sensitivity analysis performed, holding all other assumptions constant, management increased the probability of no legalization from its baseline assumption of approximately 5% to approximately 30%, starting at which point the estimated fair value of the Pennsylvania reporting unit would fall below its carrying value and result in an impairment.

The Company estimates the fair value of its indefinite-lived intangible assets using the relief-from-royalty method income approach which is based upon a DCF model. The relief-from-royalty method estimates the fair value of a trade name or trademark license by discounting the hypothetical avoided royalty payments to their present value over the economic life of the asset. The determination of fair value using this method entails a significant number of estimates and assumptions, which require management judgment, and include net sales growth rates, WACC, and royalty rates.

Significant judgment is required to estimate the fair value of goodwill and indefinite-lived intangible assets, both at acquisition and during impairment testing. These estimates involve assumptions about future cash flows, discount rates, and market conditions, all of which are subject to uncertainty. The recoverability of these assets depends on the achievement of projected results and execution of strategic initiatives. Changes in regulatory environment expectations, economic conditions, consumer demand, pricing pressure, or the cost of capital could result in actual outcomes differing materially from those assumed in our models. A hypothetical 10% reduction in projected net sales could result in a materially different fair value conclusion for certain reporting units or indefinite-lived assets.

The Company evaluates the accuracy of its forecasts by comparing prior projections to actual post-acquisition performance. This comparison provides refinements to our valuation models and assumptions in future periods. While the Company believes its current estimates are reasonable, future changes in business or economic conditions may cause deviations from those assumptions.

***Variable Interest Entity***

The Company consolidates legal entities in which it holds a controlling financial interest. Determining whether it has a controlling financial interest in a variable interest entity ("VIE") is subject to significant judgment and estimates. There is inherent uncertainty in evaluating who has the power to direct the activities of the VIE that most significantly impact the entity's economic performance. The Company's considerations include, but are not limited to, voting interests of the VIE, management, service and other agreements with the VIE, involvement in the VIE's initial design and the existence of explicit or implicit

------

financial guarantees. Management has applied significant judgment when evaluating the facts and circumstances of the VIE (see Note 3 included in Item 8, "*Financial Statements and Supplementary Data*").

**<u>Emerging Growth Company and Smaller Reporting Company Status</u>**

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the Company's Consolidated Financial Statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

The Company will remain an emerging growth company until the earlier to occur of: (i) December 31, 2027 (a) in which the Company has total annual gross revenue of $1,235,000 or more, or (b) in which the Company is deemed to be a large accelerated filer, which means the market value of the Common Shares held by non-affiliates exceeds $700,000 as of the last business day of the Company's most recent second fiscal quarter; and (ii) the date on which the Company has issued more than $1,000,000 in non-convertible debt during the prior three-year period.

Additionally, as of June 30, 2025, the market value of the Common Shares held by non-affiliates decreased to below $60,000, which triggered the Company being classified as a smaller reporting company and non-accelerated filer with respect to SEC regulations and filing requirements effective December 31, 2025. we are a "smaller reporting company". We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250,000 as of the last business day of our second fiscal quarter, or (ii) our annual revenue exceeded $100,000 during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700,000 as of the last business day of our second fiscal quarter.

Although the Company qualifies as a smaller reporting company, it does not intend to reduce its disclosures and expects to continue providing disclosures consistent with those required of accelerated filers.

**Item 7A. Quantitative and Qualitati** **ve Disclosures About Market Risk**

Market risk represents the risk of loss that may impact the Company's financial position due to adverse changes in financial market prices and rates. The Company's market risk exposure is primarily a result of exposure due to potential changes in inflation and interest rates. The Company does not hold financial instruments for trading purposes.

**<u>Financial Instruments and Risk Management</u>**

*Financial Instruments*

Financial instruments recorded at fair value are estimated by applying a fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy is summarized as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Level 1 - quoted prices (unadjusted) in active markets for identical assets and liabilities

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Level 2 - inputs other than quoted prices that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices) from observable market data

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Level 3 - inputs for assets and liabilities not based upon observable market data

*Risk Management*

The Company's risk exposure and the impact on the Company's financial instruments are summarized below:

(a) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, accounts receivable, net and notes receivable. The Company assesses the credit risk of trade receivables by evaluating the aging of trade receivables based on the invoice date. The carrying amounts of trade

------

receivables is reduced through the use of an allowance account and the amount of the loss is recognized in the Consolidated Statements of Operations and Comprehensive Loss. When a trade receivable balance is considered uncollectible, it is written off against the allowance for expected credit losses.

Subsequent recoveries of amounts previously written off are credited against operating expenses in the Consolidated Statements of Operations and Comprehensive Loss. The Company regularly monitors credit risk exposure and takes steps to mitigate the likelihood of these exposures resulting in actual loss. The Company had no customers whose balance is greater than 10% of total trade receivables as of December 31, 2025.

(b) Liquidity risk

The Company is exposed to liquidity risk, or the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages liquidity risk through ongoing review of its capital requirements. the Company's objective with respect to its capital management is to ensure it has sufficient cash resources to maintain its ongoing operations.

(c) Market Risk

The significant market risk exposures to which the Company is exposed are foreign currency risk and interest rate risk.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i) Foreign currency risk:

Foreign currency risk is the risk that a variation in exchange rates between the Canadian dollar and U.S. dollar and other foreign currencies will affect the Company's operations and financial results.

The Company holds cash and cash equivalents in currencies other than its functional currency. The Company does not currently engage in currency hedging activities to limit the risks of currency fluctuations. Consequently, fluctuations in foreign currencies could have a negative impact on the profitability of the Company's operations. However, as of the year ended December 31, 2025, a 10% change in the value of the U.S. dollar compared to the Canadian dollar would not result in a material impact on unrealized foreign exchange for the Company.

ii) Interest rate risk:

Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. In respect of financial assets, the Company's policy is to invest excess cash at floating rates of interest in cash equivalents, in order to maintain liquidity, while achieving a satisfactory return. Fluctuations in interest rates impact the value of cash equivalents. The Company's investments in guaranteed investment certificates bear a fixed rate and are cashable at any time prior to maturity date.

The Company does not have significant cash equivalents for the year ended December 31, 2025. At December 31, 2025, a 10% change to each of the interest rates would not result in a material impact. The remainder of the Company's loans payable have fixed interest rates from 6.00% to 12.75% per annum. All other financial liabilities are non-interest-bearing instruments.

**Item 8. Financial Statements and Supplementary Data**

All information required by this item may be found on pages F-1 through F-48 of this Annual Report.

**Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure**

None.

**Item 9A. Controls and Procedures**

**<u>Evaluation of Disclosure Controls and Procedures</u>**

Internal control over financial reporting is defined in Rule 13a-15(f) promulgated under the Exchange Act, as a process designed by, or under the supervision of, the Company's principal executive officer and principal financial officer and effected by the Board, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company's management has evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Annual Report. Based upon

------

that evaluation, management determined that the Company's disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2025.

**<u>Limitations on Effectiveness of Controls and Procedures</u>**

In designing and evaluating the Company's disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

**<u>Management's Annual Report on Internal Controls Over Financial Reporting</u>**

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. The Company's management conducted an assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2025. This assessment was based on criteria established in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2013 framework). This evaluation included a review of the documentation of controls, an evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on the outcome of the evaluation. Based on the results of its assessment, the Company's management concluded that its internal control over financial reporting was effective as of December 31, 2025.

This Annual Report does not include an attestation report of the Company's independent registered public accounting firm regarding the effectiveness of its internal control over financial reporting due to its exemption as an emerging growth company. Management's report was not subject to audit by the Company's registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this Annual Report.

**<u>Changes in Internal Control Over Financial Reporting</u>**

There have been no changes to the Company's internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2025, that have materially affected, or were reasonably likely to materially affect, the Company's internal controls over financial reporting.

**Item 9B. Other Information**

None.

**Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections**

Not applicable.

------

**PART III** 

**Item 10. Directors, Executive Officers and Corporate Governance**

Information required by Item 10 of Part III will be included in the Company's Proxy Statement relating to the Company's 2026 Annual Meeting of Shareholders (the "2026 Annual Meeting") and is incorporated herein by reference.

Information regarding the Company's Code of Business Conduct and Ethics (the "Code of Conduct") required by this item will be contained in the Proxy Statement relating to the 2026 Annual Meeting and is hereby incorporated by reference. If the Company makes any substantive amendments to the Code of Conduct or grants any waiver from a provision of the Code of Conduct to any executive officer or director, it will promptly disclose the nature of the amendment or waiver on its website. The full text of the Code of Conduct is available at the Investor Relations section of the Company's website at https://ir.terrascend.com/. The reference to the Company's website address does not constitute incorporation by reference of the information contained at or available through the website, and you should not consider it to be a part of this Annual Report.

The Company has adopted an insider trading policy (the "Insider Trading Policy") that governs the purchase, sale, and/or other dispositions of securities by the Company's directors, officers, employees and contractors. The Insider Trading Policy is designed to promote compliance with insider trading laws, rules and regulations, and the exchange listing standards applicable to the Company, as well as procedures designed to further the foregoing purposes. A copy of the Company's Insider Trading Policy, including any amendments thereto, is filed as Exhibit 19.1 to this Annual Report. In addition, it is the Company's intent to comply with applicable laws and regulations relating to insider trading.

**Item 11. Executive Compensation**

Information required by Item 11 of Part III will be included in the Company's Proxy Statement relating to the 2026 Annual Meeting and is incorporated herein by reference.

**Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters**

Information required by Item 12 of Part III will be included in the Company's Proxy Statement relating to the 2026 Annual Meeting and is incorporated herein by reference.

**Item 13. Certain Relationships and Related Transactions, and Director Independence**

Information required by Item 13 of Part III will be included in the Company's Proxy Statement relating to the 2026 Annual Meeting and is incorporated herein by reference.

**Item 14. Principal Accounting Fees and Services**

Information required by Item 14 of Part III will be included in the Company's Proxy Statement relating to the 2026 Annual Meeting and is incorporated herein by reference.

------

**PART IV**

**Item 15. Exhibits, Financial Statement Schedules**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The following documents are filed as part of this Annual Report:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.*Financial Statements*

The accompanying Index to Consolidated Financial Statements on page F-1 of this Annual Report is provided in response to this item and is incorporated into this item by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.*List of Financial Statement Schedules.*

All schedules are omitted because the required information is either not present, not present in material amounts or presented within the Consolidated Financial Statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The exhibits listed in the following "Exhibit Index" are filed, furnished or incorporated by reference as part of this Annual Report.

------

**Exhibit Index**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  | **Incorporated By Reference** | **Incorporated By Reference** | **Incorporated By Reference** | **Incorporated By Reference** |  |
| **Exhibit**<br>**Number** | **Exhibit Title** | **Form** | **File No.** | **Exhibit** | **Filing Date** | **Filed or Furnished**<br>**Herewith** |
| 2.1\* | [<u>Arrangement Agreement, dated October 8, 2018, by and among TerrAscend Corp., Canopy Growth Corporation, Canopy Rivers Corporation, JW Opportunities Master Fund, Ltd., JW Partners, LP and Pharmaceutical Opportunities Fund, LP.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000110465921132465/tm2129883d1_ex2-1.htm) | 10-12G | 000-56363 | 2.1 | 11/2/2021 |  |
| 2.2\* | [<u>Securities Purchase Agreement, dated February 10, 2019, by and among BTHHM Berkeley, LLC, PNB Noriega, LLC, V Products, LLC, certain limited liability company interest holders of each of the forgoing entities, Michael Thomsen and TerrAscend Corp. and WDB Holding CA, Inc.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000110465921132465/tm2129883d1_ex2-2.htm) | 10-12G | 000-56363 | 2.2 | 11/2/2021 |  |
| 2.3\*† | [<u>Securities Purchase Agreement, dated February 10, 2019, by and among RHMT, LLC, Deep Thought, LLC, Howard Street Partners, LLC, certain limited liability company interest holders of each of the forgoing entities, Michael Thomsen, and TerrAscend Corp. and WDB Holding CA, Inc.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000110465921132465/tm2129883d1_ex2-3.htm) | 10-12G | 000-56363 | 2.3 | 11/2/2021 |  |
| 2.4\* | [<u>Securities Purchase and Exchange Agreement, dated August 1, 2019, by and among Ilera Holdings LLC, Mera I LLC, Mera II LLC, TerrAscend Corp., WDB Holding PA, Inc. and Osagie Imasogie.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000110465921132465/tm2129883d1_ex2-4.htm) | 10-12G | 000-56363 | 2.4 | 11/2/2021 |  |
| 2.5\* | [<u>Membership Interest Purchase Agreement, dated August 31, 2021, by and between WDB Holdings MI, Inc. and 3 State Park, LLC, AEY Holdings, LLC, AEY Capital, LLC, AEY Thrive, LLC and Seller.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000110465921132465/tm2129883d1_ex2-7.htm) | 10-12G | 000-56363 | 2.7 | 11/2/2021 |  |
| 2.6 | [<u>First Amendment to Membership Interest Purchase Agreement, dated November 9, 2021, by and between WDB Holdings MI, Inc. and 3 State Park, LLC, AEY Holdings, LLC, AEY Capital, LLC, AEY Thrive, LLC and Seller.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000110465921152682/tm2129883d2_ex2-8.htm) | 10-12G/A | 000-56363 | 2.8 | 12/22/2021 |  |
| 2.7† | [<u>Second Amendment to Membership Interest Purchase Agreement, dated March 8, 2022, by and between WDB Holdings MI, Inc. and 3 State Park, LLC, AEY Holdings, LLC, AEY Capital, LLC, AEY Thrive, LLC, Seller and Gage Growth Corp.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000110465922033371/tm228288d2_ex10-1.htm) | 8-K | 000-56363 | 10.1 | 03/14/2022 |  |
| 2.8\* | [<u>Arrangement Agreement, dated August 31, 2021, by and between TerrAscend Corp. and Gage Growth Corp.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000110465921132465/tm2129883d1_ex2-6.htm) | 10-12G | 000-56363 | 2.6 | 11/2/2021 |  |
| 2.9 | [<u>Amending Agreement, dated October 4, 2021, by and between TerrAscend Corp. and Gage Growth Corp.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000110465921132465/tm2129883d1_ex2-8.htm) | 10-12G | 000-56363 | 2.8 | 11/2/2021 |  |
| 2.10 | [<u>Second Amending Agreement, dated March 8, 2022, by and between TerrAscend Corp. and Gage Growth Corp.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000110465922033371/tm228288d2_ex10-2.htm) | 8-K | 000-56363 | 10.2 | 03/14/2022 |  |

---

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---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| 3.1 | [<u>Articles of TerrAscend Corp., dated March 7, 2017.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000110465921132465/tm2129883d1_ex3-1.htm) | 10-12G | 000-56363 | 3.1 | 11/2/2021 |  |
| 3.2 | [<u>Articles of Amendment to the Articles of TerrAscend Corp., dated November 30, 2018.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000110465921152682/tm2129883d2_ex3-2.htm) | 10-12G/A | 000-56363 | 3.2 | 12/22/2021 |  |
| 3.3 | [<u>Articles of Amendment to the Articles of TerrAscend Corp., dated May 22, 2020.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000110465921152682/tm2129883d2_ex3-3.htm) | 10-12G/A | 000-56363 | 3.3 | 12/22/2021 |  |
| 3.4 | [<u>By-laws of TerrAscend Corp., dated March 7, 2017.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000110465921132465/tm2129883d1_ex3-3.htm) | 10-12G | 000-56363 | 3.3 | 11/2/2021 |  |
| 4.1 | [<u>Description of Securities.</u>](tsndf-ex4_1.htm) |  |  |  |  | X |
| 4.2 | [<u>Form of Non-Affiliate Gage Growth Corp. Replacement Warrants dated March, 2022.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017023008501/trssf-ex4_6.htm) | 10-K | 000-56363 | 4.6 | 03/16/2023 |  |
| 4.3 | [<u>Form of Warrant Certificate dated December, 2022.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017023008501/trssf-ex4_7.htm) | 10-K | 000-56363 | 4.7 | 03/16/2023 |  |
| 4.4 | [<u>Warrant Indenture.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017023032179/tsndf-ex4_1.htm) | 10-K | 000-56363 | 4.1 | 06/29/2023 |  |
| 10.1\* | [<u>Subscription Agreement, dated April 20, 2023, by and between TerrAscend Growth Corp. and TerInvest LLC.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017023014495/trssf-ex10_1.htm) | 8-K/A | 000-56363 | 10.1 | 04/26/2023 |  |
| 10.2\* | [<u>Protection Agreement, dated April 20, 2023, by and between TerrAscend Growth Corp. and TerrAscend Corp.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017023014495/trssf-ex10_2.htm) | 8-K/A | 000-56363 | 10.2 | 04/26/2023 |  |
| 10.3\* | [<u>Form of Subscription Agreement for Equity Offering.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017023032179/tsndf-ex10_1.htm) | 8-K | 000-56363 | 10.1 | 06/29/2023 |  |
| 10.4\* | [<u>Form of Subscription Agreement for Equity Offering with Registered Broker-Dealer.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017023032179/tsndf-ex10_2.htm) | 8-K | 000-56363 | 10.2 | 06/29/2023 |  |
| 10.5\* | [<u>Form of Subscription Agreement for Debenture Offering.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017023032179/tsndf-ex10_3.htm) | 8-K | 000-56363 | 10.3 | 06/29/2023 |  |
| 10.6\* | [<u>Form of Convertible Debenture.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017023032179/tsndf-ex10_4.htm) | 8-K | 000-56363 | 10.4 | 06/29/2023 |  |
| 10.7 | [<u>Form Unit Purchase Agreement, dated January 19, 2024, by and among RHMT, LLC, Deep Thought, LLC, Howard Street Partners, LLC, Anthony and Jamie Shira, Arion Luce, Michael Thomsen, Ryan Hudson and WDB Holding CA, Inc., a wholly-owned subsidiary of TerrAscend Corp.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017024056868/tsndf-ex10_1.htm) | 10-Q | 000-56363 | 10.1 | 05/9/2024 |  |
| 10.8\*† | [<u>Loan Agreement, dated August 1, 2024, by and among TerrAscend USA, Inc., as Borrower Representative, the subsidiaries and affiliates of the Borrower Representative, as Borrowers, and FG Agency Lending LLC, as the Administrative Agent.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017024122252/tsndf-ex10_1.htm) | 10-Q | 000-56363 | 10.1 | 11/6/2024 |  |
| 10.9\* | [<u>Amendment No. 1, dated September 30, 2024, by and among TerrAscend USA, Inc., as Borrower Representative, the subsidiaries and affiliates of the Borrower Representative, as Borrowers, and FG Agency Lending LLC, as the Administrative Agent.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017024122252/tsndf-ex10_2.htm) | 10-Q | 000-56363 | 10.2 | 11/6/2024 |  |
| 10.10\* | [<u>Amendment No. 2, dated July 7, 2025, by and among TerrAscend USA, Inc., as Borrower Representative,</u>](https://www.sec.gov/Archives/edgar/data/1778129/000119312525268099/tsndf-ex10_1.htm) | 10-Q<br>| 000-56363<br>| 10.1<br>| 11/6/2025 |  |

---

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | [<u>the subsidiaries and affiliates of the Borrower Representative, as Borrowers, and FG Agency Lending LLC, as the Administrative Agent.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000119312525268099/tsndf-ex10_1.htm) |  |  |  |  |  |
| 10.11\* | [<u>Amendment No. 3, dated July 15, 2025, by and among TerrAscend USA, Inc., as Borrower Representative, the subsidiaries and affiliates of the Borrower Representative, as Borrowers, and FG Agency Lending LLC, as the Administrative Agent.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000119312525268099/tsndf-ex10_2.htm) | 10-Q<br>| 000-56363<br>| 10.2<br>| 11/6/2025<br>|  |
| 10.12\* | [<u>Amendment No. 4, dated March 4, 2026, by and among TerrAscend USA, Inc., as Borrower Representative, the subsidiaries and affiliates of the Borrower Representative, as Borrowers, and FG Agency Lending LLC, as the Administrative Agent.</u>](tsndf-ex10_12.htm) |  |  |  |  | X<br>|
| 10.13 | [<u>Loan Agreement, dated October 11, 2022, by and among subsidiaries of TerrAscend Corp., TerrAscend NJ LLC, HMS Processing LLC, HMS Hagerstown, LLC, HMS Health, LLC, as Borrowers, and Pelorus Fund REIT, LLC, as Lender.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017023008501/trssf-ex10_10.htm) | 10-K | 000-56363 | 10.10 | 03/16/2023 |  |
| 10.14 | [<u>Amendment No. 1, dated April 17, 2023, by and among TerrAscend NJ LLC, HMS Processing, LLC, HMS Hagerstown, LLC, HMS Health, LLC, as Borrowers, TerrAscend Corp. and TerrAscend USA, Inc., Well and Good, Inc. and WDB Holding MD, Inc., as Guarantors, and Pelorus Fund REIT, LLC, as Lender.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017023041289/tsndf-ex10_10.htm) | 10-Q | 000-56363 | 10.10 | 08/10/2023 |  |
| 10.15 | [<u>Amendment No. 2, dated June 22, 2023, by and among TerrAscend NJ LLC, HMS Processing, LLC, HMS Hagerstown, LLC, HMS Health, LLC, as Borrowers, TerrAscend Corp. and TerrAscend USA, Inc., Well and Good, Inc. and WDB Holding MD, Inc., as Guarantors, and Pelorus Fund REIT, LLC, as Lender.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017023041289/tsndf-ex10_11.htm) | 10-Q | 000-56363 | 10.11 | 08/10/2023 |  |
| 10.16 | [<u>Amendment No. 3 to Loan Agreement, dated November 29, 2023, by and among TerrAscend NJ LLC, HMS Processing, LLC, HMS Hagerstown, LLC, and HMS Health, LLC, as Borrowers, TerrAscend Corp. and TerrAscend USA, Inc., Well and Good, Inc. and WDB Holdings MD, Inc., as Guarantors, and Pelorus Fund REIT, LLC, as Lender.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017024031450/tsndf-ex10_23.htm) | 10-K | 000-56363 | 10.23 | 03/14/2024 |  |
| 10.17 | [<u>Promissory Note, dated October 11, 2022, by and among TerrAscend Corp., TerrAscend NJ LLC, BWH NJ LLC and Blue Marble Ventures LLC.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017023008501/trssf-ex10_11.htm) | 10-K | 000-56363 | 10.11 | 03/16/2023 |  |
| 10.18 | [<u>Debt Settlement Agreement, dated December 9, 2022, by and among TerrAscend Corp., Arise Bioscience, Inc., Canopy USA, LLC, Canopy USA I Limited Partnership and Canopy USA III Limited Partnership.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017023008501/trssf-ex10_12.htm) | 10-K | 000-56363 | 10.12 | 03/16/2023 |  |
| 10.19# | [<u>Amended and Restated Employment Agreement, dated October 31, 2025, by and between TerrAscend USA, Inc. and Ziad Ghanem.</u>](tsndf-ex10_19.htm) |  |  |  |  | X<br>|

---

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| 10.20# | [<u>Amended and Restated Employment Agreement, dated November 9, 2023, by and between TerrAscend USA, Inc, and Keith Stauffer.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017023061991/tsndf-ex10_1.htm) | 10-Q | 000-56363 | 10.1 | 11/09/2023 |  |
| 10.21# | [<u>Amended and Restated Employment Agreement, dated October 31, 2025, by and between TerrAscend USA, Inc. and Lynn Gefen.</u>](tsndf-ex10_21.htm) |  |  |  |  | X |
| 10.22# | [<u>Form of Indemnity Agreement.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000110465921132465/tm2129883d1_ex10-15.htm) | 10-12G | 000-56363 | 10.15 | 11/2/2021 |  |
| 10.23# | [<u>TerrAscend Corp. Stock Option Plan.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017025034600/tsndf-ex10_34.htm) | 10-K | 000-56363 | 10.34 | 03/06/2025 |  |
| 10.24# | [<u>Form of Option Agreement.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017025034600/tsndf-ex10_35.htm) | 10-K | 000-56363 | 10.35 | 03/06/2025 |  |
| 10.25# | [<u>TerrAscend Corp. Share Unit Plan.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017025034600/tsndf-ex10_36.htm) | 10-K | 000-56363 | 10.36 | 03/06/2025 |  |
| 10.26# | [<u>Form of Share Unit Agreement.</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017025034600/tsndf-ex10_37.htm) | 10-K | 000-56363 | 10.37 | 03/06/2025 |  |
| 19.1 | [<u>TerrAscend Corporation Insider Trading Policy</u>](https://www.sec.gov/Archives/edgar/data/1778129/000095017025034600/tsndf-ex19_1.htm) | 10-K | 000-56363 | 19.1 | 03/06/2025 |  |
| 21.1 | [<u>List of Subsidiaries of TerrAscend Corp.</u>](tsndf-ex21_1.htm) |  |  |  |  | X |
| 23.1 | [<u>Consent of MNP LLP.</u>](tsndf-ex23_1.htm) |  |  |  |  | X |
| 24.1 | Power of Attorney (contained in the signature page to this Annual report on Form 10-K). |  |  |  |  | X |
| 31.1 | [<u>Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</u>](tsndf-ex31_1.htm) |  |  |  |  | X |
| 31.2 | [<u>Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</u>](tsndf-ex31_2.htm) |  |  |  |  | X |
| 32.1\*\* | [<u>Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</u>](tsndf-ex32_1.htm) |  |  |  |  | X |
| 32.2\*\* | [<u>Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</u>](tsndf-ex32_2.htm) |  |  |  |  | X |
| 101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |  |  |  |  |  |
| 101.SCH | Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Document |  |  |  |  |  |
| 104 | Cover page formatted as Inline XBRL and contained in Exhibit 101 |  |  |  |  |  |

---

\* Certain confidential information has been excluded from this exhibit because it is both (i) not material and (ii) is the type of information of the Company treats as private or confidential.

------

# Indicates management contract or compensatory plan.

† Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the Securities and Exchange Commission upon request.

\*\* Furnished herewith and not deemed to be "filed" for purposes of Section 18 of the Exchange Act and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.

The agreements and other documents filed as exhibits to this Annual Report on Form 10-K are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

------

**Item 16. Form 10-K Summary**

Not Applicable.

------

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | TerrAscend Corp. | TerrAscend Corp. |
| Date: March 12, 2026 | By: | /s/ Ziad Ghanem |
|  |  | Ziad Ghanem  |
|  |  | President and Chief Executive Officer  |
|  |  | *(Principal Executive Officer and Principal Financial Officer)* |

---

**POWER OF ATTORNEY**

Know all persons by these presents, that each person whose signature appears below constitutes and appoints Ziad Ghanem and Lynn Gefen, jointly and each one of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place, and stead, in any and all capacities, to sign any and all amendments to this Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report has been signed by the following persons in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| /s/ Ziad Ghanem<br>Ziad Ghanem | President and Chief Executive Officer<br>(*Principal Executive Officer and Principal Financial Officer*) | March 12, 2026 |
| /s/ Jason Wild | Director | March 12, 2026 |
| Jason Wild |  |  |
| /s/ Ira Duarte | Director | March 12, 2026 |
| Ira Duarte |  |  |
| /s/ Craig Collard | Director | March 12, 2026 |
| Craig Collard |  |  |
| /s/ Ed Schutter | Director | March 12, 2026 |
| Ed Schutter |  |  |
| /s/ Kara DioGuardi | Director | March 12, 2026 |
| Kara DioGuardi |  |  |

---

------

TerrAscend Corp.

Index to the Consolidated Financial Statements

---

| | |
|:---|:---|
|  | **Page** |
| [<u>Report of Independent Registered Public Accounting Firm (PCAOB ID:</u> 1930<u>)</u>](#auditor_report) | F-2 |
| **Consolidated Financial Statements:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Consolidated Balance Sheets as of December 31, 2025 and December 31, 2024</u>](#balance_sheet) | F-3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2025, December 31, 2024 and December 31, 2023</u>](#income_statement) | F-4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Consolidated Statements of Changes in Shareholders' Equity (Deficit) for the years ended December 31, 2025, December 31, 2024 and December 31, 2023</u>](#stmt_equity) | F-5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Consolidated Statements of Cash Flows for the years ended December 31, 2025, December 31, 2024 and December 31, 2023</u>](#stmt_cash_flows) | F-6 |
| [<u>Notes to Consolidated Financial Statements</u>](#notes_fs) | F-8 |

---

------

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of TerrAscend Corp.

**Opinion on the Consolidated Financial Statements**

We have audited the accompanying consolidated balance sheets of TerrAscend Corp. (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, changes in shareholders' equity (deficit), and cash flows for each of the years in the three-year period ended December 31, 2025, 2024, and 2023, and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025, and 2024, and the results of its consolidated operations and its consolidated cash flows for each of the years in the three-year period ended December 31, 2025, 2024, and 2023, in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

---

| |
|:---|
| /s/ MNP LLP<br>Chartered Professional Accountants, <br>Licensed Public Accountants<br>We have served as the Company's auditor since 2017. |
| Toronto, Canada |
| March 12, 2026<br>|

---

------

TerrAscend Corp.

**Consolidated Balance Sheets**

*(Amounts expressed in thousands of United States dollars, except for per share amounts)* 

---

| | | |
|:---|:---|:---|
|  | **At** | **At** |
|  | **December 31, 2025** | **December 31, 2024** |
| **Assets** |  |  |
| **Current assets** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $37414 | $26381 |
| &nbsp;&nbsp;&nbsp;Restricted cash | 110 | 606 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 16898 | 20224 |
| &nbsp;&nbsp;&nbsp;Investments | 362 | 1727 |
| &nbsp;&nbsp;&nbsp;Inventory | 34054 | 39672 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 8557 | 5121 |
| &nbsp;&nbsp;&nbsp;Assets from discontinued operations, current | 12713 | 83156 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 110108 | 176887 |
| **Non-current assets** |  |  |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 129932 | 124165 |
| &nbsp;&nbsp;&nbsp;Deposits | 60 | 168 |
| &nbsp;&nbsp;&nbsp;Operating lease right of use assets | 26691 | 28755 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 167310 | 169604 |
| &nbsp;&nbsp;&nbsp;Goodwill | 109770 | 106929 |
| &nbsp;&nbsp;&nbsp;Other non-current assets | 13508 | 723 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total non-current assets | 447271 | 430344 |
| **Total assets** | $**557379** | $**607231** |
| **Liabilities and shareholders' equity** |  |  |
| **Current liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | $39807 | $40349 |
| &nbsp;&nbsp;&nbsp;Deferred revenue | 3993 | 3575 |
| &nbsp;&nbsp;&nbsp;Convertible debt | 10355 |  |
| &nbsp;&nbsp;&nbsp;Loans payable | 5322 | 6761 |
| &nbsp;&nbsp;&nbsp;Contingent consideration payable |  | 3121 |
| &nbsp;&nbsp;&nbsp;Operating lease liability | 1511 | 1322 |
| &nbsp;&nbsp;&nbsp;Derivative liability | 967 | 92 |
| &nbsp;&nbsp;&nbsp;Corporate income tax payable | 5360 | 11531 |
| &nbsp;&nbsp;&nbsp;Liabilities from discontinued operations | 12616 | 24298 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 79931 | 91049 |
| **Non-current liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Loans payable | 203846 | 183461 |
| &nbsp;&nbsp;&nbsp;Operating lease liability | 28555 | 30664 |
| &nbsp;&nbsp;&nbsp;Derivative liability | 2221 | 451 |
| &nbsp;&nbsp;&nbsp;Convertible debt | 6896 | 9114 |
| &nbsp;&nbsp;&nbsp;Deferred income tax liability | 8025 | 8428 |
| &nbsp;&nbsp;&nbsp;Contingent consideration payable |  | 172 |
| &nbsp;&nbsp;&nbsp;Liability on uncertain tax position | 128798 | 106991 |
| &nbsp;&nbsp;&nbsp;Other long term liabilities | 86 | 85 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total non-current liabilities | 378427 | 339366 |
| **Total liabilities** | 458358 | 430415 |
| Commitments and contingencies |  |  |
| **Shareholders' equity** |  |  |
| &nbsp;&nbsp;&nbsp;Share capital |  |  |
| &nbsp;&nbsp;&nbsp;Series A, convertible preferred stock, no par value, unlimited shares authorized; 10,725 and 12,350 shares outstanding as of December 31, 2025 and December 31, 2024, respectively |  |  |
| &nbsp;&nbsp;&nbsp;Series B, convertible preferred stock, no par value, unlimited shares authorized; 600 and 600 shares outstanding as of December 31, 2025 and December 31, 2024, respectively |  |  |
| &nbsp;&nbsp;&nbsp;Exchangeable shares, no par value, unlimited shares authorized; 63,492,038 and 63,492,038 shares outstanding as of December 31, 2025 and December 31, 2024, respectively |  |  |
| &nbsp;&nbsp;&nbsp;Common shares, no par value, unlimited shares authorized; 308,532,518 and 293,232,131 shares outstanding as of December 31, 2025 and December 31, 2024, respectively |  |  |
| &nbsp;&nbsp;&nbsp;Treasury stock, no par value; nil and 129,500 shares outstanding as of December 31, 2025 and December 31, 2024, respectively |  |  |
| &nbsp;&nbsp;&nbsp;Additional paid in capital | 960241 | 952463 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive income | 1986 | 3011 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (864742) | (778514) |
| &nbsp;&nbsp;&nbsp;Non-controlling interest | 1536 | (144) |
| **Total shareholders' equity** | 99021 | 176816 |
| **Total liabilities and shareholders' equity** | $**557379** | $**607231** |

---

*The accompanying notes are an integral part of these consolidated financial statements.* 

------

TerrAscend Corp.

**Consolidated Statements of Operations and Comprehensive Loss**

*(Amounts expressed in thousands of United States dollars, except for per share amounts)*

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
| **Revenue, net** | $**260558** | $**268078** | $**250509** |
| **Cost of sales** | **124234** | **132211** | **112492** |
| **Gross profit** | **136324** | **135867** | **138017** |
| **Operating expenses:** |  |  |  |
| &nbsp;&nbsp;General and administrative | 86240 | 90624 | 83543 |
| &nbsp;&nbsp;Amortization and depreciation | 5424 | 5074 | 5757 |
| &nbsp;&nbsp;Impairment of intangible assets | 2606 |  | 15518 |
| &nbsp;&nbsp;Impairment of goodwill |  |  | 4690 |
| &nbsp;&nbsp;Impairment of property and equipment and right of use assets |  | 2438 | 28 |
| &nbsp;&nbsp;Other operating expense (income) | 33 | (1190) | (1255) |
| **Total operating expenses** | **94303** | **96946** | **108281** |
| **Income from operations** | **42021** | **38921** | **29736** |
| **Other expense (income)** |  |  |  |
| &nbsp;&nbsp;Finance and other expenses | 35403 | 33488 | 32853 |
| &nbsp;&nbsp;Unrealized and realized loss on investments | 1365 | 238 | 2604 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss from revaluation of contingent consideration | (1004) | 2465 | (645) |
| &nbsp;&nbsp;Loss on extinguishment of debt | 1432 | 2096 |  |
| &nbsp;&nbsp;Loss (gain) on fair value of derivative liabilities | 535 | (4549) | (1181) |
| &nbsp;&nbsp;Transaction and restructuring costs |  |  | 344 |
| &nbsp;&nbsp;Unrealized and realized foreign exchange (gain) loss | (687) | 940 | 2 |
| **Income (loss) from continuing operations before provision for income taxes** | **4977** | **4243** | **(4241)** |
| &nbsp;&nbsp;Provision for income taxes | 29466 | 25134 | 23386 |
| **Net loss from continuing operations** | $**(24489)** | $**(20891)** | $**(27627)** |
| **Discontinued operations:** |  |  |  |
| &nbsp;&nbsp;Loss from discontinued operations, net of tax | $(56842) | $(51779) | $(59103) |
| **Net loss** | $**(81331)** | $**(72670)** | $**(86730)** |
| Foreign currency translation adjustment | 1025 | (1212) | 286 |
| **Comprehensive loss** | $**(82356)** | $**(71458)** | $**(87016)** |
| **Net loss from continuing operations attributable to:** |  |  |  |
| &nbsp;&nbsp;Common and proportionate Shareholders of the Company | $(29386) | $(28453) | $(36441) |
| &nbsp;&nbsp;Non-controlling interests | $4897 | $7562 | $8814 |
| **Comprehensive loss attributable to:** |  |  |  |
| &nbsp;&nbsp;Common and proportionate Shareholders of the Company | $(87253) | $(79020) | $(95830) |
| &nbsp;&nbsp;Non-controlling interests | $4897 | $7562 | $8814 |
| Net loss per share - basic & diluted: |  |  |  |
| &nbsp;&nbsp;Continuing operations | $(0.10) | $(0.10) | $(0.13) |
| &nbsp;&nbsp;Discontinued operations | (0.19) | (0.18) | (0.21) |
| Net loss per share - basic & diluted | $(0.29) | $(0.28) | $(0.34) |
| Weighted average number of outstanding common shares - basic & diluted | 301083354 | 291513878 | 279285588 |

---

*The accompanying notes are an integral part of these consolidated financial statements.* 

------

TerrAscend Corp.

**Consolidated Statements of Changes in Shareholders' Equity (Deficit)**

*(Amounts expressed in thousands of United States dollars, except for per share amounts)*

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Number of Shares** | **Number of Shares** | **Number of Shares** | **Number of Shares** | **Number of Shares** |  |  |  |  |  |  |
|  |  |  | **Convertible Preferred Stock** | **Convertible Preferred Stock** |  |  |  |  |  |  |  |
|  | **Common Shares** | **Exchangeable Shares** | **Series A** | **Series B** | **Common Shares Equivalent** | **Treasury Stock** | **Additional paid in capital** | **Accumulated other comprehensive loss** | **Accumulated deficit** | **Non-controlling interest** | **Total** |
| **Balance at December 31, 2022** | **259624531** | **76996538** | **12608** | **600** | **349829273** | **—** | $**934972** | $**2085** | $**(618260)** | $**2374** | $**321171** |
| &nbsp;&nbsp;&nbsp;&nbsp;**Shares issued - stock options, warrant and RSU exercises** | 1913641 |  |  |  | 1913641 |  | 98 |  |  |  | 98 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Shares, options and warrants issued - acquisition** | 5913963 |  |  |  | 5913963 |  | 8601 |  |  |  | 8601 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Shares, options and warrants issued - legal settlement** | 532185 |  |  |  | 532185 |  | 794 |  |  |  | 794 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Warrants issued for services performed** |  |  |  |  |  |  | 1000 |  |  |  | 1000 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Shares issued - conversion** | 13762500 | (13504500) | (258) |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Private placement net of share issuance costs** | 6580677 |  |  |  | 6580677 |  | 7507 |  |  |  | 7507 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Share-based compensation expense** |  |  |  |  |  |  | 7707 |  |  |  | 7707 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Options and warrants expired/forfeited** |  |  |  |  |  |  | (9643) |  | 9643 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Capital distributions** |  |  |  |  |  |  |  |  |  | (11622) | (11622) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Acquisition of non-controlling interest** |  |  |  |  |  |  | (6177) |  |  | (1323) | (7500) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net loss for the period** |  |  |  |  |  |  |  |  | (95545) | 8815 | (86730) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Foreign currency translation adjustment** |  |  |  |  |  |  |  | (286) |  |  | (286) |
| **Balance at December 31, 2023** | **288327497** | **63492038** | **12350** | **600** | **364769739** | **—** | $**944859** | $**1799** | $**(704162)** | $**(1756)** | $**240740** |
| &nbsp;&nbsp;&nbsp;&nbsp;**Shares issued - stock options, warrant and RSU exercises** | 1249216 |  |  |  | 1249216 |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Shares issued - price protection adjustment** | 874730 |  |  |  | 874730 |  | 693 |  |  |  | 693 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Share-based compensation expense** |  |  |  |  |  |  | 9706 |  |  |  | 9706 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Options and warrants expired/forfeited** |  |  |  |  |  |  | (5880) |  | 5880 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Capital distributions** |  |  |  |  |  |  |  |  |  | (7324) | (7324) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Repurchase of common stock, including excise tax** | (107400) |  |  |  | (107400) | (129500) | (215) |  |  |  | (215) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Acquisition of non-controlling interest** | 2888088 |  |  |  | 2888088 |  | 3300 |  |  | 1374 | 4674 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net loss for the period** |  |  |  |  |  |  |  |  | (80232) | 7562 | (72670) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Foreign currency translation adjustment** |  |  |  |  |  |  |  | 1212 |  |  | 1212 |
| **Balance at December 31, 2024** | **293232131** | **63492038** | **12350** | **600** | **369674373** | **(129500)** | $**952463** | $**3011** | $**(778514)** | $**(144)** | $**176816** |
| &nbsp;&nbsp;&nbsp;&nbsp;**Shares issued - stock options, warrant and RSU exercises** | 3659429 |  |  |  | 3659429 |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Shares issued - acquisition** | 4570637 |  |  |  | 4570637 |  | 1278 |  |  |  | 1278 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Shares issued - conversion** | 1625000 |  | (1625) |  | 1625000 |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Shares issued - price protection adjustment** | 6692321 |  |  |  | 6692321 |  | 1903 |  |  |  | 1903 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Share-based compensation expense** |  |  |  |  |  |  | 5007 |  |  |  | 5007 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Capital distributions** |  |  |  |  |  |  |  |  |  | (3237) | (3237) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Derecognition of non-controlling interest** |  |  |  |  |  |  |  |  |  | 20 | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Repurchases of common shares, including excise tax** | (1247000) |  |  |  | (1247000) | 129500 | (410) |  |  |  | (410) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net loss for the period** |  |  |  |  |  |  |  |  | (86228) | 4897 | (81331) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Foreign currency translation adjustment** |  |  |  |  |  |  |  | (1025) |  |  | (1025) |
| **Balance at December 31, 2025** | **308532518** | **63492038** | **10725** | **600** | **384974760** | **—** | $**960241** | $**1986** | $**(864742)** | $**1536** | $**99021** |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

------

TerrAscend Corp.

**Consolidated Statements of Cash Flows**

*(Amounts expressed in thousands of United States dollars, except for per share amounts)* 

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
| **Operating activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Net loss from continuing operations | $(24489) | $(20891) | $(27627) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash provided by operating activities |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accretion and accrued interest | 7945 | 10862 | 9004 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation of property and equipment and amortization of intangible assets | 15621 | 14555 | 14840 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of operating right-of-use assets | 1595 | 1617 | 1263 |
| &nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation | 5007 | 9706 | 7707 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred income tax expense recovery | (532) | 1368 | (10254) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss (gain) on fair value of derivative liabilities | 535 | (4549) | (181) |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized and realized loss on investments | 1365 | 238 | 2604 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss from revaluation of contingent consideration | (1004) | 2465 | (645) |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for expected credit loss (recovery) | 1665 | 3054 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | 1432 | 2096 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized and realized foreign exchange (gain) loss | (687) | 940 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment and other | 2634 | 1249 | 19504 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Receivables | 1646 | (5302) | (8675) |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory | 5946 | 1171 | (4250) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | (4515) | (316) | 9125 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income taxes paid and tax related liabilities | 20498 | 28702 | 39030 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expense and other current assets | (144) | 52 | 1135 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets and liabilities | (592) | (801) | (694) |
| **Net cash provided by operating activities - continuing operations** | 33926 | 46216 | 51888 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities - discontinued operations | (12398) | (8266) | (24417) |
| **Net cash provided by operating activities** | 21528 | 37950 | 27471 |
| **Investing activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment in property and equipment | (8614) | (6866) | (4871) |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment in note receivable, net of interest received | 165 | (1460) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment in intangible assets | (738) | (1187) | (1668) |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash portion of consideration paid in acquisition | (5128) | (250) | (16789) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deposits for business acquisition | (3400) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Success fees related to Alternative Treatment Center license |  |  | (3012) |
| **Net cash used in investing activities - continuing operations** | (17715) | (9763) | (26340) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) investing activities - discontinued operations | 3108 | (2484) | 10121 |
| **Net cash used in investing activities** | (14607) | (12247) | (16219) |
| **Financing activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from loan payable, net of transaction costs | 78944 | 129382 | 23869 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loan principal paid | (70490) | (136996) | (42759) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loan exit fee paid | (233) | (500) | (1178) |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital distributions paid to non-controlling interests | (3237) | (7324) | (11621) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payment for contingent consideration | (386) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments made for financing obligations and finance lease |  | (276) | (55) |
| &nbsp;&nbsp;&nbsp;&nbsp;Repurchases of common shares | (410) | (215) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from private placement, net of share issuance costs |  |  | 20820 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from options exercised |  |  | 98 |
| &nbsp;&nbsp;&nbsp;&nbsp;Employee retention credit |  |  | 7215 |
| **Net cash provided by (used in) financing activities- continuing operations** | 4188 | (15929) | (3611) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities- discontinued operations |  | (8787) | (8889) |
| **Net cash provided by (used in) financing activities** | 4188 | (24716) | (12500) |
| **Net increase (decrease) in cash and cash equivalents and restricted cash during the year** | 11109 | 987 | (1248) |
| Net effects of foreign exchange | (572) | 653 | (168) |
| **Cash and cash equivalents and restricted cash, beginning of the year** | 26987 | 25347 | 26763 |
| **Cash and cash equivalents and restricted cash, end of the year** | $37524 | $26987 | $25347 |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

------

TerrAscend Corp.

**Consolidated Statements of Cash Flows (Continued)**

*(Amounts expressed in thousands of United States dollars, except for per share amounts)* 

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
| **Supplemental disclosure with respect to cash flows** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash paid (received) for Federal income tax, net | $6466 | $(7707) | $(3664) |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash paid (received) for State income tax, net |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;New Jersey | 2805 | 2057 | 200 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Maryland | 1525 | 969 | (35) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pennsylvania | (1105) | (294) | 440 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | (288) | (53) | (221) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total cash paid (received) for income tax, net | $9403 | $(5028) | $(3280) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest paid | $27938 | $23847 | $23037 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease termination fee paid | 2000 | 271 | 379 |
| **Non-cash transactions** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity and warrant liability issued for acquisitions and non-controlling interest | $1278 | $4674 | $8601 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in accrued capital expenditures | (144) | (1098) | 1494 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity issued for price protection on contingent consideration | 1903 | 693 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Warrant issued as consideration for services |  |  | 1000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Debt instrument issued as consideration for acquisitions | 12980 |  | 11689 |
| &nbsp;&nbsp;&nbsp;&nbsp;Shares issued for legal and liability settlement |  |  | 794 |

---

*The accompanying notes are an integral part of these consolidated financial statements.* 

------

**TERRASCEND CORP.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

**1.** **Nature of operations**

TerrAscend Corp. (the "Issuer") was incorporated under the Business Corporations Act (Ontario) on March 7, 2017. The Issuer, through its subsidiaries, TerrAscend Growth Corp. ("TerrAscend") and its subsidiaries (collectively, the "Company"), is a leading North American cannabis company. TerrAscend has vertically-integrated licensed operations in Pennsylvania, New Jersey, Maryland and California. In addition, the Company has retail operations in Ohio and Ontario, Canada with a majority-owned dispensary in Toronto, Ontario, Canada. In the United States, TerrAscend's cultivation and manufacturing provide product selection to both the medical and legal adult-use markets. Notwithstanding the fact that various states in the United States have implemented medical marijuana laws or have otherwise legalized the use of cannabis, the use of cannabis remains illegal under U.S. federal law for any purpose, by way of the Controlled Substances Act of 1970.

The Company operates under one reportable segment, which is the cultivation, production and sale of cannabis products.

The Company owns a portfolio of operating businesses, including:

• TerrAscend New Jersey ("TerrAscend NJ"), a majority-owned operation with four dispensaries, and a cultivation/processing facility;

• TerrAscend Maryland ("TerrAscend MD"), a wholly-owned operation with four dispensaries, and a cultivation/processing facility;

• TerrAscend Pennsylvania ("TerrAscend PA"), a wholly-owned operation with six dispensaries, and a cultivation/processing facility;

• TerrAscend California ("TerrAscend CA"), a wholly-owned operation with four dispensaries, and a cultivation facility;

• TerrAscend Ohio ("TerrAscend OH"), a cannabis retailer in New Philadelphia, Ohio with one wholly-owned dispensary; and;

• TerrAscend Canada Inc. ("TerrAscend Canada"), a cannabis retailer in Ontario, Canada with a majority-owned dispensary in Toronto, Ontario, Canada ("Cookies Canada").

The common shares in the capital of the Company ("Common Shares") commenced trading on the Canadian Securities Exchange ("CSE") on May 3, 2017 under the ticker symbol "TER" and continued trading on the CSE until the listing of the Common Shares on the Toronto Stock Exchange (the "TSX"). Effective July 4, 2023, the Common Shares commenced trading on the TSX under the ticker symbol "TSND". The Common Shares commenced trading on the OTCQX on October 22, 2018 under the ticker symbol "TRSSF", which was subsequently changed to "TSNDF", effective July 6, 2023. The Company's registered office is located at 77 City Centre Drive, Suite 501, Mississauga, Ontario, L5B 1M5, Canada.

**2. Summary of significant accounting policies**

(a) Basis of presentation and measurement and going concern

These consolidated financial statements as of December 31, 2025 and December 31, 2024 and for the years ended December 31, 2025, December 31, 2024, and December 31, 2023 (the "Consolidated Financial Statements") of the Company were prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").

The accompanying Consolidated Financial Statements have been prepared on the going concern basis, under the historical cost convention, except for certain financial instruments that are measured at fair value as described herein.

*Reclassification* 

Certain prior year amounts have been reclassified to conform to the current year presentation. Specifically, (Gain) loss on disposal of fixed assets has been reclassified out of Impairment of property and equipment and right of use assets and into Other operating (expense) income on the Consolidated Statements of Operations and Comprehensive Loss.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

(b) Functional and presentation currency

All operations in the United States have a functional currency of the U.S dollar ("USD"). Canadian operations have a functional currency of Canadian dollars ("CAD"). The Company's presentation currency is in USD. All amounts are presented in USD unless otherwise specified. References to CAD are to Canadian dollars.

(c) Basis of consolidation

These Consolidated Financial Statements include the financial information of the Company. The Company consolidates legal entities in which it holds a controlling financial interest. The Company has a two-tier consolidation model: one focused on voting rights (the voting interest model) and the second focused on a qualitative analysis of power over significant activities and exposure to potentially significant losses or benefits (the variable interest model). All entities are first evaluated to determine whether they are variable interest entities ("VIE"). If an entity is determined not to be a VIE, it is assessed on the basis of voting and other decision-making rights under the voting interest model ("VOE").

<u>Voting Interest Entities</u> 

A VOE is an entity in which (i) the total equity investment at risk is deemed sufficient to absorb the expected losses of the entity, (ii) the at-risk equity holders, as a group, have all of the characteristics of a controlling financial interest and (iii) the entity is structured with substantive voting rights. The Company consolidates its Canadian operations under a VOE model based on the controlling financial interest obtained through Common Shares with substantive voting rights.

<u>Variable Interest Entities</u>

A VIE is an entity that lacks one or more characteristics of a controlling financial interest defined under the voting interest model. The Company consolidates VIE when it has a variable interest that provide it with (i) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance (power) and (ii) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits).

The accounts of the subsidiaries are prepared for the same reporting period using consistent accounting policies. For further information on VIEs, see Note 3.

All intercompany balances and transactions were eliminated on consolidation.

(d) Cash, cash equivalents and restricted cash

Cash and cash equivalents include cash on hand at retail locations, demand deposits with financial institutions and other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and subject to an insignificant risk of change in value. Cash held in money market investments are carried at fair value, cash held in financial institutions and cash held at retail locations have carrying values that approximate fair value. Restricted cash consists of cash held with financial institutions which are subject to certain withdrawal restrictions.

(e) Accounts Receivable

Accounts receivable are recorded net of current expected credit losses. The Company estimates current expected credit losses in accordance with ASC 326, *Financial Instruments - Credit Losses*, based on existing contractual payment terms, actual payment patterns of its customers, and individual customer circumstances.

(f) Inventory

Inventories of harvested and purchased finished goods as well as packaging materials are valued at the lower of cost or net realizable value. Net realizable value is determined as the estimated selling price in the ordinary course of business less the reasonably predictable costs of completion, disposal and transportation. The direct and indirect costs of inventory include materials, labor and depreciation expense on property and equipment involved in packaging, labeling and inspection. Inventories are generally maintained with the weighted average cost method. Amortization of acquired cannabis production licenses as well as royalties paid relating to the production of inventory are also considered to be indirect costs of inventory.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

All direct and indirect costs related to inventory are capitalized as they are incurred and they are subsequently recorded within cost of sales on the Consolidated Statements of Operations and Comprehensive Loss at the time cannabis is sold.

Products for resale and supplies and consumables are valued at the lower of cost or net realizable value. The Company reviews inventory for obsolete, redundant, and slow-moving goods, and any such inventories are written down to net realizable value.

(g) Property and equipment and long-lived assets held for sale

Property and equipment is measured at cost, including capitalized borrowing costs, less accumulated depreciation and impairment losses. Ordinary repairs and maintenance are expensed as incurred. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset using the following terms:

---

| | |
|:---|:---|
| Buildings and improvements | 15-30 years |
| Land | Not depreciated |
| Machinery & equipment | 5-15 years |
| Office furniture & production equipment | 3-5 years |
| Right of use assets | Lease term |
| Assets in process | Not depreciated |

---

Assets in process are transferred to the appropriate asset type when available for use and depreciation of the assets commences at that point.

The Company classifies assets and liabilities (the "disposal group") as held for sale in the period when all of the relevant criteria to be classified as held for sale are met. Long-lived assets held for sale are recorded at the lower of their carrying value or fair value less costs to sell. Any loss resulting from the measurement is recognized in the period during which the held for sale criteria is met. The Company discontinues depreciation on these assets.

An asset's residual value, useful life and depreciation method are reviewed annually, or when events or circumstances indicate that the current estimate or depreciation method are no longer applicable. Changes are adjusted prospectively if appropriate. Gains and losses on disposal of an asset are determined by comparing the proceeds from disposal with the carrying amount of the items and are recognized in the Consolidated Statements of Operations and Comprehensive Loss.

The Company evaluates the recoverability of property and equipment whenever events or changes in circumstances indicate that the carrying value of the asset or asset group may not be recoverable. See – *Impairment of long-lived assets* information within this note for detailed information on the Company's impairment assessment of its property and equipment.

The Company capitalizes interest and borrowing costs on significant qualifying capital construction projects. Upon the asset becoming available for use, capitalization of borrowing costs ceases, and depreciation commences on a straight-line basis over the estimated useful life of the related asset.

(h) Leases

Leases are classified as operating or finance leases based on the terms of the lease agreement and certain characteristics of the identified assets. The majority of the Company's leases are operating leases used primarily for corporate offices, retail dispensaries, and cultivation and manufacturing facilities. The remaining operating lease periods range from 1 to 23 years. Additionally, the Company has no finance leases at December 31, 2025 and December 31, 2024.

The Company's leases include fixed payments, as well as in some cases, scheduled base rent increases over the term of the lease. Certain leases require variable payments of common area maintenance, operating expenses, and real estate taxes applicable to the property. Variable payments are excluded from the measurements of lease liabilities and are expensed as incurred. Any tenant improvement allowances received from the lessor are recorded as a reduction to rent expense over the term of the lease. None of the Company's lease agreements contain residual value guarantees or material restrictive covenants.

The Company determines if an arrangement is a lease at the inception of the contract. Lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term for those arrangements where there is an identified asset and the contract conveys the right to control its use. The right-of-use ("ROU") asset is measured at the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, and initial direct

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

costs. For operating leases, right-of-use assets are reduced over the lease term by the straight-line expense recognized, less the amount of accretion of the lease liability determined by using the effective interest rate ("EIR") method. Finance leases are included in property and equipment in the Company's Consolidated Balance Sheets.

Operating lease expense is recognized on a straight-line basis over the term of the lease and is included in cost of sales and general and administrative expense in the Company's Consolidated Statements of Operations and Comprehensive Loss. Finance lease cost includes amortization, which is recognized on a straight-line basis over the expected life of the lease asset, and interest expense, which is recognized following an EIR method and is included in Finance and other expenses in the Company's Consolidated Statements of Operations and Comprehensive Loss.

The majority of the Company's leases do not provide an implicit rate that can be easily determined. Therefore, the Company applies its incremental borrowing rate to the lease based on the information available at the commencement date (see Note 11).

Certain leases include one or more options to renew or terminate the lease at the Company's discretion. The Company regularly evaluates lease renewal and termination options and, when they are reasonably certain of the exercise of the option to renew or terminate a lease, incorporates the renewal or termination term for accounting purposes.

The Company evaluates its ROU assets for impairment consistent with its impairment of long-lived assets. See – *Impairment of long-lived assets* information within this note for detailed information on the Company's impairment assessment of its right-of-use assets.

In some instances, the Company subleases excess office space to third-party tenants. The Company, as sublessor, continues to account for the head lease. If the lease cost for the term of the sublease exceeds the Company's anticipated sublease income for the same period, this indicates that the ROU asset associated with the head lease should be assessed for impairment under the long-lived asset impairment provisions. Sublease income is included in Finance and other expenses in the Company's Consolidated Statements of Operations and Comprehensive Loss.

The Company accounts for non-lease and lease components to which they relate as a single lease component. Additionally, the Company recognized lease payments under short-term leases with an initial term of twelve months or less, as well as low value assets, as an expense on a straight-line basis over the lease term without recognizing the lease liability and ROU asset.

(i) Goodwill

Goodwill is recorded at the time of acquisition and represents the excess of the aggregate consideration paid for an acquisition over the fair value of the net tangible and intangible assets acquired. Goodwill is not subject to amortization and is tested for impairment on an annual basis or more frequently if events or changes in circumstances indicate that they might be impaired. See – *Impairment of goodwill and intangible assets* information within this note for detailed information on the Company's impairment assessment of its goodwill and intangible assets.

(j) Intangible assets

Intangible assets are recorded at cost less accumulated amortization and impairment losses, if any. Intangible assets acquired in a business combination are measured at fair value at the acquisition date. Amortization is provided on a straight-line basis over the assets' estimated useful lives, which do not exceed the contractual period, if any. The estimated useful lives, residual values and amortization methods are reviewed annually and any changes in estimates are accounted for prospectively. Amortization is calculated on a straight-line basis over the following terms:

---

| | |
|:---|:---|
| Brand intangibles - indefinite lives | Indefinite useful lives |
| Software | 5 years |
| Licenses | 15-30 years |

---

Licenses relating to cultivation and dispensaries are amortized using a useful life consistent with the property and equipment to which they relate.

Intangible assets that have indefinite useful lives, which include brand names, are not subject to amortization but the carrying value is tested for impairment on an annual basis or more frequently if events or changes in circumstances indicate that they

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

may be impaired. See – *Impairment of long-lived assets* information within this note for detailed information on the Company's impairment assessment of its goodwill and intangible assets.

(k) Impairment of indefinite lived intangible assets and goodwill

The Company operates as one reportable segment. For the purposes of testing goodwill, the Company has identified five reporting units. The Company analyzed its reporting units by first reviewing the operating statements based on the jurisdictions in which the Company conducts business (or each market).

Goodwill is reviewed for impairment annually and whenever there are events or changes in circumstances that indicate the carrying amount has been impaired. The Company has the option to first assess qualitative factors to determine whether a quantitative goodwill impairment test is necessary. If the Company concludes it is more likely than not that the fair value of a reporting unit exceeds its carrying value, a quantitative fair value test is performed. If the carrying value of the reporting unit exceeds the estimated fair value, a goodwill impairment charge is recorded. The Company performs its annual impairment tests during the fourth quarter each year, comparing the fair value of each of its reporting units with its carrying amount, inclusive of goodwill. Fair value is estimated using the income approach, a discounted cash flow analysis, and the market approach, when applicable.

Indefinite lived intangible assets are tested for impairment annually or more frequently if events or changes in circumstances between annual tests indicate that the asset may be impaired. Impairment losses on indefinite lived intangible assets are recognized based on a comparison of the fair value of the asset to its carrying value. The Company performs its annual impairment test in the fourth quarter each year in conjunction with its annual assessment of goodwill. The assessment consists of comparing the carrying value of the indefinite lived intangible asset to its estimated fair value, utilizing the relief from royalty method, an income approach valuation.

(l) Impairment of long-lived assets and definite lived intangible assets

The Company evaluates the recoverability of long-lived assets, including property and equipment, ROU assets, and definite lived intangible assets, based on whether events or changes in circumstances indicate that the carrying value of the asset, or asset group, may not be recoverable.

When the Company determines that the carrying value of the long-lived asset may not be recoverable based upon the existence of one or more indicators, the assets are assessed for impairment based on the estimate of future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the undiscounted cash flows are less than the carrying value, the Company measures the fair value of the asset group. In certain circumstances, an appraisal was obtained to determine the fair value of certain long-lived assets. If the carrying value of an asset group exceeds its fair value, an impairment loss is recorded for the excess of the asset group's carrying value over its estimated fair value.

(m) Revenue recognition

Revenue is recognized by the Company in accordance with ASU 2014-09 *Revenue from Contracts with Customers* (Topic 606). The standard requires sales to be recognized in a manner that depicts the transfer of promised goods or services to a customer and at an amount that reflects the consideration expected to be received in exchange for transferring those goods or services. This is achieved by applying the following five steps: i) identify the contract with a customer; ii) identify the performance obligations in the contract; iii) determine the transaction price; iv) allocate the transaction price to the performance obligations in the contract; and v) recognize sales when (or as) the entity satisfies a performance obligation.

Revenues consist of wholesale and retail sales, which are recognized when control of the goods has transferred to the purchaser and the collectability is reasonably assured. This is generally when goods have been delivered, which is also when the performance obligations have been fulfilled under the terms of the related sales contract. Revenue from retail sales of cannabis to customers for a fixed price is recognized when the Company transfers control of the goods to the customer at the point of sale and the customer has accepted and paid for the goods. Revenue for wholesale sales for a fixed price is recognized upon delivery to the customer. Sales are recorded net of returns and discounts and incentives, but inclusive of freight. Payment is typically due upon transferring the goods to the customer or within a specified time period permitted under the Company's credit policy. All shipping and handling activities are performed before the customers obtain control of products and are accounted for as cost of sales.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

From time to time, the Company enters into sales agreements with suppliers pursuant to which it also purchases inventory. As part of the five-step revenue model, the Company assesses whether instances of bulk sales made to suppliers of goods have commercial substance and should be recognized as revenue, or whether they should be assessed under Accounting Standards Codification ("ASC") 845, *Nonmonetary Transactions.* 

Local authorities will often impose excise or cultivation taxes on the sale or production of cannabis products. Excise and cultivation taxes are effectively a production tax which become payable when a cannabis product is delivered to the customer and are not directly related to the value of sales. The Company has made a policy election to exclude from the measurement of transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with the specific revenue-producing transaction and collected by the Company from a customer. Therefore, the net revenue on the Consolidated Statements of Operations and Comprehensive Loss is netted for any excise or cultivation taxes.

(n) Business combinations

The Company accounts for business combinations using the acquisition method when control is obtained by the Company (see Note 2(c)). The Company measures the consideration transferred, the assets acquired, and the liabilities assumed in a business combination at their acquisition-date fair values. Acquisition related costs are recognized as expenses in the periods in which the costs are incurred, and the services are received, except for the costs to issue debt or equity securities which are recognized according to specific requirements. The excess of the consideration transferred to obtain control, over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed, is recognized as goodwill as of the acquisition date.

Contingent consideration for a business combination is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Contingent consideration that is classified as a liability is measured at subsequent reporting dates at fair value with the corresponding gain or loss being recognized in profit or loss.

If the acquiree's former owners contractually indemnify the Company for a particular uncertainty, an indemnification asset is recognized on a basis that matches the indemnified item, subject to the contractual provisions or any collectability considerations.

(o) Non-controlling interests

Non-controlling interests ("NCI") represents equity interests owned by outside parties. NCI is initially measured at fair value as of the acquisition date (see Note 2(y)(vii)).

(p) Income taxes

Income tax expense, consisting of current and deferred tax expense, is recognized in the Consolidated Statements of Operations and Comprehensive Loss. Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted at period-end, adjusted for amendments to tax payable with regard to previous years. Deferred tax assets and liabilities and the related deferred income tax expense or recovery are recognized for deferred tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply when the asset is realized, or the liability settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income (loss) in the period that enactment occurs. A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. To the extent that the Company does not consider it more likely than not that a deferred tax asset will be recovered, the deferred tax asset is reduced. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

The Internal Revenue Service (the "IRS") has taken the position that cannabis companies are subject to the limits of Section 280E of the Internal Revenue Code of 1986, as amended (the "Code"), under which they are only allowed to deduct expenses directly related to the cost of producing the products or cost of production. The Company has taken the position that it does not owe taxes attributable to the application of Section 280E the Code. This position is treated as an unrecognized tax benefit, and is recorded on the Consolidated Balance Sheets as a liability on uncertain tax position.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

(q) Share capital

*Common Shares*

Common Shares are classified as equity. The proceeds from the exercise of stock options and warrants are recorded as share capital. Incremental costs directly attributable to the issuance of Common Shares are recognized as a deduction from equity.

*Equity units*

Equity units are comprised of Common Shares and one-half warrants. Warrants issued during the year are classified as liabilities. The proceeds are allocated first to warrants based on their fair value, measured using the Black-Scholes Option Pricing Model (the "Black-Scholes Model"), and the residual is allocated to Common Shares.

*Treasury Stock*

Repurchases of Common Shares are accounted for at cost and are included as a component of shareholders' equity in the Consolidated Balance Sheets. The Common Shares are then canceled in subsequent transactions.

(r) Share-based compensation

The Company has a stock option plan in place (the "Stock Option Plan"). The Company measures equity settled share-based payments based on their fair value at the grant date and recognizes compensation expense on a straight-line basis over the vesting period. Fair value is measured using the Black-Scholes Model. In estimating fair value, management is required to make certain assumptions and estimates such as the expected term of the award, volatility of the future price of the Common Shares, risk free rates, and future dividend yields at the initial grant date. Changes in assumptions used to estimate fair value could result in materially different results. Forfeitures are accounted for as they occur rather than estimating for them at the grant date.

Upon exercise of stock options and warrants that are classified as equity, any historical fair value in the warrants and share-based compensation reserve is allocated to additional paid in capital.

The fair value of restricted share units is based on the closing price of the Company's stock as of the grant date. Compensation expense is recognized on a straight-line basis, by amortizing the grant date fair value over the vesting period.

(s) Convertible instruments

The Company issues convertible debt instruments to raise capital for reasons such as business acquisitions and supporting general corporate needs. The debt component of convertible instruments is recorded at its amortized cost using the EIR method. Accretion expense is recognized over the contractual term of the instrument based on the effective yield, which reflects the amortization of any discounts, premiums, and debt issuance costs. Convertible debt may contain embedded features that require bifurcation as derivative liabilities, see Note 2v.

(t) Convertible preferred stock and detachable warrants

The Company evaluates convertible preferred stock in accordance with ASC 470-20-35-7, *Debt with Conversion and Other Options*. The preferred shares in the capital of the Company (the "Preferred Shares") are convertible into Common Shares at a conversion ratio of one Preferred Share for 1,000 Common Shares. All series of Preferred Shares are classified as shareholders' equity in the Company's Consolidated Balance Sheets. The fair value of the related Preferred Shares is based on the closing price of the Common Shares on the day of issuance of the Preferred Shares.

Included in the issuance were detachable warrants to purchase Preferred Shares. The detachable purchase warrants were evaluated for equity or liability classification and were determined to meet liability classification. The warrants are legally detachable and separately exercisable from the Preferred Shares.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

(u) Warrant liability

The Company may issue Common Share warrants with debt, equity or as a standalone financing instrument that is recorded as either liabilities or equity in accordance with the respective accounting guidance. Warrants recorded as equity are recorded at their relative fair value determined at the issuance date and remeasurement is not required. Warrants recorded as liabilities are recorded at their fair value, within warrant liability on the Consolidated Balance Sheets, and remeasured on each reporting date with changes recorded in the Company's Consolidated Statements of Operations and Comprehensive Loss.

(v) Embedded derivative liabilities

The Company evaluates its financial instruments to determine if those instruments or any embedded components of those instruments qualify as derivatives that need to be separately accounted for in accordance with ASC 815, *Derivatives and Hedging*. Embedded derivatives satisfying certain criteria are recorded at fair value at issuance and marked-to-market at each balance sheet date with the change in the fair value recorded as income or expense. In addition, upon the occurrence of an event that requires the derivative liability to be reclassified to equity, the derivative liability is revalued to fair value at that date.

(w) Loss per share

The Company presents basic and diluted loss per share data for its ordinary shares. Basic loss per share is calculated using the treasury stock method, by dividing the loss attributable to holders of Common Shares and proportionate voting shares in the capital of the Company ("Proportionate Voting Shares") by the weighted average number of Common Shares and Proportionate Voting Shares outstanding during the period. Contingently issuable shares (including shares held in escrow) are not considered outstanding Common Shares and consequently are not included in the loss per share calculations. The Company has the following categories of potentially dilutive Common Share equivalents: RSUs (as defined below), stock options, warrants, Preferred Shares, non-participating non-voting exchangeable shares in the capital of the Company ("Exchangeable Shares") and convertible debentures.

In order to determine diluted loss per share, it is assumed that any proceeds from the exercise of dilutive instruments would be used to repurchase Common Shares at the average market price during the period. The Company also considers all outstanding convertible securities, such as the Preferred Shares, convertible debentures, and outstanding Exchangeable Shares as if such instruments were converted into Common Shares.

Diluted loss per share is determined by adjusting the loss attributable to common shareholders and the weighted average number of Common Shares and Proportionate Voting Shares outstanding, adjusted for the effects of all dilutive potential Common Shares and Proportionate Voting Shares. Proportionate Voting Shares are converted to their Common Share equivalent of one thousand Common Shares for every one Proportionate Voting Share for the purposes of calculating basic and diluted loss per share. In a period of losses, all of the potentially dilutive Common Share equivalents are excluded in the determination of dilutive net loss per share because their effect is antidilutive. During the years ended December 31, 2025, December 31, 2024 and December 31, 2023, no potentially dilutive Common Share equivalents were included in the computation of diluted loss per share because their impact would have been anti-dilutive.

(x) Discontinued operations

The Company deems it appropriate to classify a part of the business as discontinued operations if the related disposal group meets all of the following criteria: (i) the disposal group is a component of the Company, (ii) the component meets the held-for-sale criteria, and (iii) the disposal of the component represents a strategic shift that has a major effect on the Company's operations and financial results. A disposal group that represents a strategic shift to the Company is reflected as discontinued operations on the Consolidated Statements of Operations and Comprehensive Loss and prior year figures are recast to reflect the earnings or losses as income from discontinued operations.

During the year ended December 31, 2025, the Company committed to a plan to exit the Michigan market. The Company remains engaged in an active program to sell the assets of the Michigan business, which is expected to be substantially completed by the end of the first half of 2026.

The Company determined that its plan to exit the Michigan market is a strategic shift that will have a major effect on the Company's operations and financial results and met the criteria for classification as discontinued operations. As a result, the assets and liabilities of TerrAscend Michigan ("TerrAscend MI") are presented as held for sale in accordance with ASC

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

360-10, Impairment or Disposal of Long Lived Assets ("ASC 360-10") in the Consolidated Balance Sheets of the Company, the operating results are presented as discontinued operations in the Consolidated Statements of Operations and Comprehensive Loss of the Company, and net cash used is presented as discontinued operations in the Statements of Cash Flows of the Company. The Company's assets to be disposed of and for which there is a committed plan of disposal are classified as assets held for sale and at the lower of carrying value or fair value, less costs to sell.

Prior year amounts have been retrospectively adjusted to conform to the current year presentation. Certain prior year amounts, primarily related to discontinued operations, have been reclassified in the Consolidated Financial Statements and accompanying notes to conform to the current year presentation. Unless otherwise noted, amounts and disclosures throughout these notes to the Consolidated Financial Statements relate solely to continuing operations and exclude all discontinued operations.

(y) Use of significant estimates and judgments

The preparation of the Company's Consolidated Financial Statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Management has applied significant estimates and judgments related to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i)*Inventory*

The determination of net realizable value requires significant judgment, including consideration of factors such as shrinkage, the aging of and future demand for inventory, expected future selling price the Company expects to realize by selling the inventory, and the contractual arrangements with customers. Reserves for excess and obsolete inventory are based upon quantities on hand, projected volumes from demand forecasts and net realizable value. The future realization of these inventories may be affected by market-driven changes that may reduce future selling prices. A change to these assumptions could impact the Company's inventory valuation and gross profit.

The impact of inventory reserves is reflected in cost of sales.

ii)*Share-based payments*

In calculating share-based compensation expense, key estimates are used such as the expected term of the award, the volatility of the Company's stock price, and the risk-free interest rate.

iii)*Derivative liabilities and contingent consideration*

The Company calculates the fair value of derivative liabilities and contingent considerations from business combinations using key estimates, including stock price volatility and the risk-free interest rate. The Company exercises judgment in selecting valuation methods and performing fair value calculations, both at the initial measurement upon issuance or acquisition and during subsequent recurring remeasurements.

iv)*Income taxes*

The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Company generating future taxable income against which the deferred tax assets can be utilized. In addition, significant judgment is required in classifying transactions and assessing probable outcomes of tax positions taken, and in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions.

Provisions for taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of the reporting period. It is possible, however, that at some future date, an additional liability could result from audits by taxing authorities.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v)*Impairment of goodwill, intangible assets, and long-lived assets*

The Company assesses goodwill and indefinite-lived intangible assets for impairment annually, while definite-lived intangible assets and long-lived assets are evaluated whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. The Company's impairment loss calculation contains significant estimates and assumptions while applying judgment to qualitative factors as well as estimating future cash flows and asset fair values, including forecasting projected financial information and selecting the discount rate that reflects the risk inherent in future cash flows.

Certain significant estimates and assumptions include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Cash flows: estimated cash flows are projected based on actual operating results from internal sources, as well as industry and market trends. The forecasts are extended through a discrete projection period, after which a terminal value was applied to reflect the remaining economic useful life of the reporting units and asset groups;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Royalty rate: estimated royalty rate is projected based on industry and market trends.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Post-tax discount rate: the post-tax discount rate is reflective of the weighted average cost of capital ("WACC"). The WACC is estimated based on the risk-free rate, equity risk premium, beta premium, and after-tax cost of debt based on corporate bond yields; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Tax rate: the tax rates used in determining future cash flows are those substantively enacted at the respective valuation date.

vi)*Business combinations* 

Classification of an acquisition as a business combination or an asset acquisition depends on whether the asset acquired constitutes a business, which can be a complex judgment. The Company has determined that its acquisitions in Note 5 are business combinations under ASC, 805 *Business Combinations*.

In a business combination, substantially all identifiable assets, liabilities and contingent liabilities acquired are recorded at the date of acquisition at their respective fair values. One of the most significant areas of judgment and estimation relates to the determination of the fair value of these assets and liabilities, including the fair value of contingent consideration, if applicable. If any intangible assets are identified, depending on the type of intangible asset and the complexity of determining its fair value, the Company may utilize an independent external valuation expert to develop the fair value, using appropriate valuation techniques, which are generally based on a forecast of the total expected future net cash flows. These valuations are linked closely to the assumptions made by management regarding the future performance of the assets concerned and any changes in the discount rate applied.

vii)*Incremental borrowing rates*

Lease payments are discounted using the rate implicit in the lease if that rate is readily available. If that rate cannot be easily determined, the lessee is required to use its incremental borrowing rate. The incremental borrowing rate is the rate of interest that the Company estimates it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The Company calculates its incremental borrowing rate as the interest rate the Company would pay to borrow funds necessary to obtain an asset of similar value over similar terms taking into consideration the economic factors and the credit risk rating at the commencement date of the lease.

viii)*Variable Interest Entity*

The Company consolidates legal entities in which it holds a controlling financial interest. Determining whether it has a controlling financial interest in VIE is subject to significant judgment and estimates. There is inherent uncertainty in evaluating who has the power to direct the activities of the VIE that most significantly impact the entity's economic performance. The Company's considerations include, but are not limited to, voting interests of the VIE, management, service and other agreements with the VIE, involvement in the VIE's initial design and the

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

existence of explicit or implicit financial guarantees. Management has applied significant judgment when evaluating the facts and circumstances of the VIE (see Note 3).

ix)*Current Expected Credit Losses*

The allowance for credit losses represents management's estimate of expected credit losses over the contractual life of the Company's trade receivables. Determining the adequacy of the allowance is complex and requires significant judgment regarding customer creditworthiness, historical collection experience, current economic conditions, and reasonable and supportable forecasts. Changes in customer financial performance or economic conditions could result in material changes to the allowance in future periods.

(z) New standards, amendments and interpretations adopted

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-09, *Income Taxes* (Topic 740): Improvements to Income Tax Disclosures, which requires, among other things, additional disclosures primarily related to the income tax rate reconciliation and income taxes paid. The expanded annual disclosures is effective for the financial year ending December 31, 2025 and will be applied retrospectively to all prior periods presented. The Company adopted this standard during the year ended December 31, 2025, see Note 17.

(aa) New standards, amendments and interpretations not yet adopted

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Loss – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, a new accounting standard to improve the disclosures about an entity's expenses and address requests from investors for more detailed information about the types of expenses included in commonly presented expense captions. The new standard will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with retrospective application permitted. The Company is currently evaluating the impact of ASU 2024-03 on its Consolidated Financial Statements; however, the Company does not expect the adoption of ASU 2024-03 to have a material impact on its Consolidated Financial Statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)In July 2025, the FASB issued Accounting Standards Update (ASU) 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This accounting pronouncement provides all entities with a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the assets when measuring credit losses. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025. The Company is currently evaluating the impact of ASU 2025-05 on its Consolidated Financial Statements; however, the Company does not expect the adoption of ASU 2025-05 to have a material impact on its Consolidated Financial Statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The standard improves the navigability of interim disclosures, clarifies when Topic 270 applies and provides additional interim disclosure guidance, including a principle to disclose material events since the most recent annual reporting period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. The standard is effective for the Company beginning January 1, 2028, with early adoption permitted, and may be applied prospectively or retrospectively. The Company is currently evaluating the impact of ASU 2025-11 on its Consolidated Financial Statements; however, the Company does not expect the adoption of ASU 2025-11 to have a material impact on its Consolidated Financial Statements.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

**3. Consolidation**

The Company consolidates entities in which it has a controlling financial interest by evaluating whether the entity is a VOE or VIE.

In connection with the listing of its Common Shares on the TSX, the Company undertook a strategic reorganization of its ownership structure (the "2023 Reorganization") to align with TSX regulatory requirements regarding U.S. based operations, in accordance with the TSX's Staff Notice 2017-0009. Specifically, the 2023 Reorganization was designed to segregate the Company's Canadian retail operations from TerrAscend's cultivation and manufacturing operations in the United States. Following the completion of the 2023 Reorganization, the Company holds a 95% equity interest in its Canadian retail business and maintains a variable interest in TerrAscend's U.S. operations, which are consolidated through a VIE model. The Company continues to consolidate both operations under two distinct consolidation models in accordance with ASC 810, Consolidation ("ASC 810").

<u>Voting Interest Entities</u>

A VOE is an entity in which (1) the total equity investment at risk is deemed sufficient to absorb the expected losses of the entity, (2) the at-risk equity holders, as a group, have all of the characteristics of a controlling financial interest and (3) the entity is structured with substantive voting rights. The Company consolidates the Canadian operations under a VOE model based on the controlling financial interest obtained through Common Shares with substantive voting rights.

The Company's Canadian retail operations are conducted through a subsidiary that is 95% owned by TerrAscend Canada, a wholly owned subsidiary of the Issuer. These operations are consolidated under the VOE model based on the controlling financial interest obtained through Common Shares with substantive voting rights. The remaining Canadian subsidiaries are either wholly owned or majority owned, and are not currently engaged in active operations.

<u>Variable Interest Entities</u>

A VIE is an entity that lacks one or more characteristics of a controlling financial interest defined under the voting interest model. The Company consolidates VIE when it has a variable interest that provide it with (1) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits).

In connection with the 2023 Reorganization, TerrAscend issued and sold, on a private placement basis, Class A shares in the capital of TerrAscend ("Class A Shares") for aggregate gross proceeds of $1,000 to an investor ("Investment"). See Note 10 for accounting treatment of the Class A Shares. Following the closing of the Investment, the Class B shares ("Class B Shares") in the capital of TerrAscend held by the Company, representing all of the issued and outstanding Class B Shares, were automatically exchanged for non-voting, non-participating exchangeable shares in the capital of TerrAscend ("Non-Voting Shares"), representing approximately 99.8% of the issued and outstanding shares of TerrAscend on an as-converted basis. As a result of the limited rights associated with Non-Voting Shares that the Company holds following the closing of the Investment, the Company and TerrAscend entered into a protection agreement dated April 18, 2023 ("Protection Agreement"). The Protection Agreement provides for certain negative covenants in order to preserve the value of the Non-Voting Shares until such time as the Non-Voting Shares are converted into Class A Shares.

The Issuer determined that TerrAscend is a VIE, as all of the Company's U.S. activities continue to be conducted on behalf of the Company which has disproportionately few voting rights. After conducting an analysis of the following VIE factors; purpose and design of the VIE, the Protection Agreement in place, the structure of the Company's board of directors (the "Board"), and substantive kick-out rights of the holders of the Class A Shares, it was determined that the Company has the power to direct the activities of TerrAscend. In addition, given the structure of the Class A Shares where all of the losses and substantially all of the benefits of TerrAscend are absorbed by the Company, the Company consolidates as the primary beneficiary in accordance with ASC 810. Although the Company does not currently hold Class A Shares, the Non-Voting Shares are exchangeable at the Company's discretion and represent substantially all of the economic interest in the VIE. The investor's Class A Shares provide only a fixed annual return and do not participate in the residual economics of the VIE, in accordance with the Protection Agreement, which supports the Company's conclusion that it is the primary beneficiary of TerrAscend.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

The Company's U.S. operations are consolidated through the VIE model. Therefore, substantially all of the Company's current assets, non-current assets, current liabilities and non-current liabilities are consolidated through the VIE model.

**4. Accounts receivable, net**

The following table presents the Company's accounts receivable balances, including the allowance for credit losses:

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| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | **(In thousands)** | **(In thousands)** |
| Trade receivables | $16962 | $19002 |
| Sales tax receivable | 1156 | 970 |
| Other receivables | 599 | 563 |
| Provision for current expected credit losses | (1819) | (311) |
| **Total receivables, net** | $**16898** | $**20224** |

---

The following table presents the aging of trade receivables, including the allowance for credit losses:

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| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | **(In thousands)** | **(In thousands)** |
| Trade receivables | $16962 | $19002 |
| Less: provision for current expected credit losses | (1819) | (311) |
| **Total trade receivables, net** | $**15143** | $**18691** |
| Of which |  |  |
| &nbsp;&nbsp;Current | 12214 | 11211 |
| &nbsp;&nbsp;31-90 days | 1761 | 3998 |
| &nbsp;&nbsp;Over 90 days | 2987 | 3793 |
| &nbsp;&nbsp;Less: current expected credit losses | (1819) | (311) |
| **Total trade receivables, net** | $**15143** | $**18691** |

---

The following is a roll-forward of the provision for expected credit losses and sales returns and allowances related to trade accounts receivable:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | **(In thousands)** | **(In thousands)** |
| Beginning of the year | $311 | $303 |
| Provision for sales returns | 15 |  |
| Expected credit losses | 1665 | 31 |
| Write-offs charged against provision | (172) | (23) |
| **Total provision for current expected credit losses** | $**1819** | **311** |

---

**5. Acquisitions**

*2025 Acquisitions*

<u>Ratio Cannabis</u>

On May 6, 2025 ("Ratio Acquisition Date"), the Company completed the acquisition of certain assets of Ratio Cannabis, LLC, a licensed cannabis operator, to expand its operational footprint to include Ohio. The total fair value consideration transferred

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

in connection with the acquisition was $10,103. The fair value consideration was comprised of: (i) $5,261 in cash, (ii) a $3,564 secured promissory note bearing interest at a rate of 6.00% and maturing on May 6, 2027, and (iii) 4,570,637 Common Shares (the Ratio Share Consideration") valued at $1,278 using the trading price of the Common Shares on the Ratio Acquisition Date less the applicable share restriction discount, as described below, of 30%.

The Ratio Share Consideration was subject to a statutory holding period restriction of six months, and therefore, a share restriction discount was considered in determining the fair value of the Ratio Share Consideration on the date of issuance, using an option pricing model.

The following table represents the fair value of assets acquired and liabilities assumed as of the Ratio Acquisition Date and allocation of the consideration to net assets acquired:

---

| | |
|:---|:---|
|  | **(In thousands)** |
| Cash and cash equivalents | $133 |
| Accounts receivable | 58 |
| Inventory | 317 |
| Prepaid expenses and other current assets | 54 |
| Intangible assets | 6700 |
| Goodwill | 2841 |
| **Net assets acquired** | $**10103** |
| Consideration paid in cash | $5261 |
| Promissory note payable | 3564 |
| Common shares of TerrAscend | 1278 |
| **Total consideration** | $**10103** |

---

The acquired intangible assets include a license, which is treated as a definite lived intangible asset and amortized over a 15-year period.

The consideration paid reflected the synergies, economies of scale, and workforce. These benefits were not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. None of the goodwill recognized is expected to be deductible for income tax purposes.

Costs related to this transaction were $122, including legal, accounting, due diligence, and other transaction-related expenses and were recorded during the year ended December 31, 2025.

On a standalone basis, had the Company acquired the business on January 1, 2025, sales estimates would have been $7,652 for the year ended December 31, 2025 and net income estimates would have been $1,738. Actual sales and net income since the Ratio Acquisition Date are $4,934 and $664, respectively.

*Other*

On December 26, 2025, the Company issued $9,000 of convertible notes in exchange for an option to purchase a 35% interest in Union Chill (the "Union Chill Option"). The Company is required to pay an additional $4,000 upon exercise of the Union Chill Option. As the Company was required to exercise the option by May 2026, the $4,000 was recorded in accounts payable and accrued liabilities. The 35% option was initially recorded at its fair value of $13,000, with no material change recognized upon remeasurement as of December 31, 2025. The Union Chill Option is included in other non-current assets in the Consolidated Balance Sheets. For additional information regarding the convertible notes, see Note 12.

On December 10, 2025, the Company paid a refundable deposit of $3,400 in connection with a potential acquisition. The deposit is included in Other current assets in the Consolidated Balance Sheets.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

*Contingent consideration*

Contingent consideration recorded relates to the Company's business acquisitions. Contingent consideration is based upon the potential earnout of the underlying business unit and is measured at fair value using a projection model for the business and the formulaic structure for determining the consideration under the terms of the agreement.

The balance of contingent consideration is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **State Flower** | **Apothecarium** | **Peninsula** | **Total** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| **Carrying amount, December 31, 2023** | $**1406** | $**3028** | $**2012** | $**6446** |
| Settlement of contingent consideration | (1334) | (3591) |  | (4925) |
| Payments of contingent consideration | (188) | (505) |  | (1443) |
| Loss (gain) on revaluation of contingent consideration | 903 | 3188 | (1626) | 2465 |
| **Carrying amount, December 31, 2024** | $**787** | $**2120** | $**386** | $**3293** |
| Settlement of contingent consideration |  |  | (386) | (386) |
| Payments of contingent consideration | (532) | (1371) |  | (1903) |
| Gain on revaluation of contingent consideration | (255) | (749) |  | (1004) |
| **Carrying amount, December 31, 2025** | $**—** | $**—** | $**—** | $**—** |

---

<u>State Flower and Apothecarium</u>

On January 19, 2024, the Company amended the original purchase agreement and issued an aggregate of 2,888,088 Common Shares and paid $250 of cash to the sellers of its previously acquired State Flower and The Apothecarium businesses. The issuance of Common Shares fully settled the previous contingent consideration balances. The remaining balance owing relates to a price protection the Company provided on the Common Shares issued.

In accordance with the price protection clause, the Company issued additional Common Shares on September 13, 2024, June 2, 2025, and September 19, 2025, for an aggregate of 9,176,140 Common Shares. On October 17, 2025, the Company canceled 1,609,089 Common Shares as a result of certain clawback provisions. As a result of the issuances, the cancellation, and the proximity to expiration of the price protection, the estimated fair value of the contingent consideration liability was reduced to $nil as of December 31, 2025.

Subsequent to the year end the price protection clause expired with no additional payouts.

<u>Peninsula</u>

On December 28, 2024 the Company settled its contingent consideration associated with the Peninsula acquisition in the amount of $386. This amount was paid subsequent to the year end. In connection with the settlement, management recognized a gain on revaluation of contingent consideration in the amount of $1,626 on the consolidated statements of operations and comprehensive loss.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

**6. Inventory**

The Company's inventory of dry cannabis and oil includes both purchased and internally produced inventory. The Company's inventory is comprised of the following items:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | **(In thousands)** | **(In thousands)** |
| Raw materials | $753 | $400 |
| Finished goods | 15514 | 16182 |
| Work in process | 15535 | 21548 |
| Accessories, supplies and consumables | 2252 | 1542 |
| Total inventory | $34054 | $39672 |

---

**7. Discontinued operations**

*TerrAscend Michigan*

During the year ended December 31, 2025, the Company committed to a plan to exit the Michigan market. The Company received approval from the Board, together with TerrAscend Corp.'s consolidated entities. As of December 31, 2025, the Company remains engaged in an active program to sell the remaining assets of TerrAscend MI, which is expected to be substantially completed by the end of the first half of 2026. The Company determined that its decision to exit the Michigan market is considered a strategic shift that will have a major effect on the Company's operations and financial results and met the criteria for classification as discontinued operations.

The total amount of costs expected to be incurred in connection with the Michigan exit is between $1,050 to $1,200 in cash expenditures for employee transition, notice period and severance payments, and employee benefits ("restructuring costs"). Total cumulative restructuring costs are $606 as of December 31, 2025.

ASC 360-10 requires a held-for-sale disposal group to be measured at the lower of its carrying amount and fair value less cost to sell. The Company adjusted the carrying amount of the fixed assets in the disposal group within the scope of ASC 360-10 relating to certain buildings, equipment, and leasehold improvements. During the year ended December 31, 2025, the Company recognized impairment loss of $41,271. The fair value of the disposal groups was primarily determined based on actual closing prices or purchase offers from market participants. An estimated cost to sell of 4% was used in the valuations. The impairments were primarily attributable to the Company's expedited sales strategy, constructions in process that will no longer be completed, and the continued increase of competition in the Michigan market.

During the year ended December 31, 2025, the Company recognized an inventory impairment charge of $4,551, recorded in cost of goods sold, to reduce the carrying value of certain inventory items to their net realizable value. The impairment charge was primarily related to inventory designated for sale below cost or destruction of inventory.

During the year ended December 31, 2025, the Company reassessed certain assets previously included in the Michigan disposal group. Based on market conditions and the absence of prospective buyers at acceptable pricing, management determined that a sale of one owned property ("Monitor") was no longer probable within one year. The Company entered into a sublease arrangement on November 1, 2025 for Monitor, which will generate ongoing rental income. As a result, this property no longer met the criteria for classification as held for sale and was removed from the disposal group. The asset is now included within the Company's continuing operations. The reclassification did not change management's conclusion that the exit of Michigan operations represents a strategic shift and continues to qualify for discontinued operations presentation. There was no gain or loss recognized upon the reclassification of Monitor.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

The following table summarizes the major classes of assets and liabilities of TerrAscend MI as of December 31, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | **(In thousands)** | **(In thousands)** |
| **Current assets from discontinued operations** |  |  |
| &nbsp;&nbsp;Accounts receivable, net | $39 | $656 |
| &nbsp;&nbsp;Inventory |  | 9128 |
| &nbsp;&nbsp;Prepaid expenses and other current assets | 454 | 918 |
| &nbsp;&nbsp;Property and equipment, net | 6222 | 59854 |
| &nbsp;&nbsp;Operating lease right of use assets | 5998 | 12600 |
| **Total current assets from discontinued operations** | $**12713** | $**83156** |
| **Current liabilities from discontinued operations** |  |  |
| &nbsp;&nbsp;Accounts payable and accrued liabilities | $3636 | $6376 |
| &nbsp;&nbsp;Deferred revenue |  | 1554 |
| &nbsp;&nbsp;Operating lease liability | 6342 | 12994 |
| &nbsp;&nbsp;Finance lease liability | 1923 | 1864 |
| &nbsp;&nbsp;Other liabilities | 715 | 1510 |
| **Total current liabilities from discontinued operations** | $**12616** | $**24298** |

---

The results of operations for the discontinued operations includes revenues and expenses directly attributable to the disposed of operations. Corporate and administrative expenses, including interest expense, not directly attributable to the operations were not allocated to discontinued operations.

The results of discontinued operations were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| **Revenue, net** | $**18313** | $**38599** | $**66819** |
| **Cost of Sales** | **19890** | **24507** | **45138** |
| **Gross profit** | **(1577)** | **14092** | **21681** |
| **Operating expenses:** |  |  |  |
| &nbsp;&nbsp;General and administrative | 15608 | 20971 | 32543 |
| &nbsp;&nbsp;Amortization and depreciation | 1040 | 3749 | 3725 |
| &nbsp;&nbsp;Impairment of property and equipment | 41271 | 6073 | 4769 |
| &nbsp;&nbsp;Impairment of intangible assets |  | 39334 | 35785 |
| &nbsp;&nbsp;Other operating expense (income) | 2013 | (9) | (1559) |
| **Total operating expenses** | **59932** | **70118** | **75263** |
| **Other expense (income)** |  |  |  |
| &nbsp;&nbsp;Finance and other expenses | 196 | 449 | 5453 |
| **(Loss) income from discontinued operations before provision for income taxes** | **(61705)** | **(56475)** | **(59035)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Benefit) provision for income taxes | (4863) | (4696) | 68 |
| **Net (loss) income from discontinued operations, net of tax** | $**(56842)** | $**(51779)** | $**(59103)** |

---

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

**8. Property and equipment, net**

Property and equipment consisted of:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | **(In thousands)** | **(In thousands)** |
| Land | $3580 | $3235 |
| Assets in process | 289 | 1956 |
| Buildings & improvements | 138443 | 123568 |
| Machinery & equipment | 25338 | 24662 |
| Office furniture & equipment | 4710 | 4282 |
| Total cost | 172360 | 157703 |
| Less: accumulated depreciation | (42428) | (33538) |
| Property and equipment, net | $129932 | $124165 |

---

Assets in process represent construction in progress related to both cultivation and dispensary facilities not yet completed, or otherwise not placed in service.

During the years ended December 31, 2025, and December 31, 2024, borrowing costs were not capitalized because the assets in process did not meet the criteria of a qualifying asset.

Depreciation expense was $9,141 ($7,577 included in cost of sales) for the year ended December 31, 2025, $8,954 (7,285 included in cost of sales) for the year ended December 31, 2024, and $8,097 ($6,911 included in cost of sales) for the year ended December 31, 2023.

*Impairment of Property and Equipment*

The impairment test for property and equipment follows the same criteria as finite-lived intangible assets (see Note 9) with the exception of obtaining independent appraisals for certain properties to determine the fair value of the asset groups. During the years ended December 31, 2024, the Company determined that the carrying value of the certain assets may not be recoverable. As a result, the Company recorded an impairment loss of $2,438 for certain California properties during the year ended December 31, 2024. This impairment was primarily due to the closure of one of its California retail stores.

**9. Intangible assets, net and goodwill**

Intangible assets consisted of the following:

---

| | | | |
|:---|:---|:---|:---|
| **At December 31, 2025** | **Gross Carrying Amount** | **Accumulated Amortization** | **Net Carrying Amount** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| *Definite lived intangible assets* |  |  |  |
| &nbsp;&nbsp; Software | $2797 | $(1730) | $1067 |
| &nbsp;&nbsp; Licenses | 172906 | (30085) | 142821 |
| &nbsp;&nbsp; Non-compete agreements | 280 | (280) |  |
| Total definite lived intangible assets | 175983 | (32095) | 143888 |
| *Indefinite lived intangible assets* |  |  |  |
| &nbsp;&nbsp; Brand intangibles | 23422 |  | 23422 |
| Total indefinite lived intangible assets | 23422 |  | 23422 |
| **Intangible assets, net** | $**199405** | $**(32095)** | $**167310** |

---

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

---

| | | | |
|:---|:---|:---|:---|
| **At December 31, 2024** | **Gross Carrying Amount** | **Accumulated Amortization** | **Net Carrying Amount** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| *Definite lived intangible assets* |  |  |  |
| &nbsp;&nbsp; Software | $2708 | $(964) | $1744 |
| &nbsp;&nbsp; Licenses | 167459 | (24371) | 143088 |
| &nbsp;&nbsp; Non-compete agreements | 280 | (280) |  |
| Total definite lived intangible assets | 170447 | (25615) | 144832 |
| *Indefinite lived intangible assets* |  |  |  |
| &nbsp;&nbsp; Brand intangibles | 24772 |  | 24772 |
| Total indefinite lived intangible assets | 24772 |  | 24772 |
| **Intangible assets, net** | $**195219** | $**(25615)** | $**169604** |

---

Amortization expense was $6,472 ($2,639 included in cost of sales) for the year ended December 31, 2025, $6,230 ($2,832 included in cost of sales) for the year ended December 31, 2024, and $7,518 ($2,900 included in cost of sales) for the year ended December 31, 2023.

Estimated future amortization expense for finite lived intangible assets for the next five years is as follows:

---

| | |
|:---|:---|
|  | **(In thousands)** |
| 2026 | $6594 |
| 2027 | 6515 |
| 2028 | 6464 |
| 2029 | 6350 |
| 2030 | 5841 |
| Thereafter | 112124 |
| Total | $143888 |

---

As of December 31, 2025, the weighted average amortization period remaining on intangible assets was 24.4 years.

The following table summarizes the activity in the Company's goodwill balance:

---

| | |
|:---|:---|
|  | **(In thousands)** |
| **Balance at December 31, 2023** | $106929 |
| Additions at acquisition date |  |
| **Balance at December 31, 2024** | $106929 |
| Additions at acquisition date | 2841 |
| **Balance at December 31, 2025** | $109770 |

---

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

*Impairment of indefinite-lived and definite-lived intangible assets*

The Company recorded the following impairment losses by category of intangible assets:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| *Definite lived intangible assets* |  |  |  |
| &nbsp;&nbsp; Licenses | $1256 | $— | $15518 |
| Total impairment of definite lived intangible assets | 1256 |  | 15518 |
| *Indefinite lived intangible assets* |  |  |  |
| &nbsp;&nbsp; Brand intangibles | 1350 |  |  |
| Total impairment of indefinite lived intangible assets | 1350 |  |  |
| **Total impairment of intangible assets** | $**2606** | $**—** | $**15518** |

---

During the year ended December 31, 2025, the Company determined that changes in market expectations of cash flows in its California wholesale business, as well as increased competition and supply in the state, were indicators that a quantitative impairment test was appropriate.

During the year ended December 31, 2025, for the State Flower brand name in California, the Company compared the carrying value to its fair value using the relief-from royalty method and determined that the carrying value exceeded the fair value. The Company recorded impairment charges of $1,350, reducing its carrying value to $nil. The estimates and assumptions used in testing include such values as; no future revenue growth, a 1% royalty rate, and a WACC of 13.4%.

During the year ended December 31, 2025, for the California asset group, the Company compared the carrying value of the wholesale license to its fair value using a discounted cash flow analysis and determined that the carrying value exceeded the fair value. The Company recorded impairment charges of $1,256, reducing its carrying value to $nil. The estimates and assumptions used in testing include such values as; no future revenue growth, a 2% increase in operating expenses, and a WACC of 13.4%.

*<u>Impairment of Goodwill</u>* 

The Company performed its annual goodwill impairment test during the fourth quarter of 2025.

The Company performed a qualitative assessment of the Pennsylvania reporting unit and based on current market conditions and the uncertainty surrounding the timing of potential adult-use cannabis legalization in Pennsylvania, it was determined that a quantitative assessment was appropriate. The fair value of the Pennsylvania reporting unit was estimated using a Probability-Weighted DCF model. The valuation incorporated multiple legalization timing scenarios, including adult-use legalization occurring in 2026, 2027, 2028, and a scenario in which legalization does not occur. Probabilities were assigned to each scenario with the vast majority of the weighting for legalization to occur in 2026 or 2027, based on management's assessment of current legislative activity, regulatory developments, and industry conditions. Other estimates and assumptions used in the valuation included projected revenues, operating margins, a WACC of 13.4%, and terminal value multiples ranging from 7.7x to 8.8x depending on the scenario. The Company considered, but did not rely upon, a market approach, as recent observed transactions were not deemed comparable to the Company's Pennsylvania operations. Accordingly, the income approach was determined to be the most appropriate valuation methodology. Based on the analysis performed, the estimated fair value of the Pennsylvania reporting unit exceeded its carrying value as of the testing date, and no goodwill impairment was recorded. Changes in the timing or an adverse outcome of adult-use legalization could adversely affect operating results which would result in a reduction in the estimated fair value of the reporting unit below its carrying value and result in goodwill impairment. In the sensitivity analysis performed, holding all other assumptions constant, management increased the probability of no legalization from its baseline assumption of approximately 5% to approximately 30%, starting at which point the estimated fair value of the Pennsylvania reporting unit would fall below its carrying value and result in an impairment. Under the base case assumptions, the estimated fair value of the Pennsylvania reporting unit exceeded the carrying value by approximately 14%.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

The Company performed qualitative assessments of the Maryland and Ohio reporting units and based on current market conditions, operating performance, and regulatory developments, the Company concluded that it was more likely than not that the fair values of the Maryland and Ohio reporting unit exceeded their carrying values. Accordingly, quantitative impairment tests were not performed.

The following table summarizes the Company's goodwill by reporting unit which is aggregated into one reportable segment:

---

| | | | |
|:---|:---|:---|:---|
| **Reporting Unit** | **Carrying Amount** | **Goodwill Balance** | **2025 Impairment Test** |
|  | **(In thousands)** | **(In thousands)** |  |
| Pennsylvania | $231645 | $75904 | Quantitative |
| Maryland | 109282 | 31025 | Qualitative |
| Ohio | 10053 | 2841 | Qualitative |

---

**10. Loans payable** 

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | **(In thousands)** | **(In thousands)** |
| Pelorus term loan retired July 2025 |  |  |
| &nbsp;&nbsp;Principal amount | $— | $45478 |
| &nbsp;&nbsp;Deferred financing cost |  | (1168) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net carrying amount | $— | $44310 |
| Maryland Acquisition loan due June 2027 |  |  |
| &nbsp;&nbsp;Principal amount | $2758 | $18029 |
| &nbsp;&nbsp;Unamortized discount | (208) | (746) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net carrying amount | $2550 | $17283 |
| Ratio promissory note due May 2027 |  |  |
| &nbsp;&nbsp;Principal amount | $3980 | $— |
| &nbsp;&nbsp;Deferred financing cost | (279) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net carrying amount | $3701 | $— |
| FocusGrowth loan due August 2028 |  |  |
| &nbsp;&nbsp;Principal amount | $217682 | $140000 |
| &nbsp;&nbsp;Unamortized discount and deferred financing cost | (17621) | (12799) |
| &nbsp;&nbsp;Exit fee accretion | 1824 | 390 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net carrying amount | $201885 | $127591 |
| Other loans | $1032 | $1038 |
| Total debt, net | $209168 | $190222 |
| Loans payable, current | 5322 | 6761 |
| Loans payable, non-current | 203846 | 183461 |
| Total principal | $225452 | $204545 |

---

The Company had accrued interest for its loan payables of $2,365 and $2,537 as of December 31, 2025 and December 31, 2024, respectively, included in accounts payable and accrued liabilities on the Consolidated Balance Sheets.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

<u>FocusGrowth Term Loan</u>

On August 1, 2024, the Issuer and TerrAscend USA, Inc., as guarantors, and each of WDB Holding CA, Inc., WDB Holding PA, Inc., Moose Curve Holdings, LLC, Hempaid, LLC and pursuant to a joinder agreement dated September 30, 2024, WDB Holding MI, Inc., including certain of each of their respective subsidiaries, as borrowers (collectively, the "Borrowers"), and FG Agency Lending LLC, as the Administrative Agent (the "Agent") entered into a Loan Agreement (the "FG Loan") for a four-year, $140,000 senior-secured term loan. Net proceeds of the FG Loan were received in an amount equal to 95% of the $140,000.

The FG Loan bears interest at 12.75% per annum and matures on August 1, 2028 (the "FG Loan Maturity Date"). The FG Loan is guaranteed by the Issuer and TerrAscend USA, Inc. and is secured by substantially all of the assets of the Borrowers. Depending on the timing of repayment, an exit fee of between 2.0% and 4.0% of the outstanding principal amount of the FG Loan (the "Exit Fee") will be due upon either the prepayment, in part or in full, of the FG Loan or the FG Loan Maturity Date.

On July 8, 2025, TerrAscend, TerrAscend USA, Inc., TerrAscend NJ LLC, TER Holding MD, Inc., and WDB Holding MD, Inc., including certain of each of their respective subsidiaries, and other borrowers, all of which are entities that are consolidated in the financial statements of the Company (the "Incremental Amendment Borrowers"), became parties to the FG Loan as borrowers pursuant to a joinder agreement, by and among the Incremental Amendment Borrowers and the Agent, (the "FG Loan Amendment") which provided for a $79,000 upsize to the existing FG Loan. Net proceeds of the FG Loan were received in an amount equal to 95% of the $79,000. Additionally, the FG Loan Amendment provides for an uncommitted term loan facility of up to $35,000 (the "Uncommitted Term Loan Facility"). The terms of the FG Loan Amendment and the Uncommitted Term Loan Facility are consistent with the initial FG Loan.

The Company drew down in full the $79,000 available under the FG Loan Amendment on July 8, 2025, $64,489 of which was used to retire the Pelorus Term Loan (as defined below), and certain other indebtedness of the Company, in addition to being used for future growth initiatives. This amendment was not considered extinguishment of debt under ASC 470, Debt.

On July 15, 2025, the Company drew $3,105 of the Uncommitted Term Loan Facility. Net proceeds of the FG Loan were received in an amount equal to 95% of the $3,105.

During the year ended December 31, 2025, the Company made prepayments in aggregate of $4,423, including a 3% prepayment fee.

As of December 31, 2025, there was an outstanding principal amount of $217,682 under the FG Loan.

<u>Pelorus Term Loan</u>

On October 11, 2022, certain subsidiaries of TerrAscend, among others, entered into a loan agreement with Pelorus Fund REIT, LLC for a single-draw senior secured term loan (the "Pelorus Term Loan") in an aggregate principal amount of $45,478. The Pelorus Term Loan was based on a variable rate tied to the one month Secured Overnight Financing Rate, subject to a base rate, plus 9.5%, with interest-only payments for the first 36 months and was set to mature on October 11, 2027.

On July 8, 2025, as described above, the Company entered into the FG Loan Amendment, of which, a portion of the proceeds of the FG Loan Amendment was used to retire the Pelorus Term Loan and pay the full outstanding principal amount of $45,478. Due to the early retirement of the Pelorus Term Loan, the Company paid an exit fee of $233 and recognized a loss on extinguishment of debt of $1,192 on the Consolidated Statements of Operations and Comprehensive Loss.

<u>Maryland Acquisition Loans</u>

In connection with the acquisition of Derby 1, LLC on June 28, 2023 ("Peninsula"), Hempaid, LLC on June 30, 2023 ("Blue Ridge"), and Herbiculture Inc. on July 10, 2023 ("Herbiculture"), (collectively, the "Maryland Acquisitions"), the Company entered into promissory notes with an aggregate principal amount of $20,625 (the "Maryland Acquisition Loans").

On July 8, 2025, as described above, the Company entered into the FG Loan Amendment, of which, a portion of the proceeds of the FG Loan Amendment was used to retire a series of Maryland promissory notes and pay an outstanding principal amount of $13,077. Due to the early retirement of the certain Maryland promissory notes, the Company recognized a loss on extinguishment of debt of $240 on the Consolidated Statements of Operations and Comprehensive Loss.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

As of December 31, 2025, there was an outstanding principal amount of $2,758 under the Maryland Acquisition Loans associated with Blue Ridge, which bears interest at 7.0% with a maturity date of June 30, 2027.

<u>Ratio Acquisition Loans</u>

*FG Bridge Loan*

On May 6, 2025, the Company completed the acquisition of certain assets of Ratio Cannabis LLC, a dispensary in Ohio (the "Ratio Acquisition"). In connection with the Ratio Acquisition, the Company and FG Agency Lending LLC, as the Administrative Agent, entered into a Loan Agreement for a $5,208 term loan (the "FG Bridge Loan").

On July 8, 2025, as described above, the Company entered into the FG Loan Amendment, of which, a portion of the proceeds of the FG Loan Amendment was used to retire the FG Bridge Loan and pay the full outstanding principal amount of $5,208.

*Ratio Promissory Note*

Additionally, as a part of the Ratio Acquisition, the Company entered into a promissory note for $3,980 bearing 6% interest with a two-year maturity (the "Ratio Promissory Note").

As of December 31, 2025, there was an outstanding principal amount of $3,980 under the Ratio Promissory Note.

<u>Other loans</u>

*Class A Shares of TerrAscend*

In connection with the 2023 Reorganization (see Note 3), TerrAscend issued $1,000 of Class A shares with a 20% guaranteed annual dividend to an investor (the "Investor") pursuant to the terms of a subscription agreement between TerrAscend and the Investor dated April 20, 2023 (the "Subscription Agreement"). Pursuant to the terms of the Subscription Agreement, TerrAscend holds a call right to repurchase all of the Class A Shares issued to the Investor for an amount equal to the sum of: (a) the Repurchase/Put Price (as defined in the Subscription Agreement); plus (b) the amount equal to 40% of the subscription amount less the aggregate dividends paid to the Investor as of the date of the exercise of the option. In addition, the Investor holds a put right that is exercisable at any time after four months' advanced written notice following the five-year anniversary of the closing of the investment to put all (and only all) of the Class A Shares owned by the Investor to TerrAscend at the Repurchase/Put Price, payable in cash or shares. The instrument is considered as a debt for accounting purposes due to the economic characteristics and risks.

<u>Maturities of loans payable</u>

Stated maturities of loans payable over the next five years are as follows:

---

| | |
|:---|:---|
|  | **December 31, 2025** |
|  | **(In thousands)** |
| 2026 | $5469 |
| 2027 | 6024 |
| 2028 (1) | 213948 |
| 2029 | 7 |
| 2030 | 4 |
| Thereafter |  |
| Total principal payments | $225452 |
| (1) Balance excludes the Exit Fee, as described above within this note. |  |

---

The Company is subject to financial covenants as a result of its loans payable with various lenders. The Company was in compliance with its debt covenants as of December 31, 2025. In the event that, in future periods, the Company's financial results are below levels required to maintain compliance with any of its covenants, the Company will assess and undertake appropriate corrective initiatives with a view to allowing it to continue to comply with its covenants.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

**11. Leases** 

Amounts recognized in the Consolidated Balance Sheets were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | **(In thousands)** | **(In thousands)** |
| Operating leases: |  |  |
| &nbsp;&nbsp;Operating lease right-of-use assets | $26691 | $28755 |
| &nbsp;&nbsp;Operating lease liability classified as current | 1511 | 1322 |
| &nbsp;&nbsp;Operating lease liability classified as non-current | 28555 | 30664 |
| **Total operating lease liabilities** | $**30066** | $**31986** |

---

The Company recognized operating lease expense of $4,975 ($380 included in cost of sales), $5,282 ($369 included in cost of sales), and $5,527 ($558 included in cost of sales) for the years ended December 31, 2025, 2024 and 2023, respectively.

Other information related to operating leases consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| Weighted-average remaining lease term (years) |  |  |
| &nbsp;&nbsp;Operating leases | 13.0 | 13.2 |
| Weighted-average discount rate |  |  |
| &nbsp;&nbsp;Operating leases | 11.32% | 11.19% |

---

Supplemental cash flow information related to leases were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | **(In thousands)** | **(In thousands)** |
| Cash paid for amounts included in measurement of operating lease liabilities | $4823 | $4672 |
| Right-of-use assets obtained in exchange for operating lease obligations | 2790 | 655 |

---

Undiscounted lease obligations as of December 31, 2025 are as follows:

---

| | |
|:---|:---|
|  | **Operating** |
|  | **(In thousands)** |
| 2026 | $4360 |
| 2027 | 4426 |
| 2028 | 4496 |
| 2029 | 4594 |
| 2030 | 4168 |
| Thereafter | 37397 |
| Total lease payments | 59441 |
| Less: interest | (29375) |
| Total lease liabilities | $30066 |

---

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

**12. Convertible debt**

*Private Placement Convertible Debentures*

In June and August 2023, the Company closed the private placements of a total of 10,355 senior unsecured convertible debentures at a price of $1,000 per debenture for total gross proceeds of $10,355. Unless repaid or converted earlier, the outstanding principal and accrued and unpaid interest on the debentures will be due and payable 36 months following the closing of the debenture offering (the "Debenture Maturity Date"). Each debenture bears interest at a rate of 9.9% per annum from the date of issuance, calculated and compounded semi-annually, and payable on the Debenture Maturity Date. Each holder has the option to elect to receive up to 4.95% per annum of such interest payable in cash on a semi-annual basis. Each debenture is convertible into Common Shares, at the option of the holder, at any time or times prior to the close of business on the last business day immediately preceding the Debenture Maturity Date, at a conversion price of $2.01 per Common Share. Holders converting their debentures will receive accrued and unpaid interest for the period from and including the date of the last interest payment date, to and including, the date of conversion.

In accordance with ASC 815, *Derivatives and Hedging*, the conversion option was bifurcated from the host instrument as the instrument's strike price is denominated in a currency other than the functional currency of the Issuer. It was recorded at fair value, using the Black-Scholes Model (see Note 23). The proceeds are allocated first to the conversion option based on its fair value of $3,600, and the residual was allocated to the host instrument and recorded as convertible debt at a residual value of $6,755.

The following table summarizes the Private Placement Convertible Debentures activity for the year-ended December 31, 2025:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | **(In thousands)** | **(In thousands)** |
| Convertible debt proceeds, net of transaction costs - Maturing June 2026 | $**10098** | $**10098** |
| &nbsp;&nbsp;Allocation to conversion option | 3600 | 3600 |
| &nbsp;&nbsp;Allocation to debt | 6498 | 6498 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest and accretion | 3857 | 2616 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net carrying amount** | $**10355** | $**9114** |

---

*Union Chill Convertible Promissory Note*

On December 26, 2025, the Company issued a convertible promissory note for $9,000 in relation to the transaction with Union Chill Cannabis Company LLC ("Union Chill"). Unless repaid or converted earlier, the outstanding principal and interest shall be due and payable 48 months following the date of issuance (the "Convertible Note Maturity Date"). The convertible promissory note bears interest at the rate of 6.5% per annum payable in quarterly payments within five days following the first business day of each fiscal quarter. The convertible promissory note is convertible into Common Shares, at the option of the holder, at any time or times prior to the close of business on the last business day immediately preceding the Convertible Note Maturity Date, at a conversion price of $1.89 per Common Share.

In accordance with ASC 815, *Derivatives and Hedging*, the conversion option was bifurcated from the host instrument as the instrument's strike price is denominated in a currency other than the functional currency of the Issuer. It was recorded at fair value, using the Black-Scholes Model (see Note 23). The proceeds are allocated first to the conversion option based on its fair value of $2,104, and the residual was allocated to the host instrument and recorded as convertible debt at a residual value of $6,896.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

The following table summarizes the Union Chill Convertible Promissory Note activity for the year-ended December 31, 2025:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | **(In thousands)** | **(In thousands)** |
| Convertible debt issued as acquisition consideration - Maturing December 2029 | $**9000** | $**—** |
| &nbsp;&nbsp;Allocation to conversion option | 2104 |  |
| &nbsp;&nbsp;Allocation to debt | 6896 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest and accretion |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net carrying amount** | $**6896** | $**—** |

---

The Company had accrued interest for its convertible debt of $2,171 and $1,200 as of December 31, 2025 and December 31, 2024, respectively, included in accounts payable and accrued liabilities on the Consolidated Balance Sheets.

**13. Shareholders' equity** 

The Company is authorized to issue an unlimited number of Common Shares, an unlimited number of Proportionate Voting Shares, an unlimited number of Exchangeable Shares, and an unlimited number of Preferred Shares, issuable in series. The Board has the discretion to determine the rights, preferences, privileges, and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges, and liquidation preferences, of each class of the Company's capital stock.

<u>Unlimited Number of Preferred Shares</u> 

The Board has authorized the Company to issue an unlimited number of Series A, Series B, Series C and Series D Preferred Shares. The Preferred Shares of each series will, with respect to the payment of dividends and the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company, whether voluntarily or involuntarily, rank on parity with the Preferred Shares of every other series, and will be entitled to preference over the Proportionate Voting Shares, Common Shares and Exchangeable Shares.

*Voting Rights*

Holders of Preferred Shares are not entitled to receive notice of, or to attend or to vote at any meeting of the shareholders of the Company.

*Dividends*

Holders of Preferred Shares are not entitled to receive any dividends, except if the Company issues a dividend when necessary to comply with contractual provisions in respect of an adjustment to the conversion ratio in connection with any dividend paid on the Common Shares.

*Conversion Rights*

Holders of Preferred Shares are entitled to convert each outstanding Preferred Share into 1,000 Common Shares of the Company (or the economic equivalent in Proportionate Voting Shares for U.S. investors) at the option of the holder, subject to customary anti-dilution provisions.

The Preferred Shares will be automatically converted into Proportionate Voting Shares at the then-effective conversion ratio, instead of being redeemed for cash and other assets, in the event of a change in control.

*Redemption Rights*

The Company classified the Preferred Shares as permanent equity in the financial statements given that the terms do not obligate the Company to buy back the shares of Preferred Shares in exchange for cash or other assets, nor do the shares represent an obligation that must or may be settled with a variable number of shares, which are debt-like features. No other redemption provisions exist within the terms of the instrument.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

*Liquidation Preference*

In the event of liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, or upon any other return of capital or distribution of the assets of the Company among its shareholders, in each case for the purposes of winding up its affairs, each Preferred Share entitles the holder thereof to receive and to be paid out of the assets of the Company available for distribution, before any distribution or payment may be made to a holder of any Common Shares, Proportionate Voting Shares, Exchangeable Shares or any other shares ranking junior in such liquidation, dissolution, or winding up to the Preferred Shares, an amount per Preferred Share equal to the fair market value of the consideration paid for such Preferred Share upon issuance.

The Company's Series A, Series B, Series C and Series D Preferred Shares have a liquidation preference that is initially equal to $2,000, $2,000, $3,000 and $3,000, respectively, per Preferred Share; provided that if the Company makes a distribution to holders of all or substantially all of the respective series of Preferred Shares, or if the Company effects a share split or share consolidation of the respective series of Preferred Shares, then the liquidation preference will then be adjusted on the effective date of such event by a rate computed as (i) the number of respective series of Preferred Shares outstanding immediately before giving effect to such event divided by (ii) the number of respective series of Preferred Shares outstanding immediately after such event.

After payment to the holders of the Preferred Shares of the full liquidation preference to which they are entitled in respect of outstanding Preferred Shares (which, for greater certainty, have not been converted prior to such payment), such Preferred Shares will have no further right or claim to any of the assets of the Company.

The liquidation preference will be payable to holders of Preferred Shares in cash; provided, however, that to the extent the Company has, having exercised commercially reasonable efforts to make such payment, insufficient cash available to pay the liquidation preference in full in cash, the portion of the liquidation preference with respect to which the Company has insufficient cash may be paid in property or other assets of the Company. The value of any property or assets not consisting of cash that is distributed by the Company in satisfaction of any portion of the liquidation preference will equal the fair market value on the date of distribution. As of December 31, 2025, the Convertible Preferred Series A and B Shares had an aggregate liquidation value of $22,650.

<u>Unlimited Number of Proportionate Voting Shares</u>

Holders of Proportionate Voting Shares are entitled to receive, as and when declared by the Board, dividends in cash or property of the Company. No dividend may be declared on the Proportionate Voting Shares unless the Company simultaneously declares dividends on the Common Shares in an amount equal to the dividend declared per Proportionate Voting Share divided by 1,000.

In the event of the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or in the event of any other distribution of assets of the Company among its shareholders for the purpose of winding up its affairs, the holders of Proportionate Voting Shares are entitled to participate pari passu with the holders of Common Shares in an amount equal to the amount of such distribution per Common Share multiplied by 1,000.

Holders of Proportionate Voting Shares are not entitled to a right of first refusal to subscribe for, purchase or receive any part of any issue of shares, or bonds, debentures or other securities of the Company.

There may be no subdivision or consolidation of the Proportionate Voting Shares unless, simultaneously, the Common Shares and Exchangeable Shares are subdivided or consolidated using the same divisor or multiplier.

Proportionate Voting Shares carry 1,000 votes per share.

<u>Unlimited Number of Exchangeable Shares</u>

*Voting Rights*

Holders of Exchangeable Shares will not be entitled to receive notice of, attend or vote at meetings of the shareholders of the Company; provided that the holders of Exchangeable Shares will, however, be entitled to receive notice of meetings of

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

shareholders called for the purpose of authorizing the dissolution of the Company or the sale of its assets, or a substantial part thereof, but holders of Exchangeable Shares will not be entitled to vote at such meeting of the shareholders of the Company.

*Dividends*

Holders of Exchangeable Shares will not be entitled to receive any dividends.

*Dissolution*

In the event of liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or any other distribution of assets of the Company among its shareholders for the purpose of winding-up its affairs, holders of Exchangeable Shares will not be entitled to receive any amount, property or assets of the Company.

*Exchange Rights*

Each issued and outstanding Exchangeable Share may, at any time following the exchange start date applicable to the holder of such Exchangeable Share, at the option of the holder and subject to any restrictions or limitations, be exchanged for one Common Share.

<u>Unlimited Number of Common Shares</u>

*Voting Rights*

Holders of Common Shares are entitled to receive notice of, and to attend, all meetings of the shareholders of the Company and shall have one vote per each Common Share held at all meetings of the Company, except for meetings at which only holders of another specified class or series of shares of the Company are entitled to vote separately as a class or series.

*Dividend Rights*

Holders of Common Shares are entitled to receive, subject to the rights of the holder of any other class of shares, any dividends declared by the Company. If, as and when dividends are declared by the directors, each Common Share will be entitled to 0.001 times the amount paid or distributed per Proportionate Voting Share (or, if a stock dividend is declared, each Common Share will be entitled to receive the same number of Common Shares per Common Share of Proportionate Voting Shares entitled to be received per Proportionate Voting Share).

*Dissolution*

In the event of liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or any other distribution of assets of the Company among its shareholders for the purpose of winding-up its affairs, the holders of the Common Shares will, subject to the rights of any other class of shares, be entitled to receive the remaining property of the Company on the basis that each Common Share will be entitled to 0.001 times the amount distributed per Proportionate Voting Share, but otherwise there is no preference or distinction among or between the Proportionate Voting Shares and the Common Shares.

*Conversion Rights*

Each issued and outstanding Common Share may at any time, at the option of the holder, be converted into 0.001 of a Proportionate Voting Share.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

<u>Description of Transactions:</u> 

*Share Repurchase Authorization* 

On August 20, 2025, the Board approved a normal course issuer bid program to repurchase up to $10,000 of Common Shares (the "Share Repurchase Program"), which replaced the Company's share repurchase program previously in place (the "Original Program"). The Share Repurchase Program authorizes the Company to repurchase up to 10,000,000 Common Shares at any time, or from time to time, from August 22, 2025 until August 21, 2026. The Share Repurchase Program authorizes the Company to repurchase up to 60,255 Common Shares daily, which represents 25% of the Company's average daily trading volume on the TSX of 241,023 Common Shares. Any repurchases under the program may be made by means of open market transactions, negotiated block transactions, or otherwise, including pursuant to a repurchase plan administered in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended. The size and timing of any repurchases will depend on price, market and business conditions, and other factors. Common Shares may be purchased on the TSX, the OTCQX, or alternative trading systems and are subject to the limitations and rules imposed by U.S. and Canadian securities regulations. The actual number of Common Shares purchased, timing of purchases and share price depend upon market conditions at the time and securities law requirements. Any Common Shares acquired pursuant to the Share Repurchase Program will be returned to treasury and cancelled. Shareholders may obtain a copy of the Form 12 – Notice of Intention to make a Normal Course Issuer Bid filed by the Company with the TSX, without charge, by contacting the Company.

During the year ended December 31, 2025, the Company repurchased 1,117,500 common shares under its share repurchase programs, consisting of 75,000 Common Shares under the Share Repurchase Program and 1,042,500 Common Shares under the Original Program, for total consideration of approximately $428, including excise tax. As of December 31, 2025, the Company had a total of 9,925,000 shares remaining that can be authorized for repurchase pursuant to the Share Repurchased Program.

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** |
|  | **(In thousands, except per share data)** | **(In thousands, except per share data)** |
| Total Common Shares repurchased | 1117500 | 236900 |
| Common Shares canceled | 1247000 | 107400 |
| Weighted average price per share | $0.44 | $0.93 |
| Total cost | $410 | $206 |
| Excise tax (1) | $18 | $9 |

---

(1) The excise tax accrued in connection with the share repurchases was recorded as an adjustment to the cost basis of repurchased shares in treasury stock and within accrued expenses on the Company's Consolidated Balance Sheets as of December 31, 2025 and 2024, as applicable.

*Warrants*

The following is a summary of the outstanding warrants for Common Shares:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of Common Share Warrants Outstanding** | **Number of Common Share Warrants Exercisable** | **Weighted Average Exercise Price $** | **Weighted Average Remaining Life (years)** |
| **Outstanding, December 31, 2023** | **23330542** | **818927** | $**4.56** | 8.74 |
| Granted | 344140 | 344140 | 2.17 | 2.75 |
| Expired | (304055) | (304055) | 5.64 |  |
| **Outstanding, December 31, 2024** | **23370627** | **859012** | $**4.14** | 7.77 |
| Granted |  |  |  |  |
| Expired | (117147) | (79660) | 7.00 |  |
| **Outstanding, December 31, 2025** | **23253480** | **779352** | $**4.34** | 6.80 |

---

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

On December 9, 2022, the Company entered into an arrangement with Canopy USA, LLC ("Canopy USA") and certain of its subsidiaries to convert CAD$125,500 in aggregate loans plus accrued interest in exchange for 24,601,467 Exchangeable Shares at a notional price of CAD$5.10 per Exchangeable Share and 22,474,130 new Common Share purchase warrants (the "New Warrants") to acquire Common Shares at a weighted average exercise price of CAD$6.07 per Common Share. In addition, the Company, TerrAscend Canada and Arise Bioscience, Inc. (collectively, "TerrAscend Entities") and Canopy USA, Canopy USA I Limited Partnership ("Canopy USA LP I") and Canopy USA III Limited Partnership ("Canopy USA LP III") entered into a debt settlement agreement (the "Debt Settlement Agreement"), pursuant to which the TerrAscend Entities are required to deliver to Canopy USA LP I and Canopy USA LP III an aggregate of 24,601,467 Exchangeable Shares and New Warrants with exercise prices ranging from CAD$3.74 to CAD$17.19 as consideration for extinguishing the debt obligations, including all principal and interest on the amounts outstanding thereunder. All of the New Warrants expire on December 31, 2032.

The following is a summary of the outstanding warrant liabilities that are exchangeable into Common Shares.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of Common Share Warrants Outstanding** | **Number of Common Share Warrants Exercisable** | **Weighted Average Exercise Price $** | **Weighted Average Remaining Life (years)** |
| **Outstanding, December 31, 2023** | **3590334** | **3590334** | $**1.95** | 1.48 |
| Granted |  |  |  |  |
| Expired |  |  |  |  |
| **Outstanding, December 31, 2024** | **3590334** | **3590334** | $**1.95** | 0.48 |
| Granted |  |  |  |  |
| Expired | (3590334) | (3590334) | 1.95 |  |
| **Outstanding, December 31, 2025** | **—** | **—** | $**—** | **—** |

---

**14. Share-based compensation plans**

<u>Share-based payments expense</u>

Total share-based payments expense was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| Stock options | $3022 | $6993 | $4424 |
| Restricted share units | $1985 | 2713 | $3283 |
| **Total share-based payments** | $**5007** | $**9706** | $**7707** |

---

As of December 31, 2025, the total unrecognized compensation cost related to nonvested stock options was $2,294. The weighted average period over which it is expected to be recognized is 1.89 years for options.

<u>Stock Options</u>

The Company's 15% rolling Stock Option Plan was originally adopted and approved by the Board effective March 8, 2017 and was most recently amended and restated on June 26, 2023. The Stock Option Plan governs the grant, administration and exercise of options to purchase Common Shares, which may be granted to employees, directors or consultants ("Eligible Persons") of the Company. The number of Common Shares reserved for issuance to any one person under an option granted pursuant to the Stock Option Plan, when combined with the number of Common Shares reserved for issuance under all awards granted within the one-year period prior to the date of grant under all other share compensation plans, including the Stock Option Plan and the Company's share unit plan (the "RSU Plan"), may not exceed 5% of the issued and outstanding Common Shares at the date of grant on a non-diluted basis, unless the Company has obtained disinterested shareholder approval. Options to purchase Common Shares granted under the Stock Option Plan will have an exercise price not less than the "fair market value" of a Common Share on the date of grant, being the five-day volume weighted average price of the Common Shares based on the date of grant of the option. The exercise price, term and vesting of options to purchase Common Shares shall

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

otherwise be as approved by the Board. Unless otherwise determined by the Board, options to purchase Common Shares typically vest and become exercisable at a rate of 25% on each of the first four anniversary dates from the date of grant.

The options to purchase Common Shares outstanding noted below consist of service-based options granted to employees, the majority of which vest over a one to four-year period and have a five to ten-year contractual term. These awards are subject to the risk of forfeiture until vested by virtue of continued employment or service to the Company.

The following table summarizes the stock option activity:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of Stock Options** | **Weighted average remaining contractual life (in years)** | **Weighted Average Exercise Price (per share) $** | **Aggregate intrinsic value** |
| **Outstanding, December 31, 2023** | **16278380** | 4.74 | $**3.35** | $**658** |
| Granted | 3355000 |  | 1.90 |  |
| Exercised | (30625) |  | 1.55 |  |
| Forfeited | (913145) |  | 2.22 |  |
| Expired | (2568691) |  | 3.53 |  |
| **Outstanding, December 31, 2024** | **16120919** | 5.90 | $**3.13** | $**32** |
| Granted | 1077500 |  | 0.44 |  |
| Exercised |  |  |  |  |
| Forfeited | (807739) |  | 3.17 |  |
| Expired | (2487107) |  | 3.29 |  |
| **Outstanding, December 31, 2025** | **13903573** | 5.32 | $**2.86** | $**368** |
| **Exercisable, December 31, 2025** | **10462222** | 4.34 | $**3.36** | $**64** |

---

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between Company's closing stock price at the end of the year and the exercise price, multiplied by the number of the in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options on December 31, 2025, 2024, and 2023, respectively.

The total pre-tax intrinsic value (the difference between the market price of the Common Shares on the exercise date and the price paid to exercise the option) related to stock options exercised is presented below:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| Exercised | $— | $6 | $558 |

---

The total estimated fair value of stock options that vested during the years ended December 31, 2025, 2024, and 2023, was $3,849, $5,943, and $5,552, respectively.

The fair value of the various stock options granted were estimated using the Black-Scholes Model with the following weighted average assumptions:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
| Volatility | 75.76% - 86.09% | 70.54% - 78.31% | 77.79% - 80.16% |
| Risk-free interest rate | 3.78% - 4.12% | 3.18% - 4.45% | 2.85% - 4.26% |
| Expected life (years) | 4.87 - 6.25 | 4.01 - 10.01 | 9.78 - 10.01 |
| Dividend yield | 0.00% | 0.00% | 0.00% |

---

Volatility was estimated by using the historical volatility of the Company. The expected life in years represents the period of time that the options issued are expected to be outstanding. The risk-free rate is based on U.S. treasury bond issues with a

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

remaining term approximately equal to the expected life of the options. Dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay cash dividends in the foreseeable future.

*Repricing of Stock Options*

On June 24, 2025 (the "Option Modification Date"), the Board approved a stock option repricing for employees and insiders of the Company (the "Option Repricing") pursuant to which the exercise price of certain outstanding options to purchase Common Shares under the Company's stock option plan will be reduced to $0.26 per share, which represented the five-day volume weighted average price of the Common Shares immediately preceding the Option Modification Date, subject to such employee or insider continuing to perform their duties on behalf of the Company for a period of at least twelve months following the Option Modification Date ("Service Period Requirement"). The Option Repricing with respect to insiders of the Company was approved by the Company's shareholders at its Annual General Meeting held on June 24, 2025. As a result of the Option Repricing, 8,279,003 shares of vested and unvested stock options outstanding were modified, in accordance with ASC 718, Stock-Based Compensation, as of the Option Modification Date resulting in an incremental expense to the Company of $868. The vested portion of the repriced options are recognized on a straight-lined basis over the Service Period Requirement and the unvested portion will be recognized over the remaining vesting periods of each respective award.

<u>Restricted Share Units</u>

The Company's RSU Plan was approved by the Board effective November 19, 2019, and was most recently amended and restated on June 26, 2023. The RSU Plan governs the grant, administration and release of share units ("RSUs") which may be granted to Eligible Persons of the Company. Pursuant to the RSU Plan, the number of Common Shares that may be reserved for issuance under the RSU Plan and under any other share compensation plans of the Company, including the Stock Option Plan, may not exceed (in the aggregate) 15% of the outstanding Common Shares on the date of grant on a non-diluted basis. The Company is required, at all times during the term of the RSU Plan, to reserve and keep available the number of Common Shares necessary to satisfy the requirements of the RSU Plan.

The following table summarizes the activities for the RSUs:

---

| | |
|:---|:---|
|  | **Number of RSUs** |
| **Outstanding, December 31, 2023** | **1078584** |
| Granted | 2449011 |
| Vested | (1581997) |
| Forfeited | (345293) |
| **Outstanding, December 31, 2024** | **1600305** |
| Granted | 8968793 |
| Vested | (3792216) |
| Forfeited | (1747567) |
| **Outstanding, December 31, 2025** | **5029315** |

---

RSUs granted during the year ended December 31, 2025, vest over a six month to four year term. RSUs granted during the year ended December 31, 2024, vest over a three month to four year term. Of the RSUs granted in 2023, 602,183 vested on the grant date, with the remainder vesting over a six month to four year term.

As of December 31, 2025, there was $2,185 of total unrecognized compensation cost related to unvested RSUs.

**15. Non-controlling interest**

Non-controlling interest consists mainly of a 12.5% minority ownership interest in TerrAscend's New Jersey operations.

On January 19, 2024, the Company reduced its non-controlling interest through the acquisition of the remaining 50.1% equity in both State Flower and the three Apothecarium dispensaries in California. The carrying amount of non-controlling interest was adjusted by $1,374 and recognized in additional paid in capital and attributed to the parent's equity holders.

The following table summarizes the non-controlling interest activity for the years ended:

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | **(In thousands)** | **(In thousands)** |
| Opening carrying amount | $(144) | $(1756) |
| Capital distributions | (3237) | (7324) |
| Derecognition of non-controlling interest | 20 |  |
| Acquisition of non-controlling interest |  | 1374 |
| Net income attributable to non-controlling interest | 4897 | 7562 |
| **Ending carrying amount** | $**1536** | $**(144)** |

---

**16. Related parties** 

The amounts due to/from related parties consisted of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)*Loans payable:* During the year ended December 31, 2025, certain funds controlled by the Company's Executive Chairman, a related party of the Company, invested $1,600 as a member of the loan syndicate, for an aggregate investment of $7,100 of the total loan principal balance of the FG Loan (see Note 10).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)*Private Placements*: The Private Placements constitute a related party transaction because related persons, which consisted of key management and directors of the Company participated in the transaction. The Company's Executive Chairman, participated, directly and indirectly, in the Private Placement and acquired 800,002 units for gross proceeds of $1,200. In total, the related persons acquired, in the aggregate, 2,000 debentures and 825,734 units in connection with the Private Placements for aggregate gross proceeds of $3,239.

**17. Income taxes**

The domestic and foreign components of loss from continuing operations before provision for income taxes are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| Domestic | 13680 | 18238 | 9102 |
| Foreign | (8703) | (13995) | (13343) |
| **Income (loss) before income taxes** | $**4977** | $**4243** | $**(4241)** |

---

Significant judgment is required in evaluating the Company's uncertain tax positions and determining the provision for income taxes. The Company recognizes benefits from uncertain tax positions based on the cumulative probability method whereby the largest benefit with a cumulative probability of greater than 50% is recorded. An uncertain tax position is not recognized if it has less than a 50% likelihood of being sustained.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

The provision for income taxes consists of:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| Current: |  |  |  |
| &nbsp;&nbsp;Federal | 30652 | 23863 | 26814 |
| &nbsp;&nbsp;State | (654) | (97) | 6764 |
| &nbsp;&nbsp;Foreign |  |  | 62 |
| **Total Current** | $**29998** | $**23766** | $**33640** |
| Deferred: |  |  |  |
| &nbsp;&nbsp;Federal | (243) | 1045 | (5862) |
| &nbsp;&nbsp;State | (289) | 323 | (4411) |
| &nbsp;&nbsp;Foreign |  |  | 19 |
| **Total Deferred** | $**(532)** | $**1368** | $**(10254)** |
| **Total Income Tax Provision** | $**29466** | $**25134** | $**23386** |

---

The following table reconciles the expected statutory federal income tax to the actual income tax provision:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** | **December 31, 2023** | **December 31, 2023** |
|  | **Amount** | **Percent** | **Amount** | **Percent** | **Amount** | **Percent** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| **U.S. Federal Statutory Tax Rate** | $1045 | 21.0% | $891 | 21.0% | $(891) | 21.0% |
| **State and Local Income Taxes, Net of Federal Income Tax Effect (a)** | (2709) | (54.4%) | (3587) | (84.5%) | (2663) | 62.8% |
| **Foreign Tax Effects** |  |  |  |  |  |  |
| &nbsp;&nbsp;Statutory tax rate difference between Canada and United States | (479) | (9.6%) | (770) | (18.1%) | (815) | 19.2% |
| &nbsp;&nbsp;Nondeductible stock compensation | 1327 | 26.7% | 2572 | 60.6% | 2042 | (48.1%) |
| &nbsp;&nbsp;Change in valuation allowance | 373 | 7.5% | (4709) | (111.0%) | 1681 | (39.6%) |
| &nbsp;&nbsp;Revaluation of equity/warrants | 142 | 2.9% | (1205) | (28.4%) |  | 0.0% |
| &nbsp;&nbsp;Deferred adjustments |  | 0.0% | 6918 | 163.0% |  | 0.0% |
| &nbsp;&nbsp;Other | 465 | 9.3% | 133 | 3.1% | (107) | 2.5% |
| **Changes in Valuation Allowances** | 1924 | 38.7% | 659 | 15.5% | 4128 | (97.3%) |
| **Nontaxable or Nondeductible Items** |  |  |  |  |  |  |
| &nbsp;&nbsp;IRC 280E adjustment | 26019 | 522.8% | 25337 | 597.1% | 23077 | (544.1%) |
| &nbsp;&nbsp;Return to provision true-up | (1309) | (26.3%) | 330 | 7.8% | 3234 | (76.3%) |
| &nbsp;&nbsp;Impairment of goodwill and intangible assets |  | 0.0% |  | 0.0% | 985 | (23.2%) |
| &nbsp;&nbsp;Investment in partnerships | (3487) | (70.1%) | 3467 | 81.7% | 1714 | (40.4%) |
| &nbsp;&nbsp;Other | (207) | (4.2%) | (4850) | (114.3%) | (12040) | 283.9% |
| **Changes in Unrecognized Tax Benefits** | 6362 | 127.8% | (52) | (1.2%) | 3041 | (71.7%) |
| **Other Adjustments** |  | 0.0% |  | 0.0% |  | 0.0% |
| **Effective Tax Rate** | $**29466** | **592.0%** | $**25134** | **592.4%** | $**23386** | **(551.4**<br>**%)** |

---

(a) State taxes in New Jersey, Pennsylvania and Maryland made up the majority (greater than 50 percent) of the tax effect in this category

The Company is subject to income taxes in Canada and the U.S. As the operations of the Company are predominantly U.S. based, the Company has prepared the tax rate table using the U.S. Federal tax rate of 21%.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

The principal component of deferred taxes are as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | **(In thousands)** | **(In thousands)** |
| Deferred tax assets |  |  |
| &nbsp;&nbsp;Net operating losses | $55580 | $49222 |
| &nbsp;&nbsp;Reserves | 40 | 63 |
| &nbsp;&nbsp;Share issuance costs | 1039 | 1039 |
| &nbsp;&nbsp;Intangible assets | 3901 | 4667 |
| &nbsp;&nbsp;Investment in partnerships | 11664 | 9182 |
| &nbsp;&nbsp;Lease liability | 5687 | 8510 |
| &nbsp;&nbsp;Other | 2124 | 2171 |
| **Total deferred tax assets** | $**80035** | $**74854** |
| Valuation allowance | (69546) | (61497) |
| **Net deferred tax assets** | $**10489** | $**13357** |
| Deferred tax liabilities |  |  |
| &nbsp;&nbsp;Intangible assets | $(13519) | $(14013) |
| &nbsp;&nbsp;Right of use asset | (4995) | (7772) |
| **Total deferred tax liabilities** | $**(18514)** | $**(21785)** |
| **Net deferred tax liabilities** | $**(8025)** | $**(8428)** |

---

The Company assesses available positive and negative evidence to estimate if it is more likely than not to use certain jurisdiction-based deferred tax assets including net operating loss carryovers. On the basis of this assessment, a valuation allowance was recorded during the year ended December 31, 2025.

As of December 31, 2025, the Company has $138,945 of Canadian net operating loss carryovers that expire at different times, the earliest of which is 2037 for $130. As of December 31, 2025, the Company has $25,633 of domestic federal net operating loss carryovers with no expiration date. As of December 31, 2025, the Company has various state net operating loss carryovers that expire at different times. The statute of limitations with respect to our federal returns remains open for tax years 2022 and forward.

As the Company operates in the cannabis industry, the IRS has taken the position that the Company is subject to the limitations of IRC Section 280E, under which the Company is only allowed to deduct expenses directly related to sales of product. This results in permanent differences between book and taxable income related to ordinary and necessary business expenses that are deemed non-deductible expenditures under IRC Section 280E. Therefore, the Company's effective tax rate can be highly variable and may not necessarily correlate with pre-tax income or loss.

The following table presents a reconciliation of unrecognized tax benefits:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | **(In thousands)** | **(In thousands)** |
| **Balance at beginning of year** | $**148979** | $**84485** |
| Increase based on tax positions related to current periods | 39970 | 37278 |
| Increase based on tax positions related to prior periods | 4095 | 40986 |
| Settlements with tax authorities | (15997) | (13770) |
| **Balance at end of year** | $**177047** | $**148979** |

---

Interest and penalties related to unrecognized tax benefits are recorded as components of the provision for income taxes. As of December 31, 2025 and December 31, 2024, the Company had interest and penalties accrued of $19,803 and $12,809, respectively.

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

The increase in uncertain tax positions is primarily related to tax positions based on legal interpretations that challenge the Company's tax liability under IRC Section 280E. The Company believes it is reasonably possible that the unrecognized tax benefits will increase over the next 12 months as a result of new tax positions expected to be taken with respect to IRC Section 280E.

During the year, the Company released a portion of uncertain tax benefits and related penalties and interest in the amount of $18,418.

A reconciliation of the beginning and ending amount of uncertain tax liabilities, inclusive of accruals for related penalties and interest, recorded in the consolidated balance sheets for the years presented:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | **(In thousands)** | **(In thousands)** |
| **Balance, beginning of year** | $**106991** | $**79627** |
| Reductions based on tax positions related to prior years | (15212) | (11381) |
| Additions based on tax positions related to prior years | 9842 | 38380 |
| Additions based on tax positions related to current year | 27177 | 26825 |
| Additions based on refunds received related to prior years |  | 10 |
| Reductions based on refunds requested but not received related to the prior year |  | (22463) |
| Release of tax payments on deposit and other |  | (4007) |
| **Ending carrying amount** | $**128798** | $**106991** |

---

The Company files income tax returns in the U.S. federal jurisdiction, multiple U.S. state jurisdictions, and certain non-U.S. jurisdictions. The Company and its subsidiaries are subject to examination by various U.S. and non-U.S. taxing authorities. The Company is no longer subject to U.S. federal, state, or non-U.S. income tax examinations for tax years prior to 2022, other than items under examination. The Company is currently under examination by the Internal Revenue Service for U.S. federal income tax years 2021 through 2023.

**18. General and administrative expenses**

The Company's general and administrative expenses were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| Salaries and wages | $48426 | $46076 | $41027 |
| Office and general | 10395 | 11676 | 11599 |
| Professional fees | 8562 | 11214 | 11175 |
| Share-based compensation | 5007 | 9706 | 7707 |
| Lease expense | 4694 | 5078 | 5134 |
| Sales and marketing | 4529 | 4531 | 5114 |
| Facility and maintenance | 2165 | 1971 | 1810 |
| Provision for expected credit losses | 1665 | 372 | (23) |
| Board of directors cash compensation | 797 |  |  |
| **Total** | $**86240** | $**90624** | $**83543** |

---

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

**19. Revenue, net**

The Company's disaggregated revenue by source, primarily due to the Company's contracts with its external customers were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| Retail | $172920 | $171336 | $178432 |
| Wholesale | 87638 | 96742 | 72077 |
| **Total** | $**260558** | $**268078** | $**250509** |

---

For the years ended December 31, 2025, 2024, and 2023, the Company did not have any single customer that accounted for 10% or more of the Company's revenue.

**20. Finance and other expense**

Finance and other expenses were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| Interest | $28826 | $27495 | $31104 |
| Accretion | 7465 | 6844 | 949 |
| Other (income) expense | (888) | (851) | 800 |
| **Total** | $**35403** | $**33488** | $**32853** |

---

**21. Segment information**

<u>Operating Segment</u>

The Company has determined that it operates as one reportable segment focused on the production and sale of cannabis products. While the Company manages its operations through state-level operating segments, these segments have been aggregated into one reportable segment due to similar long-term economic characteristics and other required criteria of similarity outlined in ASC 280, *Segment Reporting*, and in accordance with ASU 2023-07. The Chief Operating Decision Maker ("CODM") was determined to be the Chief Executive Officer of the Company. The CODM regularly evaluates the performance of the single reportable segment using gross profit margin as its closest measure to GAAP. Gross margin is a measure that is calculated as total revenue minus cost of goods sold, divided by total revenue. The CODM monitors this metric to assess the efficiency of the Company's production and distribution processes, as well as the effectiveness of pricing strategies.

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2023** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| **Revenue, net** | $260558 | $268078 | $250509 |
| **Cost of sales** | 124234 | 132211 | 112492 |
| **Gross profit** | 136324 | 135867 | 138017 |
| ***Gross profit margin*** | ***52.3***<br>*%*** | ***50.7***<br>*%*** | ***55.1***<br>*%*** |

---

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

<u>Assets</u>

The measure of reportable segment assets is consistent with the presentation of total consolidated assets as reported on the balance sheets.

<u>Geography</u>

The Company has subsidiaries located in Canada and the United States. For each of the twelve months ended December 31, 2025 and 2024, net revenue was primarily generated from sales in the United States. The Company's retail location in Canada generated $847, $1,042, and $925 for the year ended December 31, 2025, 2024, and 2023, respectively.

The Company had non-current assets by geography of:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | **(In thousands)** | **(In thousands)** |
| United States | $446748 | $429905 |
| Canada | 523 | 439 |
| **Total** | $**447271** | $**430344** |

---

**22. Capital management**

The Company's objective in managing capital is to ensure a sufficient liquidity position to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders. In order to achieve this objective, the Company prepares a capital budget to manage its capital structure. The Company defines capital as borrowings, equity comprised of issued share capital, share-based payments, accumulated deficit, as well as funds borrowed from related parties.

Since inception, the Company has primarily financed its liquidity needs through the issuance of share capital and debt. The equity issuances are outlined in Note 13, debt financings are outlined in Note 10, and convertible debt is outlined in Note 12.

The Company is subject to a financial covenant as a result of its loan payable with its primary lender. The Company was in compliance with its debt covenant as of December 31, 2025. In the event that, in future periods, the Company's financial results are below levels required to maintain compliance with it covenant, the Company will assess and undertake appropriate corrective initiatives with a view to allowing it to continue to comply with its covenant. Other than the covenant related to loans payable, the Company is not subject to externally imposed capital requirements.

**23. Financial instruments and risk management**

<u>Assets and liabilities measured at fair value</u>

Financial instruments recorded at fair value are estimated by applying a fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy is summarized as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Level 1 - quoted prices (unadjusted) in active markets for identical assets and liabilities

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Level 2 - inputs other than quoted prices that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices) from observable market data

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Level 3 - inputs for assets and liabilities not based upon observable market data

The following table represents the fair value amounts of financial assets and financial liabilities measured at estimated fair value on a recurring basis:

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **At December 31, 2025** | **At December 31, 2025** | **At December 31, 2025** | **At December 31, 2024** | **At December 31, 2024** | **At December 31, 2024** |
|  | **Level 1** | **Level 2** | **Level 3** | **Level 1** | **Level 2** | **Level 3** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| **Assets** |  |  |  |  |  |  |
| &nbsp;&nbsp;Cash and cash equivalents | $37414 |  |  | $26381 |  |  |
| &nbsp;&nbsp;Restricted cash | 110 |  |  | 606 |  |  |
| &nbsp;&nbsp;Purchase option |  |  | 13000 |  |  |  |
| **Total Assets** | $**37524** | $**—** | $**13000** | $**26987** | $**—** | $**—** |
| **Liabilities** |  |  |  |  |  |  |
| &nbsp;&nbsp;Contingent consideration payable |  |  |  |  | 3293 |  |
| &nbsp;&nbsp;Detachable warrants |  |  |  |  | 451 |  |
| &nbsp;&nbsp;Bifurcated conversion options |  | 3188 |  |  | 92 |  |
| **Total Liabilities** | $**—** | $**3188** | $**—** | $**—** | $**3836** | $**—** |

---

There were no transfers between the levels of fair value hierarchy during the years ended December 31, 2025 or December 31, 2024.

The valuation approaches and key inputs for each category of assets or liabilities that are classified within Level 1 and Level 2 of the fair value hierarchy are presented below.

<u>Level 1</u>

Cash, cash equivalents, and restricted cash represent financial instruments for which the carrying amount approximates fair value due to their short-term maturities.

<u>Level 2</u>

The Company's derivative liability consists of conversion options related to the convertible debenture offering and Union Chill transaction (see Note 12).

The following table summarizes the changes in the derivative liability:

---

| | |
|:---|:---|
| **Balance at December 31, 2023** | $**5162** |
| Fair value gain on revaluation of warrants and conversion option | (4549) |
| Effects of movements in foreign exchange | (70) |
| **Balance at December 31, 2024** | $**543** |
| Conversion option issued in Union Chill transaction | 2104 |
| Fair value loss on revaluation of warrants and conversion option | 535 |
| Effects of movements in foreign exchange | 6 |
| **Balance at December 31, 2025** | $**3188** |

---

*<u>Bifurcated conversion options</u>*

The conversion option issued as a part of the June and August 2023 private placement (see Note 12) has been measured at fair value as of December 31, 2025. Key assumptions used in the Black-Scholes Model were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| Option exercise price | $2.01 | $2.01 |
| Annual volatility | 158.3% | 86.9% |
| Annual risk-free rate | 3.76% | 4.25% |
| Expected term (in years) | 0.48 - 0.59 | 1.48 - 1.59 |

---

The conversion option issued as a part of the Union Chill transaction (see Note 12) has been measured at fair value as of December 31, 2025. Key assumptions used in the Black-Scholes Model were as follows:

------

**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

---

| | |
|:---|:---|
|  | **December 31, 2025** |
| Option exercise price | $1.89 |
| Annual volatility | 105.3% |
| Annual risk-free rate | 3.61% |
| Expected term (in years) | 4.00 |

---

<u>Risk Management</u>

The Company's risk exposure and the impact on the Company's financial instruments are summarized below:

(a) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, and accounts receivable, net. The Company assesses the credit risk of trade receivables by evaluating the aging of trade receivables based on the invoice date. The carrying amounts of trade receivables are reduced through the use of an allowance account and the amount of the loss is recognized in the Consolidated Statements of Operations and Comprehensive Loss. When a trade receivable balance is considered uncollectible, it is written off against the allowance for expected credit losses.

Subsequent recoveries of amounts previously written off are credited against operating expenses in the Consolidated Statements of Operations and Comprehensive Loss. The Company regularly monitors credit risk exposure and takes steps to mitigate the likelihood of these exposures resulting in actual loss. The Company had no customers whose balance is greater than 10% of total trade receivables as of December 31, 2025.

(b) Liquidity risk

The Company is exposed to liquidity risk, or the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages liquidity risk through ongoing review of its capital requirements. The Company's objective with respect to its capital management is to ensure it has sufficient cash resources to maintain its ongoing operations.

(c) Market Risk

The significant market risk exposures to which the Company is exposed are foreign currency risk and interest rate risk.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i)Foreign currency risk:

Foreign currency risk is the risk that a variation in exchange rates between the Canadian dollar and U.S. dollar and other foreign currencies will affect the Company's operations and financial results.

The Company holds cash and cash equivalents in currencies other than their functional currency. The Company does not currently engage in currency hedging activities to limit the risks of currency fluctuations. Consequently, fluctuations in foreign currencies could have a negative impact on the profitability of the Company's operations. However, as of the year ended December 31, 2025, a 10% change in the value of the U.S. dollar compared to the Canadian dollar would not result in a material impact on unrealized foreign exchange for the Company.

ii)Interest rate risk:

Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. In respect of financial assets, the Company's policy is to invest excess cash at floating rates of interest in cash equivalents, in order to maintain liquidity, while achieving a satisfactory return. Fluctuations in interest rates impact the value of cash equivalents. The Company's investments in guaranteed investment certificates bear a fixed rate and are cashable at any time prior to maturity date. The Company does not have significant cash equivalents for the year ended December 31, 2025. The Company's loans payable have fixed interest rates from 6.00% to 12.75% per annum. All other financial liabilities are non-interest-bearing instruments.

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**TERRASCEND CORP**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

*(In thousands, except per share/unit amounts)*

**24. Commitments and contingencies**

<u>Commitments</u>

As of December 31, 2025, the Company did not have any material commitments.

<u>Legal proceedings</u>

In the ordinary course of business, the Company is involved in a number of lawsuits incidental to its business, including litigation related to intellectual property, product liability, employment, and commercial matters. Although it is difficult to predict the ultimate outcome of these matters, management believes that any ultimate liability would not have a material adverse effect on the Company's Consolidated Balance Sheets or Consolidated Statements of Operations and Comprehensive Loss. At December 31, 2025, there were no pending lawsuits that could reasonably be expected to have a material effect on the results of the Company's Consolidated Financial Statements.

**25. Subsequent events**

On January 2, 2026, the Company exercised the Union Chill Option and paid the remaining cash consideration of $4,000. Upon exercise, the Company obtained a transferable option to acquire a 65% interest in Union Chill at a nominal exercise price and entered into a series of agreements granting the Company certain protective rights. As a result, the Company determined that it became the primary beneficiary of Union Chill under ASC 810 and began consolidating Union Chill as a VIE as at January 2, 2026. The Company determined it was not the primary beneficiary prior to exercising the 35% option.

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## Exhibit 4.1

**Exhibit 4.1** 

**DESCRIPTION OF THE REGISTRANT'S SECURITIES**

**REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES**

**EXCHANGE ACT OF 1934**

TerrAscend Corp. ("TerrAscend" or the "Company") only has common shares, no par value ("Common Shares"), registered under Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In addition, the Company has authorized Series A Convertible Preferred Shares, no par value, Series B Convertible Preferred Shares, no par value, Series C Convertible Preferred Shares, no par value, Series D Convertible Preferred Shares, no par value, Exchangeable Shares, no par value and Proportionate Voting Shares, no par value, which are not registered under Section 12 of the Exchange Act.

*The following description sets forth certain material provisions of these securities. The following summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the applicable provisions of the Company's articles of incorporation, as amended (the "Articles"), the Company's by-laws (the "By-laws"), and forms of warrants, each of which is filed as an exhibit to the Company's Annual Report on Form 10-K of which this Exhibit 4.1 is a part. We encourage you to review the terms and provisions set forth therein for additional information.*

**Description of the Company's Securities**

***Common Shares***

TerrAscend Corp. is authorized to issue an unlimited number of the Company's Common Shares.

<u>Voting Rights, Dividends and Dissolution</u>

The holders of the Common Shares are entitled to one vote per share at all meetings of the shareholders of the Company, except for meetings at which only holders of another specified class or series of shares are entitled to vote separately as a class or series, and do not have cumulative voting rights. The holders of the Common Shares are entitled to receive, subject to the rights of the holders of any other class of shares, any dividend declared by the Company. If, as and when dividends are declared by the directors of the Company, each Common Share is entitled to 0.001 times the amount paid or distributed per proportionate voting share of the Company ("Proportionate Voting Share"). In the event of a dissolution, liquidation or winding-up of the Company, the holders of the Common Shares are, subject to the rights of any other class of shares, entitled to receive the remaining property of the Company on the basis that each Common Share is entitled to 0.001 times the amount distributed per Proportionate Voting Share, but otherwise there is no preference or distinction among or between the Proportionate Voting Shares and the Common Shares.

<u>Conversion at Option of Holder</u>

Each issued and outstanding Common Share may at any time, at the option of the holder, be converted into 0.001 of a Proportionate Voting Share. The conversion right may be exercised at any time and from time to time in the manner specified in the Articles of the Company. Exercise of the conversion right requires delivery of a written notice to the Company's transfer agent signed by the registered holder of the Common Shares (or by his, her or its duly authorized representative) and be accompanied by the certificate or certificates representing the Common Shares, or, if uncertificated, such other evidence of ownership as the transfer agent may require, in respect of which the holder wishes to exercise the right of conversion. This conversion right of the holders of the Common Shares terminates on the occurrence of a Proportionate Share Conversion Event (as defined below).

<u>Effect of Proportionate Voting Shares, Exchangeable Shares and Preferred Shares on Common Shares</u>

The Company is authorized to issue an unlimited number of Proportionate Voting Shares, exchangeable shares of the Company ("Exchangeable Shares") and preferred shares of the Company ("Preferred Shares") in one or more series, and to fix the number, designation, rights, privileges, restrictions, and conditions of Preferred Shares of each series prior to their issuance, including voting rights, dividend rights, conversion rights, liquidation preferences, and sinking fund provisions. Currently, there are four series of Preferred Shares: Series A, Series B, Series C and Series D.

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*Voting Rights*

The holders of Proportionate Voting Shares are entitled to 1,000 votes for each Proportionate Voting Share at all meetings of the shareholders of the Company, except for meetings at which only holders of another specified class or series of shares of the Company are entitled to vote separately as a class or series. The holders of Exchangeable Shares and Preferred Shares are not entitled to vote at meetings of the shareholders of the Company.

*Conversion and Exchange Rights*

Each issued and outstanding Proportionate Voting Share may at any time, at the option of the holder, be converted into 1,000 Common Shares. The conversion right may be exercised from time to time in the manner specified in the

Articles of the Company. If the directors of the Company, in good faith, determine that it is no longer advisable to maintain the Proportionate Voting Shares as a separate class of shares, then, effective on the date approved by the directors, all of the Proportionate Voting Shares shall, without any further action on the part of any holder of Proportionate Voting Shares, immediately and automatically be converted into Common Shares at the conversion ratio of 1,000 Common Shares for each Proportionate Voting Share (a "Proportionate Share Conversion Event").

Each issued and outstanding Exchangeable Share may, at the option of the holder, be exchanged for one Common Share at any time following the Exchange Start Date, as specified in the Articles of the Company. "Exchange Start Date" means the date following the satisfaction of the following terms and conditions: (i) the Triggering Event has occurred; and (ii) all stock exchanges upon which the securities of the holder of the Exchangeable Share (or any entity of which the holder is a subsidiary) are listed for trading have approved the exchange of the Exchangeable Share into a Common Share, to the extent that any such approval is required. In this paragraph, "Triggering Event" means the earlier of: (i) the date that federal laws regarding the cultivation, distribution or possession of marijuana in the United States are changed, such that the Company is fully compliant with federal regulation in the United States; and (ii) the date that all stock exchanges upon which the securities of the holder of the Exchangeable Share (or any entity of which the holder is a subsidiary) are listed for trading have amended their policies to permit listed issuers to invest in entities that are engaged in the cultivation, distribution or possession of marijuana in states in the United States where it is legal to do so, such that the holder of the Exchangeable Share (and any entity of which the holder is a subsidiary) is fully compliant with all rules and regulations of all stock exchanges upon which the securities of the holder of the Exchangeable Shares (or any entity of which the holder is a subsidiary) are listed for trading.

Each Preferred Share may, at any time at the option of the holder, be converted into Common Shares, as specified in the Articles of the Company. Each Series A and Series C Preferred Share is convertible into one Common Share, subject to certain adjustments. Each Series B and D Preferred Share is convertible into 1,000 Common Shares, subject to certain adjustments. The Preferred Shares are also subject to automatic conversion in the event of certain change of control transactions.

*Dividends and Dissolution*

The holders of the Proportionate Voting Shares are entitled to receive, subject to the rights of the holders of any other class of shares, any dividend declared by the Company. If, as and when dividends are declared by the Company's board of directors, each Proportionate Voting Share is entitled to 1,000 times the amount paid or distributed per Common Share. In the event of a dissolution, liquidation or winding-up of the Company, the holders of the Proportionate Voting Shares are, subject to the rights of any other class of shares, entitled to receive the remaining property of the Company on the basis that each Proportionate Voting Share is entitled to 1,000 times the amount distributed per Common Share, but otherwise there is no preference or distinction among or between the Proportionate Voting Shares and the Common Shares.

The holders of Exchangeable Shares are not entitled to receive any dividends. In the event of a dissolution, liquidation or winding-up of the Company, the holders of the Exchangeable Shares are not entitled to receive any amount, property or assets of the Company.

The holders of Preferred Shares are not entitled to receive any dividends, though the Preferred Shares are entitled to certain conversion ratio adjustments in the event the Company pays certain dividends. The Preferred Shares of each series, with respect to the distribution of assets of the Company in the event of the liquidation, dissolution or winding-up, rank on a parity with the Preferred Shares of every other Series of Preferred Shares, and are entitled to preference over the Proportionate Voting Shares, Common Shares and Exchangeable Shares of the Company. The liquidation

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preference of the Series A and Series B Preferred Shares is $2,000 per share and the liquidation preference of the Series C and D Preferred Shares is $3,000 per share, with each amount subject to adjustment in various events.

*Modification of Rights*

Subject to the Business Corporations Act (Ontario), the special rights and restrictions attached to any class of the TerrAscend's shares may be modified if the amendment is authorized by not less than 66⅔% of the votes cast at a meeting of holders of shares duly held for that purpose. If the holders of Proportionate Voting Shares, as a class, the holders of Common Shares, as a class, or the holders of Exchangeable Shares, as a class, are to be affected in a manner materially different from any other classes of shares, the amendment must, in addition, be authorized by not

less than 66⅔% of the votes cast at a meeting of the holders of the class of shares which is affected differently.

<u>Foreign Ownership of Common Shares</u>

There is no limitation imposed by TerrAscend's Articles or By-laws on the right of non-Canadian residents to hold Common Shares or exercise voting rights on Common Shares. The following provides a brief summary of certain limitations imposed by Canadian laws on the rights of non-Canadian residents to hold Common Shares or exercise voting rights on Common Shares, but should not be deemed to be comprehensive or complete in any part, and any such holder or potential holder of Common Shares should undertake a more thorough review of such applicable laws, or consult the advice or services of a qualified expert or professional.

*Competition Act*

Limitations on the ability to acquire and hold Common Shares may be imposed by the Competition Act (Canada). The legislation permits the Commissioner of Competition of Canada ("Commissioner"), to review any acquisition or establishment, directly or indirectly, including through the acquisition of shares, of control over or of a significant interest in the Company. This legislation grants the Commissioner jurisdiction, for up to three years after the acquisition has been substantially completed, to seek a remedial order, including an order to prohibit the acquisition or require divestitures, from the Canadian Competition Tribunal, which order may be granted where the Competition Tribunal finds that the acquisition prevents or lessens, or is likely to prevent or lessen, competition substantially.

This legislation also requires any person or persons who intend to acquire more than 20% of Common Shares or, if such person or persons already own more than 20% of Common Shares prior to the acquisition, more than 50% of Common Shares, to file a notification with the Canadian Competition Bureau if certain financial thresholds are exceeded. Where a notification is required, unless an exemption is available, the legislation prohibits completion of the acquisition until the expiration of the applicable statutory waiting period, unless the Commissioner either waives or terminates such waiting period.

*Investment Canada Act*

Under the Investment Canada Act an "acquisition of control" of a Canadian business by a "non-Canadian" (as determined pursuant to the Investment Canada Act) is either (i) subject to review and approval prior to completion (a "Reviewable Transaction") or (ii) subject to a requirement to submit a notification not later than 30 days after closing. An investment will be a Reviewable Transaction where the applicable financial threshold is met. A Reviewable Transaction may not be implemented until an application for review has been filed and the responsible Minister of the federal cabinet has determined that the investment is likely to be of "net benefit to Canada" taking into account certain factors set out in the Investment Canada Act.

The Investment Canada Act contains various rules to determine if there has been an "acquisition of control" by a non-Canadian. For example, for purposes of determining whether an investor has acquired control of a corporation by acquiring shares, the following general rules apply, subject to certain exceptions: the acquisition of a majority of the undivided ownership interests in the voting shares of the corporation is deemed to be acquisition of control of that corporation; the acquisition of less than a majority, but one third or more, of the voting shares of a corporation or of an equivalent undivided ownership interest in the voting shares of the corporation is presumed to be acquisition of control of that corporation unless it can be established that, on the acquisition, the corporation is not controlled in fact by the acquirer through the ownership of voting shares; and the acquisition of less than one third of the voting shares of a corporation or of an equivalent divided ownership interest in the voting shares of the corporation is deemed not to be acquisition of control of that corporation.

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The Investment Canada Act also includes a discretionary national security review regime which allows the federal government to review a much broader range of investments by a non-Canadian to "acquire, in whole or part, or to establish an entity carrying on all or any part of its operations in Canada" where the federal government believes that the investment by a non-Canadian could be "injurious to national security." No financial threshold applies to a national security review. The federal government has broad discretion to determine whether an investor is a non-Canadian and therefore subject to national security review. A national security review may occur on a pre- or post-closing basis.

*Exchange Controls*

There are no government laws, decrees or regulations in Canada which restrict the export or import of capital or which affect the remittance of dividends, interest or other payments to non-resident holders of Common Shares. Any remittances of dividends to United States residents and to other non-residents are, however, subject to withholding tax.

*Certain Canadian Federal Income Taxation*

The following general summary describes the principal Canadian federal income tax consequences applicable pursuant to the *Income Tax Act* (Canada) and the regulations thereunder (collectively, the "Tax Act") and the Canada-United States Tax Convention (1980) as amended by the Protocols thereto (the "Canada-US Treaty") to the holding and disposition of Common Shares.

This summary is generally applicable to beneficial owners of Common Shares each of whom, at all relevant times and for purposes of the Tax Act and the Canada-US Treaty: (i) is neither resident nor deemed to be resident in Canada; (ii) is resident solely in the United States and is entitled to benefits of the Canada-US Treaty; (iii) does not use or hold, and is not deemed to use or hold Common Shares in, or in the course of, carrying on a business in Canada; (iv) deals at arm's length with and is not affiliated with the Company; (v) holds Common Shares as capital property; (vi) is not an "authorized foreign bank" or an insurer that carries on business in Canada and elsewhere; (vii) is not a "financial institution" or a "specified financial institution"; (viii) that has not entered into or will not enter into a "derivative forward agreement" or "synthetic disposition arrangement" in respect of the Common Shares; (ix) that does not receive dividends on Common Shares under or as part of a "dividend rental arrangement", all as defined in the Tax Act; (x) is not exempt from tax under Part I of the Tax Act; and (xi) does not have and has not had, at any time, a "permanent establishment" (as defined in the Canada-US Treaty) of any kind in Canada (each such holder, a "Non-Resident Holder"). Generally, a Non-Resident Holder's Common Shares will be considered to be capital property of the Non-Resident Holder provided that the Non-Resident Holder is not a trader or dealer in securities, does not acquire, hold or dispose of (or is not deemed to have acquired, held or disposed of) the Common Shares in one or more transactions considered to be an adventure or concern in the nature of trade, and does not hold or use (or is not deemed to hold or use) the Common Shares in the course of carrying on a business..

This summary is based on the current provisions of the Tax Act and the Canada-US Treaty in force as of he date prior to the date hereof and the Company's understanding of the current publicly available administrative practices and assessing policies of the Canada Revenue Agency (the "CRA"). This summary also takes into account all specific proposals to amend the Tax Act (the "Proposed Amendments") announced by or on behalf of the Minister of Finance (Canada) in writing prior to the date hereof and assumes that all Proposed Amendments will be enacted in the form proposed although there can be no assurance that the Proposed Amendments will be enacted in the form proposed or at all. Except for the Proposed Amendments, this summary does not take into account or anticipate any changes in law, whether by legislative, governmental or judicial action or decision, nor does it take into account other federal or any provincial, territorial or foreign income tax considerations, which may differ from the Canadian federal income tax considerations discussed below. There can be no assurance that the CRA will not change its administrative policies or assessing practices. This summary is of a general nature only and is not intended to be, and should not be construed to be, legal, business or tax advice to any particular holder or prospective holder of Common Shares, and no opinion or representation with respect to the tax consequences to any holder or prospective holder of Common Shares is made. Accordingly, holders and prospective holders of Common Shares should consult their own tax advisors with respect to the income tax consequences of purchasing, owning and disposing of Common Shares in their particular circumstances.

*Currency Conversion*

For the purposes of the Tax Act, all amounts expressed in a currency other than Canadian dollars relating to the acquisition, holding or disposition of Common Shares, including dividends, adjusted cost base and proceeds of

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disposition, must be determined in Canadian dollars using the relevant rate of exchange as determined in accordance with the Tax Act.

*Dividends on Common Shares*

Dividends paid or credited or deemed to be paid or credited by the Company to a Non-Resident Holder will generally be subject to Canadian withholding tax at the rate of 25% of the gross amount of such dividend, subject to any reduction in the rate of such withholding to which the Non-Resident Holder is entitled under an applicable income tax treaty between Canada and the country where the Non-Resident Holder is resident. For example, under the Canada-US Treaty, the withholding tax rate in respect of a dividend paid to a Non-Resident Holder who is the beneficial owner of the dividend and is resident in the United States for purposes of, and entitled to full benefits under, the Canada-US Treaty, is generally reduced to 15% (or to 5% if the Non-Resident Holder is a company that owns, directly or indirectly, at least 10% of the voting stock of the Company).

*Disposition of Common Shares*

A Non-Resident Holder will generally not be subject to tax under the Tax Act in respect of any capital gain realized on a disposition of Common Shares of the Company, nor will capital losses arising therefrom be recognized under the Tax Act, unless the Common Shares disposed of constitute "taxable Canadian property" of the Non-Resident Holder and the Non-Resident Holder is not entitled to relief under the Canada-US Treaty. Provided that, at the time of disposition, the Common Shares are listed on a "designated stock exchange", as defined in the Tax Act (which currently includes the TSX), the Common Shares generally will not constitute "taxable Canadian property" of a Non-Resident Holder at that time, unless, at any time in the sixty (60) month period preceding the disposition the following two conditions were met concurrently: (a) 25% or more of the issued shares of any class or series of the capital stock of the Company were owned by any combination of (i) the Non-Resident Holder, (ii) persons with whom the Non-Resident Holder did not deal at arm's length and (iii) partnerships in which persons referred to in (i) or (ii) hold a membership interest (directly or indirectly through one or more partnerships); and (b) more than 50% of the fair market value of the Common Shares was derived, directly or indirectly, from any combination of (i) real or immovable property situated in Canada, (ii) "Canadian resource properties" (as defined in the Tax Act), (iii) "timber resource properties" (as defined in the Tax Act), and (iv) options in respect of, or an interest in, or for civil law rights in, the property described in (i) to (iii), whether or not such property exists. Notwithstanding the foregoing, a Common Share may in certain circumstances be deemed to be taxable Canadian property of a Non-Resident Holder for purposes of the Tax Act.

Even if the Common Shares are taxable Canadian property to a Non- Resident Holder, any capital gain realized on the disposition or deemed disposition of such Common Shares may be exempt from tax under the Tax Act if such Common Shares are "treaty-protected property" for the purposes of the Tax Act.

A Non-Resident Holder whose Common Shares are, or may be, taxable Canadian property should consult their own tax advisors.

**Warrants**

***Warrants to Purchase Common Shares***

As of December 31, 2025, there were 23,253,480 warrants to purchase Common Shares outstanding (the "Common Share Warrants") at a weighted average exercise price of $4.34 per share. Each Common Share Warrant entitles the registered holder to purchase one Common Share at a price per share described below and subject to adjustment as discussed below.

*Exercisability*. The Common Share Warrants are exercisable:

• With respect to all 23,253,480 Common Share Warrants outstanding, such Common Share Warrants may be exercised to purchase Common Shares at the holder's option.

*Exercise Price.* The exercise price per Common Share purchasable upon exercise of the Common Share Warrants is:

• USD$1.62 as to 344,140 Common Share Warrants outstanding;

• USD$1.81 as to 435,212 Common Share Warrants outstanding;

• CAD$3.74 as to 2,152,733 Common Share Warrants outstanding;

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• CAD$5.14 as to 15,656,242 Common Share Warrants outstanding;

• CAD$5.95 as to 2,225,714 Common Share Warrants outstanding;

• CAD$6.49 as to 333,723 Common Share Warrants outstanding;

• CAD$15.28 as to 1,926,983 Common Share Warrants outstanding; and

• CAD$17.19 as to 178,735 Common Share Warrants outstanding, each subject to adjustment, as described below.

*Expiration*. The Common Share Warrants will expire on:

• December 31, 2032 as to 22,474,130 Common Share Warrants outstanding;

• July 2, 2027 as to 344,140 Common Share Warrants outstanding; and

• July 7, 2026 as to 435,212 Common Share Warrants outstanding.

*Transferability*. Subject to applicable laws, the Common Share Warrants may be transferred at the option of the holders upon completion and delivery to the Company of the transfer form.

*Adjustments; Change in Control Transaction.* The exercise price and Common Shares issuable upon exercise of the Common Share Warrants are subject to appropriate adjustment in the event of certain share dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company's Common Shares. Further, the exercise price and Common Shares issuable upon exercise of the Common Share Warrants are subject to appropriate adjustment in the event the Company consummates certain change in control or capital reorganization transactions (each as defined in such Common Share Warrant) as set forth in such Common Share Warrants.

The exercise price and Common Shares issuable upon exercise of the Common Share Warrants are subject to adjustment pursuant to a formula provided for in the Common Share Warrant in the event the Company shall provide a rights offering to purchase Common Shares (or securities convertible or exchangeable into Common Shares) at a price per Common Share (or having a conversion or exchange price per Common Share) less than 95% of the current market price.

Additionally, with respect to 22,474,130 Common Share Warrants, in the event the Company consummates an issuer bid or tender exchange offer at a price greater than the current market price, the exercise price shall be adjusted according to the formula set forth in such Common Share Warrants.

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## Exhibit 10.12

***Execution Version***

<u>[CERTAIN INFORMATION, IDENTIFIED BY, AND REPLACED WITH, A MARK OF "[\*\*\*]" HAS</u>

<u>BEEN EXCLUDED FROM THIS DOCUMENT BECAUSE IT IS BOTH (I) NOT MATERIAL AND</u>

<u>(II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.]</u>

**<u>AMENDMENT NO. 4 TO LOAN AGREEMENT</u>**

This **AMENDMENT NO. 4 TO LOAN AGREEMENT** (this "<u>Fourth Amendment</u>"), dated March 4, 2026 (the "<u>Execution Date</u>"), is made by and among TerrAscend Corp., an Ontario corporation ("<u>Parent</u>"), as Guarantor, each Subsidiary of Parent identified on the signature pages hereto as "BORROWERS" (collectively, the "<u>Borrowers</u>", and together with Parent, the "<u>Loan Parties</u>"), each of the Lenders party hereto, and FG Agency Lending LLC, as administrative agent for the Lenders (in such capacity, the "<u>Agent</u>").

## RECITALS:
**WHEREAS**, reference is hereby made to the Loan Agreement, dated as of August 1, 2024 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "<u>Existing Loan</u> <u>Agreement</u>" and, as amended by this Fourth Amendment, the "<u>Amended Loan Agreement</u>"), by and among the Guarantor, the Loan Parties, the Lenders from time to time party thereto, and the Agent. Capitalized terms used but not defined herein have the meaning provided in the Amended Loan Agreement;

**WHEREAS**, the Loan Parties have requested and the Agent and Lenders party hereto, which constitute Required Lenders under the Existing Loan Agreement and the Specified Acquisition Delayed Term Loan Lenders (as defined in the Existing Loan Agreement) affected by the amendments hereunder, are prepared to amend certain of the terms and provisions of the Existing Loan Agreement, subject to the conditions and in reliance on the representations set forth herein.

**NOW, THEREFORE**, in consideration of the premises and agreements, provisions and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

SECTION 1. <u>Amendments to Loan Agreement</u>. Subject to the conditions set forth herein and in reliance on the representations and warranties set forth herein, as of December 26, 2025 (the "<u>Fourth</u> <u>Amendment Effective Date</u>"), the Existing Loan Agreement is hereby amended as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Section 1.1</u> of the Existing Loan Agreement is amended by deleting the following defined terms:

"<u>Specified Acquisition Delayed Term Loan</u>"

"<u>Specified Acquisition Delayed Term Loan Commitment</u>"

"<u>Specified Acquisition Delayed Term Loan Effective Date</u>"

"<u>Specified Acquisition Delayed Term Loan Face Amount</u>"

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"<u>Specified Acquisition Delayed Term Loan Lender</u>"

"<u>Specified Acquisition Delayed Term Loan Request Period</u>"

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Section 1.1</u> of the Existing Loan Agreement is amended by amending and restating the following defined terms in their entirety:

""<u>Commitment</u>" means, collectively, (a) with respect to any Initial Term Loan Lender, the Initial Term Loan Commitment, (b) with respect to any Delayed Term Loan Lender, the Delayed Term Loan Commitment, and (c) with respect to any 2025 Incremental Term Loan Lender, the 2025 Incremental Term Loan Commitment.

"<u>Omnibus Collateral Assignment</u>" means the Omnibus Collateral Assignments entered into from time to time in favor of Agent of each Borrower's rights under,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) with respect to the Omnibus Collateral Assignment dated as of March 4, 2026, any Union Chill Acquisition Document, (ii) with respect to the Omnibus Collateral Assignment of Acquisition Documents (Ratio) dated as of the Second Amendment Effective Date, any Ratio Acquisition Document (iii) with respect to any other Omnibus Collateral Assignment, (a) any Management Agreement, (b) any Lease Agreement and equipment lease agreement, (c) any Cannabis License and (d) any Material Contract, and (iv) with respect to any Omnibus Collateral Assignment entered into after the Second Amendment Effective Date, any Material Contract that is a Management Agreement, a Lease Agreement, and/or any material agreement pursuant to a Permitted Acquisition, but in each case, excluding any such agreement to the extent that it constitutes Excluded Collateral (as defined in the Security Agreement or the Canadian Pledge and Security Agreement, as applicable)."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Section 1.1</u> of the Existing Loan Agreement is amended by amending and restating paragraph (a) of the defined term "<u>Permitted Acquisition Consent Condition</u>" in its entirety to read as follows:

"(a) the Borrower Representative shall have notified the Agent of its desire to enter into and consummate such applicable Acquisition no later than five (5) Business Days (or such lesser period as may be agreed to by the Agent in its sole discretion) prior to entering into any applicable letter of intent or other comparable agreement with the applicable seller and, concurrently with delivery of such notice, the Borrower Representative shall deliver to the Agent (i) a substantially final draft of such applicable letter of intent or other comparable agreement proposed to be entered into and (ii) any financial, operational or other information of the target of such Acquisition available to the Borrower Representative (such notice, the "<u>Acquisition Notice</u>");"

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Section 1.1</u> of the Existing Loan Agreement is amended by amending and restating paragraph (i) of the defined term "<u>Permitted Refinancing of the [\*\*\*]</u>" in its entirety to read as follows:

"(i) the refinanced or modified [\*\*\*]are expressly subordinate in right of payment to all Debt of such Group Company under the Loan Documents and the Loan

------

Parties have delivered or caused to be delivered to the Agent a Subordination Agreement executed by the holders of such [\*\*\*] on terms and conditions reasonably satisfactory to the Agent."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Section 1.1</u> of the Existing Loan Agreement is amended by adding the following new defined term in appropriate alphabetical order:

""<u>Fourth Amendment Effective Date</u>" means December 26, 2025."

""<u>[\*\*\*] Facility</u>" means the Debt and other obligations evidenced by the Standard Agreement and General Conditions between Owner and Construction Manager (where the CM is At-Risk) dated as of March 4, 2026, by and between TerrAscend NJ, LLC and [\*\*\*]; provided that, the aggregate principal amount of such Debt and other obligations shall not at any time exceed $2,590,000."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)<u>Section 2.1(d)</u> of the Existing Loan Agreement is amended and restated in its entirety to read as follows:

"(d) <u>[Reserved]</u>."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)<u>Section 5.4</u> of the Existing Loan Agreement is amended and restated in its entirety to read as follows:

"<u>[Reserved]</u>."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)<u>Section 7.2(d)</u> of the Existing Loan Agreement is amended by (i) deleting "and" immediately preceding clause (viii), (ii) inserting a semicolon at the end of clause (vii) and (iii) adding the following clause prior to the end of the paragraph:

"; and (ix) a summary of all Debt suffered to remain outstanding in reliance on <u>Section 8.2(w)</u> as of the most recently ended fiscal quarter."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>Section 7.3</u> of the Existing Loan Agreement is amended and restated in its entirety to read as follows:

"<u>Use of Proceeds</u>. The proceeds of the Initial Term Loan made on the Closing Date shall be used only as described in the letter of direction provided by the Borrowers to the Agent on the Closing Date in connection with the sources and uses of the Initial Term Loan and for ordinary working capital purposes of the Borrowers. The proceeds of the 2025 Incremental Term Loan made on the Second Amendment Effective Date shall be used only as described in the letter of direction provided by the Borrowers to the Agent on the Second Amendment Effective Date in connection with the sources and uses of the 2025 Incremental Term Loan and for growth capital expenditures, and other general corporate purposes, of the Borrowers."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)Each of <u>Section 8.2(h)</u>¸<u>Section 8.2(s)</u>, and <u>Section 8.2(w)</u> of the Existing Loan Agreement is amended and restated in its entirety to read as follows:

"(h) Debt existing as of the Fourth Amendment Effective Date and set forth

------

on <u>Schedule 8.2</u> and any Permitted Refinancing Debt in respect of such Debt;"

"(s) unsecured deferred purchase price obligations (including earn-outs) incurred in connection with any Permitted Acquisition by a Loan Party or a Restricted Subsidiary consented to by Agent in writing (provided, for the avoidance of doubt, that Agent in its sole discretion may require that such obligations be subject to a Subordination Agreement);"

"(w) additional unsecured Debt in an aggregate amount not exceeding the greater of (i) the amount outstanding under the Palmer Facility or (ii) $2,000,000 at any time outstanding;"

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)<u>Schedule 1.1(a)</u> to the Existing Loan Agreement is amended and restated in its entirety to read as set forth in <u>Schedule 1.1(a)</u> attached as Annex A hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)<u>Schedule 8.2</u> to the Existing Loan Agreement is amended and restated in its entirety to read as set forth in <u>Schedule 8.2</u> attached as Annex B hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)<u>Exhibit E</u> to the Existing Loan Agreement is amended and restated in its entirety to read as set forth in <u>Exhibit E</u> attached as Annex C hereto.

SECTION 2. <u>Fees and Expenses</u>. To the extent required under (and subject to the terms of) Section

11.5 of the Amended Loan Agreement, the Loan Parties shall reimburse the Agent and the Lenders for all reasonable and documented legal fees and other reasonable out-of-pocket expenses incurred in connection with this Fourth Amendment and the transactions contemplated hereby.

SECTION 3. <u>Effective Date</u>. This Amendment shall be effective upon satisfaction of each of the conditions set forth below (and provided that Section 1 of this Amendment shall be effective as of the Fourth Amendment Effective Date):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)this Fourth Amendment shall have been executed by the Loan Parties, the Lenders party hereto, which constitute the Required Lenders under the Existing Loan Agreement and the Specified Acquisition Delayed Term Loan Lenders affected by the amendments hereunder, and the Agent, and counterparts hereof as so executed shall have been delivered to the Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)the Omnibus Collateral Assignment with respect to the Union Chill Acquisition Documents shall have been executed by the Loan Parties party thereto and the Agent, and counterparts thereof as so executed shall have been delivered to the Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)a Pledge Amendment in the form of Exhibit B to the Pledge Agreement duly executed by TER NJ Dispensing 1, LLC shall have been delivered to the Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)the representations and warranties of the Loan Parties contained herein or in the other Loan Documents, after giving effect to this Fourth Amendment, shall be true and correct in all material respects (or in all respects if any such representation or warranty is already qualified by materiality, Material Adverse Effect or other similar language) on and as of the Execution Date, except to the extent that such representations and warranties expressly relate to an earlier date, in which event such representations and warranties shall be true and correct in all material respects (or in all respects if any such representation or warranty is qualified per its terms by materiality, Material Adverse Effect or other similar language) as of such earlier date;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)no Default or Event of Default has occurred and is continuing, nor shall any Default or Event of Default exist immediately after giving effect to this Fourth Amendment; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)to the extent invoiced two (2) Business Days prior to the Execution Date, the Loan Parties shall have paid all fees, costs and expenses required to be reimbursed pursuant to <u>Section 2</u> above.

SECTION 4. <u>Representations and Warranties</u>. Each Loan Party represents and warrants to the Agent and the Lenders on the Execution Date that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)the execution, delivery and performance of this Fourth Amendment is within its corporate or other organizational powers and has been duly authorized by all necessary corporate or other organizational action of it;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)this Fourth Amendment has been duly executed and delivered by it and is a legal, valid and binding obligation of it, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency or similar laws affecting creditors' rights generally and to general principles of equity and principles of good faith and dealing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)the representations and warranties of the Loan Parties contained herein or in the other Loan Documents, after giving effect to this Fourth Amendment, are true and correct in all material respects (or in all respects if any such representation or warranty is already qualified by materiality, Material Adverse Effect or similar language) on and as of the Execution Date, except to the extent that such representations and warranties expressly relate to an earlier date, in which event such representations and warranties are true and correct in all material respects (or in all respects if any such representation or warranty is already qualified by materiality, Material Adverse Effect or similar language) as of such earlier date.

SECTION 5. <u>Reaffirmation</u>. Each Loan Party consents to the amendment of the Existing Loan Agreement effected hereby and confirms and agrees that, notwithstanding the effectiveness of this Fourth Amendment, each Loan Document to which such Loan Party is a party is, and the obligations of such Loan Party contained in the Amended Loan Agreement, this Fourth Amendment or in any other Loan Document to which it is a party are, and shall continue to be, in full force and effect and are hereby ratified and confirmed in all respects, in each case, as amended by this Fourth Amendment. For greater certainty and without limiting the foregoing, each Loan Party hereby confirms the existing security interests granted in favor of the Agent for the benefit of, among others, the Lenders pursuant to the Loan Documents in the Collateral described therein, which security interests shall continue in full force and effect after giving effect to this Fourth Amendment to secure the Obligations as and to the extent provided in the Loan Documents.

SECTION 6. <u>Amendment, Modification and Waiver</u>. This Fourth Amendment may not be amended, modified or waived except as permitted by the Amended Loan Agreement.

SECTION 7. <u>Entire Agreement</u>. This Fourth Amendment and the other Loan Documents constitute the entire agreement among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. On and after the Fourth Amendment Effective Date, each reference in the Loan Documents to "the Loan Agreement," "thereunder," "thereof" or words of like import referring to the Loan Agreement, shall mean a reference to the Amended Loan Agreement.

------

SECTION 8. <u>Miscellaneous</u>. <u>Section 11.11</u> (Submission to Jurisdiction; Waivers), <u>Section 11.12</u> (Severability), <u>Section 11.13</u> (Governing Law), <u>Section 11.14</u> (Waiver of Defense of Illegality) and <u>Section</u>

<u>11.15</u> (Execution in Counterparts; Electronic Signatures) of the Loan Agreement are incorporated herein by reference, *mutatis mutandis*.

SECTION 9. <u>Loan Document; No Novation</u>. On and after the Fourth Amendment Effective Date, this Fourth Amendment shall constitute a "Loan Document" for all purposes of the Amended Loan Agreement and the other Loan Documents (it being understood that for the avoidance of doubt this Fourth Amendment may be amended or waived solely by the parties hereto as set forth in Section 6 above). This Fourth Amendment shall not constitute a novation of the Existing Loan Agreement or any of the Loan Documents.

SECTION 10. <u>Lender Direction</u>. Each Lender party hereto, constituting the Required Lenders and the Specified Acquisition Delayed Term Loan Lenders affected by the amendments hereunder, by their execution hereof, hereby authorizes and directs the Agent to execute and deliver this Amendment on the date hereof.

[*Signature pages to follow*]

------

IN WITNESS WHEREOF, each of the undersigned has caused this amendment to be duly executed by their respective authorized officers as of the day and year first above written.

**GUARANTOR**: TERRASCEND CORP.

By: <u>/s/</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: [\*\*\*]

 **BORROWERS:**

&nbsp;&nbsp;&nbsp;&nbsp;[\*\*\*]

By: <u>/s/</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;[\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;By:<u>/s/</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By: <u>/s/</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: [\*\*\*]

------

IN WITNESS WHEREOF, each of the undersigned has caused this amendment to be duly executed by their respective authorized officers as of the day and year first above written.

## AGENT:
FG AGENCY LENDING LLC

By: <u>/s/</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: [\*\*\*]

------

# IN WITNESS WHEREOF, each of the undersigned has caused this amendment to be duly executed by their respective authorized officers as of the day and year first above written.

## LENDERS:
[\*\*\*]

By: [\*\*\*]

By: <u>/s/</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: [\*\*\*]

[\*\*\*]

By: <u>/s/</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: [\*\*\*]

------

# IN WITNESS WHEREOF, each of the undersigned has caused this amendment to be duly executed by their respective authorized officers as of the day and year first above written.

## LENDERS:
[\*\*\*]

By: <u>/s/</u> 

Name: [\*\*\*]

Title: [\*\*\*]

------

# IN WITNESS WHEREOF, each of the undersigned has caused this amendment to be duly executed by their respective authorized officers as of the day and year first above written.

## LENDERS:
[\*\*\*]

By: [\*\*\*]

By: [\*\*\*]

By: [\*\*\*]

By: <u>/s/</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: [\*\*\*]

------

# IN WITNESS WHEREOF, each of the undersigned has caused this amendment to be duly executed by their respective authorized officers as of the day and year first above written.

## LENDERS:
[\*\*\*]

By: [\*\*\*]

By: <u>/s/</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: [\*\*\*]

------

# IN WITNESS WHEREOF, each of the undersigned has caused this amendment to be duly executed by their respective authorized officers as of the day and year first above written.

## LENDERS:
[\*\*\*]

By: <u>/s/</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: [\*\*\*]

------

# IN WITNESS WHEREOF, each of the undersigned has caused this amendment to be duly executed by their respective authorized officers as of the day and year first above written.

## LENDERS:
[\*\*\*]

By: <u>/s/</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: [\*\*\*]

------

# IN WITNESS WHEREOF, each of the undersigned has caused this amendment to be duly executed by their respective authorized officers as of the day and year first above written.

## LENDERS:
[\*\*\*]

By: <u>/s/</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: [\*\*\*]

------

# IN WITNESS WHEREOF, each of the undersigned has caused this amendment to be duly executed by their respective authorized officers as of the day and year first above written.

## LENDERS:
[\*\*\*]

By: <u>/s/</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: [\*\*\*]

------

# IN WITNESS WHEREOF, each of the undersigned has caused this amendment to be duly executed by their respective authorized officers as of the day and year first above written.

## LENDERS:
[\*\*\*]

By: <u>/s/</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: [\*\*\*]

------

# IN WITNESS WHEREOF, each of the undersigned has caused this amendment to be duly executed by their respective authorized officers as of the day and year first above written.

## LENDERS:
[\*\*\*]

By: [\*\*\*]

By: <u>/s/</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: [\*\*\*]

------

# IN WITNESS WHEREOF, each of the undersigned has caused this amendment to be duly executed by their respective authorized officers as of the day and year first above written.

## LENDERS:
[\*\*\*]

By: <u>/s/</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: [\*\*\*]

------

# IN WITNESS WHEREOF, each of the undersigned has caused this amendment to be duly executed by their respective authorized officers as of the day and year first above written.

## LENDERS:
[\*\*\*]

By: <u>/s/</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: [\*\*\*]

------

# IN WITNESS WHEREOF, each of the undersigned has caused this amendment to be duly executed by their respective authorized officers as of the day and year first above written.

## LENDERS:
[\*\*\*]

By: <u>/s/</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: [\*\*\*]

------

<u>Annex A</u>

Schedule 1.1(a)

Term Loan Commitment Amount

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Initial Term Loan Commitments

---

| | |
|:---|:---|
| **Initial Term Loan Lender** | **Commitment Amount** |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| **Total** | **$114000000.00** |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Delayed Term Loan Commitments

---

| | |
|:---|:---|
| &nbsp;&nbsp;**Delayed Term Loan Lender** | &nbsp;&nbsp;**Commitment Amount** |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;**Total** | **$26000000.00** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)2025 Incremental Term Loans

---

| | |
|:---|:---|
| &nbsp;&nbsp;**2025 Incremental Term Loan Lender** | &nbsp;&nbsp;**Commitment Amount** |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;**Total** | **$79000000** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)[Reserved].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)2025 Additional Incremental Term Loan

---

| | |
|:---|:---|
| &nbsp;&nbsp;**2025 Additional Incremental Term Loan** | &nbsp;&nbsp;**Commitment Amount** |
| &nbsp;&nbsp;[\*\*\*] | [\*\*\*] |
| &nbsp;&nbsp;**Total** | **$3105263.16** |

---

------

<u>Annex B</u>

Schedule 8.2 Existing Debt

[\*\*\*]

------

<u>Annex C</u>

<u>EXHIBIT E</u>

------

## Exhibit 10.19

# TERRASCEND EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement ("**Agreement**") signed as of October 31, 2025 amends and restates that certain Executive Employment Agreement ("**Original Agreement**") made and effective as of January 5, 2022, by and between TerrAscend USA, Inc., a Delaware corporation ("**TerrAscend**" or the "**Company**") and Ziad Ghanem ("**Employee**"), residing [\*\*\*]. The Company and Employee are sometimes individually referred to as a "**Party**" and collectively as the "**Parties**."

# EXPLANATORY STATEMENT
WHEREAS, Employee has been employed by the Company since January 5, 2022 ("**Effective Date**") as its President and Chief Operating Officer and was promoted to President and Chief Executive Officer of the Company on March 29, 2025;

WHEREAS, the Parties desire to amend the Original Agreement to among other things, provide for certain enhanced provisions and otherwise on the terms set out herein; and

WHEREAS, the Company desires to be assured that Employee will maintain the Company's proprietary and confidential information and will not share or disclose any trade secrets, confidential and/or proprietary information of the Company in violation of this Agreement.

NOW, THEREFORE, the Parties wishing to memorialize the terms and conditions of their agreement and in consideration of the foregoing and of the mutual promises contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

# ARTICLE I

# EMPLOYMENT
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1**At-Will Employment.** Commencing on the Effective Date, the Company shall employ Employee on an at-will basis and Employee hereby accepts such at-will employment upon the terms and conditions set forth in this Agreement. As an at-will employee, Employee's employment will have no specified period and may be terminated by Employee or the Company at any time, and for any reason, with or without notice.

# ARTICLE II
**DUTIES, RESPONSIBILITIES, LOCATION AND HOURS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1**Duties and Scope of Employment.** Employee shall be employed by the Company in the exempt position of President and Chief Executive Officer ("**CEO**") and Employee shall perform such duties as are consistent with this position as may be assigned by Employee's manager or his or her designee. During Employee's employment with the Company, Employee shall diligently, to the best of Employee's ability, and with all highest degree of good faith and loyalty, perform all such duties incident to the position and use best efforts to promote the interests of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2**Reporting Relationship**. Employee will report to the Executive Chairman or to such other member of the Board as determined in the sole discretion of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3**Location of Employment**. The Company currently has work sites in Pennsylvania, New Jersey, Maryland, California, Ohio and Canada. It is anticipated that Employee will be working primarily from a home office located in Florida (or such other location agreed to by the Company) but will be expected to travel

------

temporarily to other TerrAscend facilities throughout the United States and potentially in Canada in order to perform duties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4**Obligations to the Company**. While employed by the Company, Employee shall devote Employee's normal and regular business time and attention to the business of the Company. Employee shall not engage in any other business activities that is reasonably likely (a) to materially interfere with the reasonable performance of Employee's duties and responsibilities under this Agreement, or (b) are competitive with the Business (as defined in <u>Section 4.3</u>) of the Company without the express written consent of the Company. Subject to any applicable restrictions concerning related party transactions and/or conflicts of interest, Employee is precluded from using Employee's position with the Company or the Company's relationship with its investors, partners, customers, vendors, suppliers and/or contractors (or that of its affiliates and/or related entities) for private gain or to obtain benefits for Employee or members of Employee's family, or anyone else. Employee shall comply with the Company's policies and rules, including the Company's employee handbook, as they may be in effect from time to time during Employee's employment with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5**No Conflicting Obligations**. Employee has completely and fully disclosed to the Company any obligations, restriction, covenants, commitments, or agreements to which Employee may be bound, or the rights of any other person or entity, whether contractual or otherwise, that may be inconsistent with Employee's obligations under this Agreement. Employee represents and warrants to the Company that (a) the Company has not made any representations, warranty or otherwise provided any advice, legal or otherwise, that Employee's employment with the Company as contemplated by this Agreement will neither infringe on or violate any such obligations, restriction, covenants, commitments, agreements or rights, and (b) Employee has consulted with an attorney of Employee's choice regarding the foregoing and has not relied on any inducements, promises, or representations regarding the foregoing from the Company, any of its affiliates or any of their respective representatives. Without limiting the foregoing, Employee shall not use or disclose any trade secrets or confidential information, or property belonging to any of Employee's former employers or any other person or entity, without proper authorization from them. Additionally, the Company agrees that the existence of, or its receipt of, any notice, litigation or cause of action against or involving the Employee by any former employer of Employee relating to any such obligations, restriction, covenants, commitments, or agreements to which Employee may be bound, or the rights of any other person or entity, whether contractual or otherwise, that may be inconsistent with Employee's obligations under this Agreement shall not be Cause for termination, as defined in Section 5.1(a), and shall not give rise to termination of Employee for Cause unless otherwise ordered by a court of competent jurisdiction.

# ARTICLE III

# COMPENSATION AND BENEFITS
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1**Compensation**. In consideration of Employee's employment with the Company, execution of this Agreement, and compliance with all terms and conditions set forth herein, the Company agrees to provide Employee the compensation and benefits set forth in this <u>Article III</u> of the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)**Salary**. Employee shall earn an annual base salary of US $546,000 ("**Salary**"), less all applicable taxes and withholdings as required by law, and such other payroll deductions as are determined by Company policy or as Employee may approve from time-to-time, which shall be paid consistent with the Company's ordinary and regular payroll practices and in accordance with applicable law. This position is classified as exempt under federal and state wage and hour laws, meaning that Employee will not be eligible for overtime pay. The Company reserves the right to modify Employee's Salary in its sole discretion any time and in accordance with applicable law.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)**Annual Bonus**. Beginning for the 2025 financial year, Employee will be eligible to participate in the Company's annual performance bonus program ("Bonus Program"), as may be in effect from time to time, and shall be eligible for a bonus in the amount of 100% of Employee's Salary on an annual basis under the Bonus Program. The objectives, terms, and conditions of the Bonus Program shall be determined in the sole discretion of the Company. The amount and frequency of any bonus payments shall be reviewed at least annually and determined in the sole discretion of the Company. The Company reserves the right, in its sole discretion, to suspend, revoke, or rescind the Bonus Program in part or in whole at any time. Except as otherwise provided in the Bonus Program or this Agreement, in order to receive payment of any bonus (or any portion thereof), Employee must be an employee of the Company on the date such bonus is paid, and Employee must not have given notice of the termination of Employee's employment without Good Reason (as defined in Section 5.1(d) of this Agreement) or received notice of the termination for Cause of Employee's employment by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)**Long Term Incentive (LTI).** Beginning for the 2025 financial year, Employee shall be eligible to receive LTI in the form of Restricted Stock Units ("**RSUs**") pursuant to the Company's Share Unit Plan and as determined by the Company's Board of Directors ("**Board of Directors**") from time to time. In light of Employee's role within the Company, Employee will be eligible for an LTI award with a value of up to 150% of Employee's Salary in RSUs. Unless otherwise approved by the Board of Directors with respect to any individual grant, RSUs granted as LTI vest in equal increments (i.e., 25%) on the 12-month, 24-month, 36-month and 48-month anniversary dates of the grant date and will be granted in the first available open trading window in the year in which they are granted; <u>provided</u>, that, in the event Employee's employment is terminated without Cause or due to Employee's Disability (as defined in Section 5.1(e) of this Agreement) or death or Employee voluntarily terminates employment for Good Reason, any unvested RSUs shall vest pro rata through the date of such termination based on the number of months between the date of grant and the termination date relative to 48 months and <u>provided further</u> that, in the event of a Change of Control (as defined in Section 5.1(g) of this Agreement), the RSUs will become fully vested.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)**Stock Option Plan**. During Employee's employment, Employee may be granted options for shares of common stock of the Company (the "**Option**"), in accordance with the TerrAscend Stock Option Plan ("**Stock Option Plan**"), which shall be determined in the sole discretion of the Board of Directors. Pursuant to the terms of the Company's then existing Stock Option Plan and upon approval by the Board of Directors and unless otherwise approved by the Board of Directors with respect to any individual grant, the Option will have the following terms and conditions, which shall be evidenced in an option grant agreement: (i) the exercise price (per share) for each share of common stock of the Company associated with the Option will be equal to the fair market value of the share on the date of grant; (ii) unless otherwise described in Employee's option grant agreement, the Option will vest in equal increments (i.e., 25%) on the 12-month, 24-month, 36-month and 48-month anniversary dates of the grant date; <u>provided</u> that Employee is employed by the Company on each of the corresponding dates; <u>provided</u> <u>further</u>, that, in the event of Employee's employment is terminated without Cause or due to Employee's Disability (as defined in Section 5.1(e) of this Agreement) or death or Employee voluntarily terminates employment for Good Reason, the unvested portion of the Option shall vest pro rata through the date of such termination based on the number of months between the date of grant and the termination date relative to 48 months; and <u>provided further</u> that, in the event of a Change of Control (as defined in Section 5.1(g) of this Agreement), the Option will become fully vested and exercisable; (iii) unless otherwise described in Employee's option grant agreement, the Option will be handled as defined in the Stock Option Plan and (iv) the Option will expire ten (10) years from the date of grant. By signing this Agreement, Employee agrees to only purchase or sell Company stock in compliance with the Company's then existing policies, procedures, and black-out periods, and other terms and conditions as established by the Stock Option Plan and Employee's option grant agreement. If there is any discrepancy between the description of the Stock Option Plan in this Section and the Stock Option Plan document, the Stock Option Plan document will control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2**Benefits**. During Employee's employment with the Company, Employee shall be entitled to

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participate in all employee benefit plans, practices, and programs maintained by the Company, as in effect from time to time (collectively, "**Employee Benefit Plans**"), on a basis which is no less favorable than is provided to other similarly situated employees of the Company, to the extent consistent with applicable law and the terms of the applicable Employee Benefit Plans. The Company reserves the right to amend or terminate any Employee Benefit Plans, at any time in its sole discretion, subject to the terms of such Employee Benefit Plan and applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3**Paid Time Off**. Employee will receive paid time off ("**PTO**") in accordance with policies offered by the Company (including vacation, sick, personal time off and company holidays), on a basis which is no less favorable than is provided to other similarly situated employees of the Company, which shall be taken in accordance with Company policies as in effect from time to time, which may be modified in the sole discretion of the Company, and applicable law. The Company will additionally provide Employee with any paid or unpaid leave and any other benefits to which Employee is entitled and eligible to receive under applicable federal, state, and or local law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4**General Business Expenses**. Employee shall be reimbursed for reasonable, necessary, and authorized travel and other business expenses in connection with Employee's duties for the Company, pursuant to and consistent with the Company's policies and procedures, as may be modified from time to-time in the sole discretion of the Company. The Company shall reimburse Employee for such expenses upon presentation of an itemized account and appropriate supporting documentation in accordance with the Company's policy and procedure.

# ARTICLE IV
**CONFIDENTIALITY; RESTRICTIVE COVENANTS; AND ASSIGNMENT OF INVENTIONS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 **Confidentiality**. The Employee understands and acknowledges that during Employee's employment with the Company, Employee will be exposed to Confidential Information (defined below) concerning the business or affairs of the Company that is proprietary and which rightfully belongs to the Company. Employee further understands and acknowledges that this Confidential Information and the Company's ability to reserve it for the exclusive knowledge and use of the Company is of great competitive importance and commercial value to the Company, and that improper use or disclosure of the Confidential Information by Employee might cause the Company to incur financial costs, loss of business advantage, liability under confidentiality agreements with third parties, civil damages and criminal penalties. Employee will not use for Employee's own benefit, either directly or indirectly, or disclose any such Confidential information, at any time, either during or after Employee's employment with the Company, to any other person, other than the Company or its employees, without the prior written consent or authorization of the Company. Employee shall take all reasonable steps to safeguard such Confidential Information and to protect such information against disclosure, misuse, loss and theft. Employee's obligations under this <u>Section 4.1</u> with respect to any specific Confidential Information shall cease when that specific portion of the Confidential Information becomes generally known to the public or the relevant trade or industry other than as a result of the Employee's actions or omissions. In the event Employee is required by law to make any disclosure of Confidential Information, Employee shall promptly notify the Company, in writing, of the basis for the extent of the required disclosure and shall cooperate with the Company to preserve in full confidentiality of all Confidential Information and other proprietary rights.

The term "**Confidential information**" means any confidential or proprietary information of the Company, its affiliates, and/or its related entities, that is not generally known to the public or in the relevant trade or industry, which was obtained from the Company, its affiliates, and/or its related entities, or which was learned, discovered, developed, conceived, originated or prepared during or in the course of the performance of any services by Employee on behalf of the Company, its affiliates, and/or or any of its related entities, whether in physical or electronic form or any other medium, and which falls within the following categories:

(i) trade secrets of the Company, any affiliate, and/or any related entity; (ii) trade secrets of any investor, partner,

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or customer of the Company, any affiliate, and/or related entity, which was obtained pursuant to a confidentiality agreement; (iii) information that relates to existing or contemplated products, services, distribution, agreements, proposals, manuals, technology, designs, processes, formulae, algorithms and research or product developments of the Company, any affiliate, and/or any related entity or of any customer, investor, or partner of the Company, any affiliate, and/or related entity; (iv) information relating to business plans, pricing, sales and marketing methods and data, methods of doing business, financial or personnel information, customer lists, customer usages and/or requirements, supplier information of the Company, any affiliate, and/or related entity or of any customer, investor, or partner of the Company, any affiliate, and/or related entity; (v) information relating to proposals, contracts, content strategies, content performance analytics, of the Company, any affiliate, or any related entity, or of any customer, investor, or partner of the Company, any affiliate, and/or related entity; and (vi) any other confidential information which the Company, any affiliate, and/or related entity, or of any customer, investor, or partner of the Company, any affiliate, and/or related entity have protected by patent, patent applications, copyright or by keeping it secret and confidential.

Nothing in this Agreement shall be construed to prevent disclosure of Confidential Information as may be required or permitted by applicable law or regulation, or pursuant to the valid order of a court of competent jurisdiction or an authorized government agency, provided that the disclosure does not exceed the extent of disclosure required by such law, regulation, or order. Nothing in this section is intended to waive, restrict,or limit Employee's rights, communications, or actions that cannot be waived by agreement, including, but not limited to any nonwaivable rights that Employee may have under the National Labor Relations Act or concerning communications with fair employment practices agencies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2**DTSA Notice**. Pursuant to the Federal Defend Trade Secrets Act of 2016 ("**DTSA**"), an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law. An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3**Restrictive Covenants**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)**Non-Competition**. Unless prohibited by law, during Employee's employment with the Company and for a period of twelve (12) months after the cessation of Employee's employment with the Company, for whatever reason, Employee shall not, directly or indirectly, participate in any Restricted Activity (defined below) within the Restricted Territory (defined below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)For purposes of this Agreement, **"Restricted Territory"** means the Territories in which TerrAscend operates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)For purposes of this Agreement, "Business of the Company" means the business of the cultivation, extraction, processing or formulation of cannabinoid-containing products, and/or the development or commercialization of any technologies for use in the same or services, businesses, or products currently in competition with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) For purposes of this Agreement, **"Restricted Activity"** means, either directly or indirectly, owning, managing, engaging in, operating, controlling, working for, consulting with,

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rendering services to, doing business with, maintaining any interest in or participating in the ownership, management, operations or control of, any business, in whatever form, which competes with the Business of the Company (a **"Competing Business"**), where (A) Employee is acting in the same or similar capacity that he acted with the Company for a Competing Business; (B) Employee is performing the same or similar duties and responsibilities as Employee performed with the Company for a Competing Business; (C) Employee is sharing Confidential Information with a Competing Business or utilizing Confidential Information for the benefit of a Competing Business; or (D) Employee is soliciting the Company's customers or other protected business relationships for purposes of seeking to induce such customers to alter or end their relationship with the Company. For the avoidance of doubt, it is understood by the Parties that a Competing Business is a person, business entity or organization that is in the business of or is engaged, in whole or in part, either alone or together with its affiliates or related entities, in the business of the cultivation, extraction, processing or formulation of cannabinoid-containing products, and/or the development or commercialization of any technologies for use in the same. Notwithstanding the foregoing, Employee may make passive investments in publicly traded entities not to exceed one percent (1%) of the outstanding voting securities of such public entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) As used herein, **"competes with"** means selling, soliciting, marketing or otherwise making available any product, program, process, system or service for any person or entity other than for the Company, which is the same as or similar to or is in competition with, or has a use allied to, or may be substituted for or supplied by, any product, program, process, system or service of the Company, whether in existence or under development during Employee's employment with the Company, or about which Employee acquired Confidential Information (as defined above in <u>Section 4.1</u>) during Employee's employment with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.**Non-Solicitation of Customers and Employees**. During Employee's employment with the Company and for a period of twelve (12) months after the cessation of Employee's employment with the Company, for whatever reason, Employee agrees not to, directly or indirectly, call upon, accept business from, or deal with any of the customers of Company with whom Employee had contact or about whom Employee obtained Confidential Information during Employee's employment with the Company for the purpose of inducing said customer to alter or end its relationship with the Company or to do business with a person or entity that is a Competing Business or preparing to compete against the Company. In addition, for the same period of time, Employee agrees not to, directly or indirectly, solicit, recruit, or attempt to solicit any employee, agent, consultant or independent contractor, member, officer or agent of the Company to alter or terminate his/her/its employment or other relationship with the Company or breach any agreement with or obligation owed to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.**Extension of Restraints**. If Employee violates any restraints specified in this Agreement, whether or not there is litigation relating to such violation, Employee agrees that the period of the restraint shall automatically be extended for the period of the violation. Employee understands that the purpose of this <u>Section 4.3(c)</u> is to give the Company the protection of the restraint for the full agreed upon duration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.**Adjustment of Restraints**. In the event that any one (1) or more of the provisions of this Agreement shall be held to be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remainder hereof shall not, in any way, be affected or impaired thereby, and any such provision or provisions shall be enforced to the fullest extent permitted by law. Moreover, if any one (1) or more of the provisions contained in this Agreement is held to be excessively broad as to duration, scope, activity or subject (including, but not limited to, the restrictive covenants contained in this Agreement), such provisions will be construed by excising, limiting, and/or reducing them so that this Agreement is enforceable to the maximum extent compatible with applicable law.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.**Employee Acknowledgments, Representations, and Warranties**. For purposes of Article IV, Employee warrants, acknowledges, and agrees that (i) the Company has expended substantial resources in the development of near permanent relationships with its customers and that Employee would not have contact with those customers but for Employee's employment at the Company, (ii) the Company has a protectable interest in its customers and other Confidential Information, (iii) the post-employment restrictions contained in this Agreement are necessary to protect the Company, they are reasonable and narrowly tailored, and they do not restrict Employee's ability to obtain employment or earn a living following Employee's employment with the Company, (iv) Employee willing, voluntarily, and knowingly is entering into this Agreement subject to the reasonable, post-employment restrictions contained in this Agreement, (v) entering into this Agreement does not constitute a breach of any contract or legal obligation with or to any third party, and (vi) Employee has disclosed to the Company any existing restrictions or other legal restrictions that may impact Employee's ability to provide services to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.**Remedies**. Employee agrees that if Employee violates any provision of this Agreement, the Company will suffer immediate and irreparable injury for which it has no adequate remedy at law. If Employee violates any of such provisions, Employee agrees that in addition to any other remedies that may apply, Employee's strict compliance with this Agreement should be ordered by a court of competent jurisdiction, and the Company is therefore entitled to emergency, preliminary, and final injunctive relief to enforce this Agreement. The Company's remedies for breach of this Agreement are cumulative and pursuit of one (1) remedy shall not exclude any other remedy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g.**No Reliance**. Employee acknowledges that Employee has read this Agreement carefully and understands its meaning and consequences, and that Employee has not relied on any oral or written statement or representation made by anyone relating to the terms of Employee's employment, other than as set forth in this Agreement. Employee further declares that Employee has had the opportunity to have the contents of this Agreement fully explained to Employee by the legal counsel of Employee's own selection and has acted voluntarily and of Employee's own free will in executing this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h.**Employee Acknowledges Sufficient Consideration**. Employee acknowledges and agrees that employment with the Company constitutes sufficient consideration for Employee's promises, duties, obligations and responsibilities hereunder and, further, that the compensation, Option, benefits, severance and other consideration described in this Agreement constitutes consideration to which Employee is not otherwise entitled to receive if Employee did not enter into the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.**Notice to Subsequent Employers**. Before Employee is hired or engaged by any other person or entity that performs services that are the same as or are similar to the Company's services ("**Similar Services**"), Employee shall provide a complete copy of this Agreement to the person or entity to or for which or whom Employee intends to provide services. Employee hereby authorizes the Company to provide a copy of this Agreement to any person or entity providing Similar Services that the Company believes may hire or engage Employee.

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**Product**") shall belong exclusively to the Company and shall, to the extent possible, be considered a "work made for hire." Employee automatically assigns to the Company, at the time of creation of the Work Product, without any requirement of further consideration, any right, title, or interest Employee may have in such Work Product, including any copyrights or other intellectual property rights pertaining thereto. Upon request of the Company, and at its sole expense, Employee shall take such further actions, including execution and delivery of instruments of conveyance, as may be appropriate to give full and proper effect to such assignment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5**Personal Electronic Equipment**. Employee acknowledges that, in the performance of services for the Company, Employee may use electronic equipment such as a laptop computer, cell phone, or other electronic device that is owned by Employee (collectively, "Personal Electronic Equipment"). Employee acknowledges that all Company information that may become contained on the Personal Electronic Equipment is the sole and exclusive property of the Company. Employee agrees that the Company has the right to access such Company information, at any time, to inspect and/or recover any Company information stored thereon. Employee acknowledges and agrees that Company is not liable for any damage caused to the Personal Electronic Equipment while in its possession or for damaging or deleting any personal Employee information contained thereon.

Employee shall abide by all Company policies and procedures concerning device usage, maintenance, and protection, including, but not limited to preservation of Confidential Information on such devices. Employee agrees to use Company-owned equipment, records, and materials for purposes of Company business only, and to protect them against unauthorized or accidental access, use, modification, destruction, loss, theft or disclosure. Employee agrees to continue to protect the privacy of sensitive, proprietary, and/or Confidential Information. Employee will not leave such sensitive documents in common areas and will take reasonable steps to ensure confidentiality when discussing sensitive information on phone calls or in virtual meetings. Employee agrees and understands that Company equipment and devices are being provided to Employee for business purposes only. Any incidental personal use of Company-owned equipment should not interfere with the use of the equipment for Company business. Employee agrees to immediately report to their supervisor any instances of loss, damage, or unauthorized access.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6**Return of Company Property**. Immediately on the effective date of Employee's termination of employment with the Company, for any reason, or at any time upon request of the Company, Employee shall return all property in Employee's possession belonging to the Company, whether tangible or intangible, including, but not limited to, all physical and electronically stored data, emails, keys, credit cards, equipment, computers, Confidential Information, tablets, cell phones, vehicles, books, records, customer information, programs and data compilation, contracts, communications and other materials belonging to the Company, including any Company information stored on Employee's Personal Electronic Equipment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7**Non-Disparagement**. During Employee's employment with the Company and at all times thereafter, Employee shall not divulge, disclose, or communicate to others, in any manner whatsoever, information or statements that disparage or are intended to disparage the Company, including its officers, directors, shareholders, employees, and agents, and its/his/her/their business reputation. Notwithstanding the foregoing, nothing in this Agreement is intended to waive, restrict, or limit Employee's rights, communications, or actions that cannot be waived by agreement, including, but not limited to, Employee's rights under the National Labor Relations Act, the right to disclose information about unlawful acts in the workplace, including, but not limited to, sexual harassment, the right to testify in an administrative, legislative, or judicial proceeding about alleged sexual harassment, or alleged criminal conduct by another party, including the Company, its agents, or employees, if and when Employee has been required or requested to attend the proceeding pursuant to a court order, subpoena, or written request from an administrative agency or the legislature, and the right to make disclosures to or comply with proceedings before the Equal Employment Opportunity Commission, or any other federal, state, or local fair employment practices agency, or pursuant to a valid order of a court of competent jurisdiction; <u>provided</u> that, such compliance does not exceed that required by the law, regulation, or order. Nothing

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in this Agreement prohibits or restricts Employee from initiating communications directly with, responding to an inquiry from, or providing testimony before the Securities and Exchange Commission (SEC), or any other self-regulatory organization, or any other federal or state regulatory authority.

**ARTICLE V**

**TERMINATION, CHANGE OF CONTROL AND SEVERANCE**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1**Termination of Employment**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)**Termination for Cause**. The Company shall have the right to terminate Employee's employment, at any time, for Cause (as defined below) by giving Employee written notice of the effective date of such termination. In the event of such termination for Cause, Employee shall be entitled to receive Employee's Salary accrued and unpaid through the date of termination, together with all accrued and unpaid PTO, and expenses reimbursable pursuant to this Agreement (herein, "**Earned Pay**"). The Earned Pay shall be paid in accordance with the Company's applicable policies and applicable law. Any vested benefits to which Employee is entitled under the Employee Benefit Plans and vested RSUs and options shall be paid in accordance with the terms of the governing plan documents and agreements. For purposes of this Agreement only, the term "**Cause**" means any of the following: (i) Employee materially breaches any fiduciary duty owed to the Company or its affiliates, including the duty of loyalty which has not been cured within ten (10) calendar days of written notice to the Employee; (ii) Employee fails to comply with any valid and legal directive of the Company that is material and is consistent with Employee's obligations under this Agreement, which has not been complied with within ten (10) calendar days of written notice to Employee of such noncompliance; (iii) Employee is convicted of or pleads guilty or nolo contendere to a crime that constitutes a felony (or state law equivalent) or a crime that constitutes a misdemeanor involving moral turpitude or that results in material, reputational, or financial harm to the Company, its agents, representatives, or its affiliates;

(iv) Employee engages in any act or omission that constitutes a material breach by Employee of any of Employee's duties, responsibilities, and obligations under this Agreement, or any material written policy (as they may be in effect from time to time during Employee's employment) of the Company or any of its affiliates, assuming such obligations are lawful, which has not been cured within ten (10) calendar days of written notice to the Employee; (v) Employee commits an act which negatively impacts, in a material way, the Company or its employees including, but not limited to, engaging in competition with the Company, disclosing confidential information or engaging in sexual harassment or discrimination in violation of Company policies; or (vi) Employee engages in the unauthorized disclosure of Confidential Information of the Company. For purposes of this definition of "**Cause**," an act or failure to act shall not be deemed willful or intentional unless Employee acted (or failed to act) in bad faith or without a reasonable belief that Employee's action or omission was in the best interest of the Company. For avoidance of doubt, Employee's failure to meet performance goals or objectives, by itself, shall not constitute Cause. In all instances, the Executive Chairman, in consultation with the Company's legal counsel and the Board of Directors as appropriate, shall determine, in good faith, whether Cause exists for purposes of this Agreement and whether Employee's employment shall be terminated for Cause. The Executive Chairman shall have the authority to waive the consequences under this Agreement of the existence or occurrence of any events, acts, or omissions that constitute Cause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)**Termination without Cause**. Notwithstanding anything to the contrary in this Agreement, the Company may, at any time, terminate Employee's employment without Cause (as defined above) by giving Employee at least thirty (30) days prior written notice of the effective date of Employee's termination. In the event of such termination of employment without Cause, Employee shall be entitled to receive (i) Earned Pay, (ii) severance benefits, which shall consist of an after-tax, lump sum payment equal to the Company's share of

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Employee's medical coverage under the Company's group health plan, measured as if Employee properly and timely elected continuation coverage as prescribed by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("**COBRA**"), for the Severance Period (defined in <u>Section</u> <u>5.2</u> below) (the "**COBRA Cash Stipend**"), (iii) severance pay, which shall be equal to Employee's Salary for the Severance Period (as defined in <u>Section 5.2</u>), payable in regular installments in accordance with the Company's standard payroll practices ("**Severance Pay**"), and (iv) the Employee's full bonus (cash or equivalent) for the prior calendar year if it has not yet been paid and the Employee's full bonus (cash or equivalent) for the current calendar year. The Company shall commence payment of Severance Pay and shall pay the COBRA Cash Stipend and bonuses within sixty (60) days of Employee's termination of employment; p<u>rovided</u>, that Employee has executed, delivered, and not revoked the Waiver and General Release described in <u>Section 5.3</u> of this Agreement. In the event the sixty (60) day time period spans two (2) calendar years, payment will begin or be made, as applicable, in the second calendar year. The first payment of the Severance Pay shall include any installments to which Employee would have been entitled had payments commenced upon the date of Employee's termination of employment. The Earned Pay shall be paid in accordance with the Company's applicable policies and applicable law. Any vested benefits to which Employee is entitled under the Employee Benefit Plans and vested RSUs and options shall be paid in accordance with the terms of the governing plan documents and agreements. Employee must satisfy, at all times, the conditions described in <u>Section 5.3</u>, <u>Section 5.4</u>, Article IV and Article VI to receive the COBRA Cash Stipend and continue to receive Severance Pay under this <u>Section 5.1(b)</u> following Employee's termination of employment. If, during the Severance Period, Employee engages in any Restricted Activity with any Competing Business, Employee shall notify the Company in writing no later than five (5) business days from the date Employee has commenced such Restricted Activity ("**Commencement Date**"). Further, upon determination by a court of competent jurisdiction that Employee has violated the restrictive covenants set forth in Article IV, Employee shall repay all Severance Pay paid to Employee following the cessation of Employee's employment with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)**Termination on Account of Resignation**. Employee may, at any time, terminate Employee's employment by voluntary resignation by giving the Company at least thirty (30) days prior written notice of the effective date of such termination. In the event of Employee's termination of employment due to voluntary resignation not covered by Section 5.1(d), neither the COBRA Cash Stipend nor the Severance Pay shall be provided under this Agreement and all rights, duties, and obligations of the Parties under this Agreement, other than those obligations expressed in Article IV and Article VI, and Employee's right to receive Earned Pay, vested benefits under any Employee Benefit Plans and vested RSUs and options, shall cease as of the employment termination date. The Earned Pay shall be paid in accordance with the Company's applicable policies and applicable law. Any vested benefits to which Employee is entitled under the Employee Benefit Plans and vested RSUs and options shall be paid in accordance with the terms of the governing plan documents and agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)**Termination on Account of Resignation with Good Reason**. Employee shall have the right to terminate Employee's employment by voluntary resignation with Good Reason. The term "**Good Reason**" means any one (1) or more of the following events that occurs without the prior written consent of Employee: (i) a material diminution in Employee's Salary; (ii) a demotion, or change in reporting relationship of Employee to someone other than the Company's Executive Chairman, or a member of the Board of Directors, and in the event of a Change of Control to an individual in the respective positions employed by an entity other than the acquiror, or one that results in a material diminution of Employee's authority, duties, or responsibilities; or (iii) Employee is notified by the Company that he is required to relocate to a place more than 25 miles from his current place of employment in Connecticut, or (iv) any other action or inaction that constitutes a material breach by the Company of the terms of this Agreement. To qualify as a voluntary resignation with "**Good Reason**," Employee shall provide the Company with notice of the existence of the event described above within ninety (90) days of the initial existence of such event, and the Company shall have thirty (30) days to remedy the event measured from the date it received Employee's notice. If the event that qualifies as Good Reason is not cured and the Employee

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resigns within six (6) months of the initial existence of such Good Reason event, then Employee's voluntary resignation shall be treated in all respects as an involuntary termination of employment without Cause by the Company of Employee's employment under <u>Section 5.1(b)</u>, and the COBRA Cash Stipend and Severance Pay provided in connection with an involuntary termination without Cause (together with the conditions described in <u>Section 5.3</u>, <u>Section 5.4</u>, Article IV and Article VI) shall apply.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)**Termination on Account of Disability**. If Employee is determined to have a "**Disability**" (defined herein) and ceases active employment with the Company, Employee shall be entitled to receive Employee's Salary and to continue to participate in the Employee Benefit Plans described in <u>Section 3.2</u>, as in effect with respect to Employee immediately prior to such cessation of active employment, for six (6) months (or, if less, until Employee is able to return to active employment with the Company). If Employee is unable to return to active employment with the Company at the completion of that six (6) month period, the Company may elect to terminate Employee's employment by sending written notice of such election to Employee. In such event, the Company shall provide Employee Earned Pay, his pro rata bonus and the COBRA Cash Stipend for the same period as described in <u>Section 5.1(b)</u> (as if employment had been terminated involuntarily by the Company without Cause at the completion of such initial six (6) month period), but not the Severance Pay. The Earned Pay shall be paid in accordance with the Company's applicable policies and applicable law. The COBRA Cash Stipend shall be paid within sixty (60) days of Employee's termination of employment; p<u>rovided</u>, that Employee has executed, delivered, and not revoked the Waiver and General Release described in <u>Section 5.3</u> of this Agreement. In the event the sixty (60) day time period spans two (2) calendar years, the COBRA Cash Stipend payment will be made in the second calendar year. Any vested benefits to which Employee is entitled under the Employee Benefit Plans and vested RSUs and options shall be paid in accordance with the terms of the governing plan documents and agreements. The term "**Disability**" shall mean Employee is unable to perform the essential functions of his position by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months. Any determination of whether Employee has a Disability shall be based upon sufficient medical evidence from a physician selected by Employee (or Employee's personal representative or guardian) for that purpose. If any question arises as to whether during any period Employee has a Disability, Employee shall, at the request of the Company, submit to the Company a certification, in reasonable detail by a physician selected by the Company to whom Employee (or Employee's personal representative or guardian) has no reasonable objection, as to whether Employee has a Disability or how long the Disability will continue. Employee shall cooperate with any reasonable request of the physician in connection with such certification. If a question arises and Employee fails to submit such certification, the Company's determination of such issue shall be binding on Employee. Nothing in this Section 5.1(e) shall be construed to waive Employee's rights, if any, under existing law including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C.

§2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)**Termination on Account of Death**. In the event of Employee's death while in the employ of the Company, the personal representative of Employee's estate shall be entitled to receive Employee's Earned Pay, pro-rated bonus, vested RSUs and any vested but unexercised options. The Earned Pay and pro-rated bonus shall be paid in accordance with the Company's applicable policies and applicable law. Any vested benefits to which Employee is entitled under the Employee Benefit Plans and vested RSUs and options shall be paid in accordance with the terms of the governing plan documents and agreements. All other rights of Employee hereunder shall terminate as of such date of death.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)**Change of Control; Termination on Account of Change of Control.** As set out above, in the event of a Change of Control, 100% of the Option and RSUs will become vested and exercisable. This provision supersedes any conflicting provisions relating to vesting upon a Change of Control stipulated in the Stock Option

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Plan and Share Unit Plan, respectively. In the event Employee's employment is terminated without Cause or by Employee for Good Reason within 24 months following a Change of Control, Employee shall be entitled to receive (i) Earned Pay, (ii) two times (2x) the amount of Severance Pay, (iii) two times (2x) the amount of the COBRA Cash Stipend and (iv) the Employee's full bonus for the prior calendar year if it has not yet been paid and the Employee's full bonus for the current calendar year. ((ii) – (iv) collectively, the "**Change of Control Severance Pay**"). The Change of Control Severance Pay shall be paid in a lump sum payment within sixty (60) days of Employee's termination of employment; p<u>rovided</u>, that Employee has executed, delivered, and not revoked the Waiver and General Release described in <u>Section 5.3</u> of this Agreement. In the event the sixty (60) day time period spans two (2) calendar years, the lump sum payment will be made in the second calendar year. The Earned Pay shall be paid in accordance with the Company's applicable policies and applicable law. Any vested benefits to which Employee is entitled under the Employee Benefit Plans and vested RSUs and options shall be paid in accordance with the terms of the governing plan documents and agreements. Employee must satisfy, at all times, the conditions described in <u>Section 5.3</u>, <u>Section 5.4</u>, Article IV and Article VI to receive the Change of Control Severance Pay following Employee's termination of employment. Further, upon determination by a court of competent jurisdiction that Employee has violated the restrictive covenants set forth in Article IV, Employee shall repay all Severance Pay paid to Employee following the cessation of Employee's employment with the Company.

For purposes of this Agreement only, the term "**Change of Control"** shall be defined as (i) the acquisition of a sufficient number of voting securities in the capital of the Company so that the acquiror, together with Persons acting jointly or in concert with the acquiror, becomes entitled, directly or indirectly, to exercise more than 50% of the voting rights attaching to the outstanding voting securities in the capital of the Company (provided that, prior to the acquisition, the acquiror was not entitled to exercise more than 50% of the voting rights attaching to the outstanding voting securities in the capital of the Company); (ii) the completion of a consolidation, merger, arrangement or amalgamation of the Company with or into any other entity whereby the voting securityholders of the Company immediately prior to the consolidation, merger, arrangement or amalgamation receive less than 50% of the voting rights attaching to the outstanding voting securities of the consolidated, merged, arranged or amalgamated entity; or (iii) the completion of a sale whereby all or substantially all of the Company's undertakings and assets become the property of any other entity and the voting securityholders of the Company immediately prior to the sale hold less than 50% of the voting rights attaching to the outstanding voting securities of that other entity immediately following that sale.

For purposes of this Agreement only, the term "**Person**" will be broadly interpreted and includes (i) a natural person, whether acting in his or her own capacity, or in his or her capacity as executor, administrator, estate trustee, trustee or personal or legal representative, and the heirs, executors, administrators, estate trustees, trustees or other personal or legal representatives of a natural person; (ii) a corporation or a company of any kind, a partnership of any kind, a sole proprietorship, a trust, a joint venture, an association, an unincorporated association, an unincorporated syndicate, an unincorporated organization or any other association, organization or entity of any kind; and (iii) a governmental authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2**Severance Period**. The term "**Severance Period**" means 12 months.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3**Waiver and Release**. A condition precedent to (a) the payment of the COBRA Cash Stipend and

(b) the commencement and continued receipt of Severance Pay, which shall be payable pursuant to Section <u>5.1(b), Section 5.1(d), Section 5.1(e)</u> or <u>Section 5.1(g)</u>, as applicable, shall be the execution by Employee of a waiver and general release of all claims, which is not revoked during the revocation period. Such waiver and general release of all claims shall be in a form and substance as reasonably required by Company. The failure of Employee to execute the Waiver and General Release (or any revocation during the revocation period) shall relieve the

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Company of all obligations to pay the COBRA Cash Stipend and/or Severance Pay under <u>Section 5.1(b), Section 5.1(d), Section 5.1(e)</u> or <u>Section 5.1(g)</u> but shall not relieve Employee of Employee's obligations under Article IV and Article VI herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4**Other Conditions on Severance Benefits and Pay**.

Notwithstanding any other provision of this Agreement to the contrary, Employee shall not continue to be eligible for health and welfare benefit plan coverage (other than the right to elect continuation coverage under COBRA or similar state continuation coverage laws) after Employee's termination of employment. In the event Employee properly and timely elects continuation coverage under COBRA, Employee shall be required to pay such portion of the cost of such continuation coverage, as is paid by other similarly situated active executives.

# ARTICLE VI COOPERATION
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1**Cooperation**. The Parties agree that certain matters in which Employee will be involved during Employee's employment with Company may necessitate Employee's cooperation in the future. Accordingly, following Employee's termination of employment for any reason, to the extent reasonably requested by the Company and provided that advanced notice is given and is coordinated to the extent possible with Employee, Employee shall cooperate with the Company in connection with internal investigations, third party investigations, investigations by governmental agencies, claims made by third parties, litigation, arbitration, meditation and all other matters related to the Company, in which Employee has personal knowledge; <u>provided</u> that, Company shall make reasonable efforts to minimize disruption of Employee's personal and professional activities. Company shall reimburse Employee for reasonable expenses incurred in connection with such cooperation (e.g., airfare, lodging, rental car, mileage, meals, etc.).

# ARTICLE VII GENERAL PROVISIONS
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1**Severability and Modification by Court**. If any term or provision of this Agreement shall, for any reason, be adjudged by any court of competent jurisdiction to be invalid or unenforceable, such judgment shall not affect, impair, or invalidate the remainder of this Agreement, but shall be confined in its operation to the provisions of this Agreement directly involved in the controversy in which such judgment shall have been rendered. Notwithstanding the above, in the event any provision as presently set forth is determined to be invalid by a court of competent jurisdiction, the Parties agree that this Agreement shall be appropriately modified by the court so that each and every provision of this Agreement is enforceable to the maximum extent permitted by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2**Waiver**. No waiver by the Company of any breach of this Agreement shall be a waiver of any preceding or succeeding breach. No waiver by the Company of any right under this Agreement shall be construed as a waiver of any other right. The Company shall not be required to give notice to enforce strict adherence to all terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3**Survival and Assignability**. The provisions of this Agreement that would naturally survive the termination of Employee's employment with the Company shall survive such termination and shall continue in full force and effect. This Agreement is personal to Employee and may not be assigned by Employee. The Company may assign this Agreement to, and it shall be enforceable by, any successor or assign (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4**Notices**. Any notices required under this Agreement shall be sent by personal delivery, registered or certified mail, electronic mail or overnight carrier to: (i) the Company, at TerrAscend, 500 Paterson Plank Rd,

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STE 31065, Union City, NJ 07087 and to legal@terrascend.com; (ii) the Employee, to his home mailing address and email address on file.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5**Entire Agreement.** Employee hereby ratifies, accepts, and agrees to the terms of this Agreement, and acknowledges receipt of a copy hereof. The Parties to this Agreement mutually agree that it shall be binding upon them, their heirs, executors, administrators, personal representatives, successors and assigns; that the provisions hereof shall survive this Agreement and shall not be merged into its performance. This Agreement constitutes the final, complete, and exclusive agreement of the Parties with respect to the subject matter hereof and supersedes and merges all prior agreements or discussions with the Company on this subject matter. Any modification, amendment, or addenda to this Agreement shall be null, void, and unenforceable unless made in a writing that makes specific reference to the section of this Agreement being amended and executed by both Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6**Governing Law**. This Agreement, for all purposes, shall be construed in accordance with the laws of Pennsylvania without regard to conflicts of law principles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7**Controversies Arising Out of Agreement.** The Parties agree that any judicially cognizable controversy or claim arising out of or relating to this Agreement, or its breach shall be resolved through a confidential and binding arbitration before a single neutral arbitrator in Pennsylvania in accordance with the Employment Arbitration Rules & Procedures of the Judicial Arbitration and Mediation Services ("**JAMS**"), except as otherwise set forth below. The JAMS rules and procedures may be found online at https://www.jamsadr.com/rules-employment-arbitration/. The arbitrator may grant any remedy or relief that the arbitrator deems just and equitable under the law, including, but not limited to, any remedy or relief that would have been available to the Parties had the matter been heard in court. **Both Employee and the Company expressly waive their right to a jury trial.** This <u>Section 7.7</u> is intended to be the exclusive method for resolving any and all claims by the Parties against each other for payment of damages under this Agreement or relating to Employee's employment. Nothing in this Agreement shall restrict or limit Employee's rights that cannot be waived by agreement, including any nonwaivable right to file or participate in a complaint or investigation by a law enforcement or government agency. This Agreement shall not limit either Party's right to obtain a provisional remedy from any court of competent jurisdiction as may be necessary to protect their rights and interests pending the outcome of arbitration, including without limitation injunctive relief, in any court of competent jurisdiction. Seeking any such relief shall not be deemed to be a waiver of such Party's right to compel arbitration. The prevailing party shall be entitled to recover all fees and costs from the other party arising from any arbitration brought pursuant to this Section. All costs of the arbitration, including the JAMS' administrative fees and the fee of the arbitrator, shall be borne by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8**Advice of Counsel**. Each of the Parties to this Agreement warrants and represents that in executing this Agreement such Party was encouraged to, and provided ample time to, consult with an attorney of the Party's choice. The Parties acknowledge and represent that, in executing this Agreement, they have not relied on any inducements, promises, or representations other than those matters expressly set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9**Acknowledgement of Full Understanding**. EMPLOYEE ACKNOWLEDGES AND AGREES THAT EMPLOYEE HAS FULLY READ, UNDERSTANDS, AND VOLUNTARILY ENTERS INTO THIS AGREEMENT. THE EMPLOYEE ACKNOWLEDGES AND AGREES THAT EMPLOYEE HAS HAD AN OPPORTUNITY TO ASK QUESTIONS AND CONSULT WITH AN ATTORNEY OF EMPLOYEE'S CHOICE BEFORE SIGNING THIS AGREEMENT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.10 **Code Section 409A**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Parties agree that this Agreement and the benefits and rights to which Employee could become entitled under this Agreement are intended to be exempt from or, to the extent applicable, comply with Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations and other

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guidance issued thereunder (collectively, "Code Section 409A"), and all provisions of this Agreement shall be interpreted, construed and administered in a manner consistent with this intent and the requirements for avoiding taxes or penalties under Code Section 409A. For purposes of this Agreement, phrases similar to "terminate employment" mean the date Employee ceases to be an employee of the Company and all members of the Company's "controlled group of corporations" as described in Treasury Regulation Section 1.409A-1(h)(3). Notwithstanding the preceding sentence, Employee must incur a "separation from service" with the Company as that term is defined in Code Section 409A(a)(2)(A)(i) of the and in Treasury Regulation Section 1.409A-1(h), to terminate employment under this Agreement and receive Severance Pay. Further, for purposes of Code Section 409A, any installment payments or benefits provided under this Agreement shall be treated as separate payments. If Employee or the Company believes, at any time, that any benefit or right to which Employee could become entitled under this Agreement is not exempt from Code Section 409A and does not comply with Code Section 409A, Employee or the Company shall promptly advise the other Party and shall negotiate reasonably and in good faith to amend the terms of such arrangement such that it complies (with the most limited possible economic effect on Employee or the Company). In addition, the Company shall not take any action that would expose any payment or benefit to Employee under this Agreement or under any plan, arrangement or other agreement to the additional tax imposed under Code Section 409A, unless (i) the Company is obligated to take the action under an agreement, plan or arrangement to which Employee is a party; (ii) the Company advises Employee in writing that the action may result in the imposition of the additional tax; and (iii) Employee subsequently requests the action in a writing that acknowledges that Employee shall be responsible for any effect of the action under Code Section 409A. In no event whatsoever will the Company be liable for any additional tax, interest, or penalties that may be imposed on Employee under Code Section 409A or any damages for failing to comply with Code Section 409A. To the extent any reimbursement of costs and expenses provided for under this Agreement constitutes taxable income to Employee for Federal income tax purposes, all such reimbursements shall be made no later than December 31 of the calendar year following the calendar year in which the expenses to be reimbursed are incurred. Further, notwithstanding anything to the contrary herein, except to the extent any expense, reimbursement or in-kind benefit provided pursuant to this Agreement does not constitute a "deferral of compensation" within the meaning of Code Section 409A: (i) the amount of expenses eligible for reimbursement or in-kind benefits provided to Employee during any calendar year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided to Employee in any other calendar year; and (ii) the right to payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Notwithstanding anything in this Agreement to the contrary, if Employee is a "specified employee" as defined in Code Section 409A and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Employee) until the first business day of the seventh month following the date of the Employee's termination of employment (or the earliest date as is permitted under Section 409A of the Code).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)In the event that any changes are made to Code Section 409A or to the Treasury Regulations or other guidance issued thereunder, this Section 7.10 shall be deemed amended to the extent necessary to cause this Agreement to comply with such changes to such law or guidance.

[*Signature page follows*]

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**IN WITNESS WHEREOF**, the Company and the Employee have duly executed this Agreement as of the date set out above.

# TERRASCEND EMPLOYEE
 <u>/s/ Ziad Ghanem</u> <u>/s/ Ziad Ghanem</u> 

By: Ziad Ghanem Ziad Ghanem

Title: President and Chief Executive Officer

Date: 11/3/2025 Date: 11/3/2025

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## Exhibit 10.21

# TERRASCEND EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement ("**Agreement**") signed as of October 31, 2026, amends and restates that certain Executive Employment Agreement ("**Original Agreement**") made and effective as of May 16, 2022, by and between TerrAscend USA, Inc., a Delaware corporation ("**TerrAscend**" or the "**Company**") and Lynn Gefen ("**Employee**"), residing at [\*\*\*]. The Company and Employee are sometimes individually referred to as a "**Party**" and collectively as the "**Parties**."

# EXPLANATORY STATEMENT
WHEREAS, Employee has been employed by the Company since May 23, 2022 ("**Effective Date**") as its Chief Legal Officer and Corporate Secretary and since November 12, 2024 as its Chief People Officer;

WHEREAS, the Parties desire to amend the Original Agreement to among other things, provide for certain enhanced provisions and otherwise on the terms set out herein; and

WHEREAS, the Company desires to be assured that Employee will maintain the Company's proprietary and confidential information and will not share or disclose any trade secrets, confidential and/or proprietary information of the Company in violation of this Agreement.

NOW, THEREFORE, the Parties wishing to memorialize the terms and conditions of their agreement and in consideration of the foregoing and of the mutual promises contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

# ARTICLE I EMPLOYMENT
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1**At-Will Employment.** Commencing on the Effective Date, the Company shall employ Employee on an at-will basis and Employee hereby accepts such at-will employment upon the terms and conditions set forth in this Agreement. As an at-will employee, Employee's employment will have no specified period and may be terminated by Employee or the Company at any time, and for any reason, with or without notice.

# ARTICLE II
**DUTIES, RESPONSIBILITIES, LOCATION AND HOURS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1**Duties and Scope of Employment.** Employee shall be employed by the Company in the exempt position of Chief People and Legal Officer, and Corporate Secretary and Employee shall perform such duties as are consistent with this position as may be assigned by Employee's manager or his or her designee. During Employee's employment with the Company, Employee shall diligently, to the best of Employee's ability, and with all highest degree of good faith and loyalty, perform all such duties incident to the position and use best efforts to promote the interests of the Company.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2**Reporting Relationship**. Employee will report to the President and Chief Executive Officer or to such other officer or employee as determined in the sole discretion of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3**Location of Employment**. The Company currently has work sites in Pennsylvania, New Jersey, Maryland, California, Ohio and Canada**.** It is anticipated that Employee will be working primarily from a home office located in Connecticut (or such other location agreed to by the Company) but will be expected to travel temporarily to other TerrAscend facilities throughout the United States and potentially in Canada in order to perform duties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4**Obligations to the Company**. While employed by the Company, Employee shall devote Employee's normal and regular business time and attention to the business of the Company. Employee shall not engage in any other business activities that is reasonably likely (a) to materially interfere with the reasonable performance of Employee's duties and responsibilities under this Agreement, or (b) are competitive with the Business (as defined in <u>Section 4.3</u>) of the Company without the express written consent of the Company. Subject to any applicable restrictions concerning related party transactions and/or conflicts of interest, Employee is precluded from using Employee's position with the Company or the Company's relationship with its investors, partners, customers, vendors, suppliers and/or contractors (or that of its affiliates and/or related entities) for private gain or to obtain benefits for Employee or members of Employee's family, or anyone else. Employee shall comply with the Company's policies and rules, including the Company's employee handbook, as they may be in effect from time to time during Employee's employment with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5**No Conflicting Obligations**. Employee has completely and fully disclosed to the Company any obligations, restriction, covenants, commitments, or agreements to which Employee may be bound, or the rights of any other person or entity, whether contractual or otherwise, that may be inconsistent with Employee's obligations under this Agreement. Employee represents and warrants to the Company that (a) the Company has not made any representations, warranty or otherwise provided any advice, legal or otherwise, that Employee's employment with the Company as contemplated by this Agreement will neither infringe on or violate any such obligations, restriction, covenants, commitments, agreements or rights, and (b) Employee has consulted with an attorney of Employee's choice regarding the foregoing and has not relied on any inducements, promises, or representations regarding the foregoing from the Company, any of its affiliates or any of their respective representatives. Without limiting the foregoing, Employee shall not use or disclose any trade secrets or confidential information, or property belonging to any of Employee's former employers or any other person or entity, without proper authorization from them. Additionally, the Company agrees that the existence of, or its receipt of, any notice, litigation or cause of action against or involving the Employee by any former employer of Employee relating to any such obligations, restriction, covenants, commitments, or agreements to which Employee may be bound, or the rights of any other person or entity, whether contractual or otherwise, that may be inconsistent with Employee's obligations under this Agreement shall not be Cause for termination, as defined in Section 5.1(a), and shall not give rise to termination of Employee for Cause unless otherwise ordered by a court of competent jurisdiction.

# ARTICLE III COMPENSATION AND BENEFITS
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1**Compensation**. In consideration of Employee's employment with the Company, execution of this Agreement, and compliance with all terms and conditions set forth herein, the Company agrees to

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provide Employee the compensation and benefits set forth in this <u>Article III</u> of the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)**Salary**. Employee shall earn an annual base salary of US$425,000.00, less all applicable taxes and withholdings as required by law, and such other payroll deductions as are determined by Company policy or as Employee may approve from time-to-time ("**Salary**"), which shall be paid consistent with the Company's ordinary and regular payroll practices and in accordance with applicable law. This position is classified as exempt under federal and state wage and hour laws, meaning that Employee will not be eligible for overtime pay. The Company reserves the right to modify Employee's Salary in its sole discretion any time and in accordance with applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)**Annual Bonus**. Beginning for the 2025 financial year, Employee will be eligible to participate in the Company's annual performance bonus program ("Bonus Program"), as may be in effect from time to time, and shall be eligible for a bonus in the amount of 60% of Employee's Salary on an annual basis under the Bonus Program. The objectives, terms, and conditions of the Bonus Program shall be determined in the sole discretion of the Company. The amount and frequency of any bonus payments shall be reviewed at least annually and determined in the sole discretion of the Company. The Company reserves the right, in its sole discretion, to suspend, revoke, or rescind the Bonus Program in part or in whole at any time. Except as otherwise provided in the Bonus Program or this Agreement, in order to receive payment of any bonus (or any portion thereof), Employee must be an employee of the Company on the date such bonus is paid, and Employee must not have given notice of the termination of Employee's employment without Good Reason (as defined in Section 5.1(d) of this Agreement) or received notice of the termination for Cause of Employee's employment by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)**Long Term Incentive (LTI).** Beginning for the 2025 financial year, Employee shall be eligible to receive LTI in the form of Restricted Stock Units ("**RSUs**") pursuant to the Company's Share Unit Plan and as determined by the Company's Board of Directors ("**Board of Directors**") from time to time. In light of Employee's role within the Company, Employee will be eligible for an LTI award with a value of up to 75% of Employee's Salary in RSUs. Unless otherwise approved by the Board of Directors with respect to any individual grant, RSUs granted as LTI vest in equal increments (i.e., 25%) on the 12-month, 24-month, 36-month and 48-month anniversary dates of the grant date and will be granted in the first available open trading window in the year in which they are granted; <u>provided</u>, that, in the event Employee's employment is terminated without Cause or due to Employee's Disability (as defined in Section 5.1(e) of this Agreement) or death or Employee voluntarily terminates employment for Good Reason, any unvested RSUs shall vest pro rata through the date of such termination based on the number of months between the date of grant and the termination date relative to 48 months and <u>provided further</u> that, in the event of a Change of Control (as defined in Section 5.1(g) of this Agreement), the RSUs will become fully vested.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)**Stock Option Plan**. During Employee's employment, Employee may be granted options for shares of common stock of the Company (the "**Option**"), in accordance with the TerrAscend Stock Option Plan ("**Stock Option Plan**"), which shall be determined in the sole discretion of the Board of Directors. Pursuant to the terms of the Company's then existing Stock Option Plan and upon approval by the Board of Directors and unless otherwise approved by the Board of Directors with respect to any individual grant, the Option will have the following terms and conditions, which shall be evidenced in an option grant agreement: (i) the exercise price (per share) for each share of common stock of the Company

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associated with the Option will be equal to the fair market value of the share on the date of grant; (ii) unless otherwise described in Employee's option grant agreement, the Option will vest in equal increments (i.e., 25%) on the 12-month, 24-month, 36-month and 48-month anniversary dates of the grant date; provided that Employee is employed by the Company on each of the corresponding dates; provided further, that, in the event of Employee's employment is terminated without Cause or due to Employee's Disability (as defined in Section 5.1(e) of this Agreement) or death or Employee voluntarily terminates employment for Good Reason, the unvested portion of the Option shall vest pro rata through the date of such termination based on the number of months between the date of grant and the termination date relative to 48 months; and provided further that, in the event of a Change of Control (as defined in Section 5.1(g) of this Agreement), the Option will become fully vested and exercisable; (iii) unless otherwise described in Employee's option grant agreement, the Option will be handled as defined in the Stock Option Plan and (iv) the Option will expire ten (10) years from the date of grant. By signing this Agreement, Employee agrees to only purchase or sell Company stock in compliance with the Company's then existing policies, procedures, and black-out periods, and other terms and conditions as established by the Stock Option Plan and Employee's option grant agreement. If there is any discrepancy between the description of the Stock Option Plan in this Section and the Stock Option Plan document, the Stock Option Plan document will control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2**Benefits**. During Employee's employment with the Company, Employee shall be entitled to participate in all employee benefit plans, practices, and programs maintained by the Company, as in effect from time to time (collectively, "**Employee Benefit Plans**"), on a basis which is no less favorable than is provided to other similarly situated employees of the Company, to the extent consistent with applicable law and the terms of the applicable Employee Benefit Plans. The Company reserves the right to amend or terminate any Employee Benefit Plans, at any time in its sole discretion, subject to the terms of such Employee Benefit Plan and applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3**Paid Time Off**. Employee will receive paid time off ("**PTO**") in accordance with policies offered by the Company (including vacation, sick, personal time off and company holidays), on a basis which is no less favorable than is provided to other similarly situated employees of the Company, which shall be taken in accordance with Company policies as in effect from time to time, which may be modified in the sole discretion of the Company, and applicable law. The Company will additionally provide Employee with any paid or unpaid leave and any other benefits to which Employee is entitled and eligible to receive under applicable federal, state, and or local law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4**General Business Expenses**. Employee shall be reimbursed for reasonable, necessary, and authorized travel and other business expenses in connection with Employee's duties for the Company, pursuant to and consistent with the Company's policies and procedures, as may be modified from time to-time in the sole discretion of the Company. The Company shall reimburse Employee for such expenses upon presentation of an itemized account and appropriate supporting documentation in accordance with the Company's policy and procedure.

# ARTICLE IV

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**CONFIDENTIALITY; RESTRICTIVE COVENANTS; AND ASSIGNMENT OF INVENTIONS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1**Confidentiality**. The Employee understands and acknowledges that during Employee's employment with the Company, Employee will be exposed to Confidential Information (defined below) concerning the business or affairs of the Company that is proprietary and which rightfully belongs to the Company. Employee further understands and acknowledges that this Confidential Information and the Company's ability to reserve it for the exclusive knowledge and use of the Company is of great competitive importance and commercial value to the Company, and that improper use or disclosure of the Confidential Information by Employee might cause the Company to incur financial costs, loss of business advantage, liability under confidentiality agreements with third parties, civil damages and criminal penalties. Employee will not use for Employee's own benefit, either directly or indirectly, or disclose any such Confidential information, at any time, either during or after Employee's employment with the Company, to any other person, other than the Company or its employees, without the prior written consent or authorization of the Company. Employee shall take all reasonable steps to safeguard such Confidential Information and to protect such information against disclosure, misuse, loss and theft. Employee's obligations under this <u>Section 4.1</u> with respect to any specific Confidential Information shall cease when that specific portion of the Confidential Information becomes generally known to the public or the relevant trade or industry other than as a result of the Employee's actions or omissions. In the event Employee is required by law to make any disclosure of Confidential Information, Employee shall promptly notify the Company, in writing, of the basis for the extent of the required disclosure and shall cooperate with the Company to preserve in full confidentiality of all Confidential Information and other proprietary rights.

The term "**Confidential information**" means any confidential or proprietary information of the Company, its affiliates, and/or its related entities, that is not generally known to the public or in the relevant trade or industry, which was obtained from the Company, its affiliates, and/or its related entities, or which was learned, discovered, developed, conceived, originated or prepared during or in the course of the performance of any services by Employee on behalf of the Company, its affiliates, and/or or any of its related entities, whether in physical or electronic form or any other medium, and which falls within the following categories: (i) trade secrets of the Company, any affiliate, and/or any related entity; (ii) trade secrets of any investor, partner, or customer of the Company, any affiliate, and/or related entity, which was obtained pursuant to a confidentiality agreement; (iii) information that relates to existing or contemplated products, services, distribution, agreements, proposals, manuals, technology, designs, processes, formulae, algorithms and research or product developments of the Company, any affiliate, and/or any related entity or of any customer, investor, or partner of the Company, any affiliate, and/or related entity; (iv) information relating to business plans, pricing, sales and marketing methods and data, methods of doing business, financial or personnel information, customer lists, customer usages and/or requirements, supplier information of the Company, any affiliate, and/or related entity or of any customer, investor, or partner of the Company, any affiliate, and/or related entity; (v) information relating to proposals, contracts, content strategies, content performance analytics, of the Company, any affiliate, or any related entity, or of any customer, investor, or partner of the Company, any affiliate, and/or related entity; and (vi) any other confidential information which the Company, any affiliate, and/or related entity, or of any customer, investor, or partner of the Company, any affiliate, and/or related entity have protected by patent, patent applications, copyright or by keeping it secret and confidential.

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Nothing in this Agreement shall be construed to prevent disclosure of Confidential Information as may be required or permitted by applicable law or regulation, or pursuant to the valid order of a court of competent jurisdiction or an authorized government agency, provided that the disclosure does not exceed the extent of disclosure required by such law, regulation, or order. Nothing in this section is intended to waive, restrict, or limit Employee's rights, communications, or actions that cannot be waived by agreement, including, but not limited to any nonwaivable rights that Employee may have under the National Labor Relations Act or concerning communications with fair employment practices agencies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2**DTSA Notice**. Pursuant to the Federal Defend Trade Secrets Act of 2016 ("**DTSA**"), an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law. An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3**Restrictive Covenants**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)**Non-Competition**. Unless prohibited by law, during Employee's employment with the Company and for a period of twelve (12) months after the cessation of Employee's employment with the Company, for whatever reason, Employee shall not, directly or indirectly, participate in any Restricted Activity (defined below) within the Restricted Territory (defined below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)For purposes of this Agreement, **"Restricted Territory"** means the Territories in which TerrAscend operates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)For purposes of this Agreement, "**Business of the Company**" means the business of the cultivation, extraction, processing or formulation of cannabinoid-containing products, and/or the development or commercialization of any technologies for use in the same or services, businesses, or products currently in competition with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)For purposes of this Agreement, **"Restricted Activity"** means, either directly or indirectly, owning, managing, engaging in, operating, controlling, working for, consulting with, rendering services to, doing business with, maintaining any interest in or participating in the ownership, management, operations or control of, any business, in whatever form, which competes with the Business of the Company (a **"Competing Business"**), where (A) Employee is acting in the same or similar capacity that he acted with the Company for a Competing Business; (B) Employee is performing the same or similar duties and responsibilities as Employee performed with the Company for a

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Competing Business; (C) Employee is sharing Confidential Information with a Competing Business or utilizing Confidential Information for the benefit of a Competing Business; or (D) Employee is soliciting the Company's customers or other protected business relationships for purposes of seeking to induce such customers to alter or end their relationship with the Company. For the avoidance of doubt, it is understood by the Parties that a Competing Business is a person, business entity or organization that is in the business of or is engaged, in whole or in part, either alone or together with its affiliates or related entities, in the business of the cultivation, extraction, processing or formulation of cannabinoid-containing products, and/or the development or commercialization of any technologies for use in the same. Notwithstanding the foregoing, Employee may make passive investments in publicly traded entities not to exceed one percent (1%) of the outstanding voting securities of such public entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)As used herein, **"competes with"** means selling, soliciting, marketing or otherwise making available any product, program, process, system or service for any person or entity other than for the Company, which is the same as or similar to or is in competition with, or has a use allied to, or may be substituted for or supplied by, any product, program, process, system or service of the Company, whether in existence or under development during Employee's employment with the Company, or about which Employee acquired Confidential Information (as defined above in <u>Section 4.1</u>) during Employee's employment with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)**Non-Solicitation of Customers and Employees**. During Employee's employment with the Company and for a period of twelve (12) months after the cessation of Employee's employment with the Company, for whatever reason, Employee agrees not to, directly or indirectly, call upon, accept business from, or deal with any of the customers of Company with whom Employee had contact or about whom Employee obtained Confidential Information during Employee's employment with the Company for the purpose of inducing said customer to alter or end its relationship with the Company or to do business with a person or entity that is a Competing Business or preparing to compete against the Company. In addition, for the same period of time, Employee agrees not to, directly or indirectly, solicit, recruit, or attempt to solicit any employee, agent, consultant or independent contractor, member, officer or agent of the Company to alter or terminate his/her/its employment or other relationship with the Company or breach any agreement with or obligation owed to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)**Extension of Restraints**. If Employee violates any restraints specified in this Agreement, whether or not there is litigation relating to such violation, Employee agrees that the period of the restraint shall automatically be extended for the period of the violation. Employee understands that the purpose of this <u>Section 4.3(c)</u> is to give the Company the protection of the restraint for the full agreed upon duration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)**Adjustment of Restraints**. In the event that any one (1) or more of the provisions of this Agreement shall be held to be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remainder hereof shall not, in any way, be affected or impaired thereby, and any such provision or provisions shall be enforced to the fullest extent permitted by law. Moreover, if any one (1) or more of the provisions contained in this Agreement is held to be excessively broad as to duration, scope, activity

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or subject (including, but not limited to, the restrictive covenants contained in this Agreement), such provisions will be construed by excising, limiting, and/or reducing them so that this Agreement is enforceable to the maximum extent compatible with applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)**Employee Acknowledgments, Representations, and Warranties**. For purposes of Article IV, Employee warrants, acknowledges, and agrees that (i) the Company has expended substantial resources in the development of near permanent relationships with its customers and that Employee would not have contact with those customers but for Employee's employment at the Company, (ii) the Company has a protectable interest in its customers and other Confidential Information, (iii) the post-employment restrictions contained in this Agreement are necessary to protect the Company, they are reasonable and narrowly tailored, and they do not restrict Employee's ability to obtain employment or earn a living following Employee's employment with the Company, (iv) Employee willing, voluntarily, and knowingly is entering into this Agreement subject to the reasonable, post-employment restrictions contained in this Agreement, (v) entering into this Agreement does not constitute a breach of any contract or legal obligation with or to any third party, and (vi) Employee has disclosed to the Company any existing restrictions or other legal restrictions that may impact Employee's ability to provide services to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)**Remedies**. Employee agrees that if Employee violates any provision of this Agreement, the Company will suffer immediate and irreparable injury for which it has no adequate remedy at law. If Employee violates any of such provisions, Employee agrees that in addition to any other remedies that may apply, Employee's strict compliance with this Agreement should be ordered by a court of competent jurisdiction, and the Company is therefore entitled to emergency, preliminary, and final injunctive relief to enforce this Agreement. The Company's remedies for breach of this Agreement are cumulative and pursuit of one (1) remedy shall not exclude any other remedy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)**No Reliance**. Employee acknowledges that Employee has read this Agreement carefully and understands its meaning and consequences, and that Employee has not relied on any oral or written statement or representation made by anyone relating to the terms of Employee's employment, other than as set forth in this Agreement. Employee further declares that Employee has had the opportunity to have the contents of this Agreement fully explained to Employee by the legal counsel of Employee's own selection and has acted voluntarily and of Employee's own free will in executing this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)**Employee Acknowledges Sufficient Consideration**. Employee acknowledges and agrees that employment with the Company constitutes sufficient consideration for Employee's promises, duties, obligations and responsibilities hereunder and, further, that the compensation, Option, benefits, severance and other consideration described in this Agreement constitutes consideration to which Employee is not otherwise entitled to receive if Employee did not enter into the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)**Notice to Subsequent Employers**. Before Employee is hired or engaged by any other person or entity that performs services that are the same as or are similar to the Company's services ("**Similar Services**"), Employee shall provide a complete copy of this Agreement to the person or entity to or for which or whom Employee intends to provide services. Employee hereby authorizes the Company to provide a copy of this Agreement to any person or entity providing Similar Services that the Company believes may hire or engage Employee.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5**Personal Electronic Equipment**. Employee acknowledges that, in the performance of services for the Company, Employee may use electronic equipment such as a laptop computer, cell phone, or other electronic device that is owned by Employee (collectively, "**Personal Electronic Equipment**"). Employee acknowledges that all Company information that may become contained on the Personal Electronic Equipment is the sole and exclusive property of the Company. Employee agrees that the Company has the right to access such Company information, at any time, to inspect and/or recover any Company information stored thereon. Employee acknowledges and agrees that Company is not liable for any damage caused to the Personal Electronic Equipment while in its possession or for damaging or deleting any personal Employee information contained thereon.

Employee shall abide by all Company policies and procedures concerning device usage, maintenance, and protection, including, but not limited to preservation of Confidential Information on such devices. Employee agrees to use Company-owned equipment, records, and materials for purposes of Company business only, and to protect them against unauthorized or accidental access, use, modification, destruction, loss, theft or disclosure. Employee agrees to continue to protect the privacy of sensitive, proprietary, and/or Confidential Information. Employee will not leave such sensitive documents in common areas and will take reasonable steps to ensure confidentiality when discussing sensitive information on phone calls or in virtual meetings. Employee agrees and understands that Company equipment and devices are being provided to Employee for business purposes only. Any incidental personal use of Company-owned equipment should not interfere with the use of the equipment for Company business. Employee agrees to immediately report to their supervisor any instances of loss, damage, or unauthorized access.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6**Return of Company Property**. Immediately on the effective date of Employee's termination of employment with the Company, for any reason, or at any time upon request of the Company, Employee shall return all property in Employee's possession belonging to the Company, whether tangible or intangible, including, but not limited to, all physical and electronically stored data, emails, keys, credit cards, equipment, computers, Confidential Information, tablets, cell phones, vehicles,

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books, records, customer information, programs and data compilation, contracts, communications and other materials belonging to the Company, including any Company information stored on Employee's Personal Electronic Equipment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7**Non-Disparagement**. During Employee's employment with the Company and at all times thereafter, Employee shall not divulge, disclose, or communicate to others, in any manner whatsoever, information or statements that disparage or are intended to disparage the Company, including its officers, directors, shareholders, employees, and agents, and its/his/her/their business reputation. Notwithstanding the foregoing, nothing in this Agreement is intended to waive, restrict, or limit Employee's rights, communications, or actions that cannot be waived by agreement, including, but not limited to, Employee's rights under the National Labor Relations Act, the right to disclose information about unlawful acts in the workplace, including, but not limited to, sexual harassment, the right to testify in an administrative, legislative, or judicial proceeding about alleged sexual harassment, or alleged criminal conduct by another party, including the Company, its agents, or employees, if and when Employee has been required or requested to attend the proceeding pursuant to a court order, subpoena, or written request from an administrative agency or the legislature, and the right to make disclosures to or comply with proceedings before the Equal Employment Opportunity Commission, or any other federal, state, or local fair employment practices agency, or pursuant to a valid order of a court of competent jurisdiction; provided that, such compliance does not exceed that required by the law, regulation, or order. Nothing in this Agreement prohibits or restricts Employee from initiating communications directly with, responding to an inquiry from, or providing testimony before the Securities and Exchange Commission (SEC), or any other self-regulatory organization, or any other federal or state regulatory authority.

# ARTICLE V
**TERMINATION, CHANGE OF CONTROL AND SEVERANCE**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1**Termination of Employment**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)**Termination for Cause**. The Company shall have the right to terminate Employee's employment, at any time, for Cause (as defined below) by giving Employee written notice of the effective date of such termination. In the event of such termination for Cause, Employee shall be entitled to receive Employee's Salary accrued and unpaid through the date of termination, together with all accrued and unpaid PTO, and expenses reimbursable pursuant to this Agreement (herein, "**Earned Pay**"). The Earned Pay shall be paid in accordance with the Company's applicable policies and applicable law. Any vested benefits to which Employee is entitled under the Employee Benefit Plans and vested RSUs and options shall be paid in accordance with the terms of the governing plan documents and agreements. For purposes of this Agreement only, the term "**Cause**" means any of the following: (i) Employee materially breaches any fiduciary duty owed to the Company or its affiliates, including the duty of loyalty which has not been cured within ten (10) calendar days of written notice to the Employee; (ii) Employee fails to comply with any valid and legal directive of the Company that is material and is consistent with Employee's obligations under this Agreement, which has not been complied with within ten (10) calendar days of written notice to Employee of such noncompliance; (iii) Employee is convicted of or pleads guilty or nolo contendere to a crime that constitutes a felony (or state law equivalent) or a crime that constitutes a misdemeanor involving moral turpitude or that results in material, reputational,

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or financial harm to the Company, its agents, representatives, or its affiliates; (iv) Employee engages in any act or omission that constitutes a material breach by Employee of any of Employee's duties, responsibilities, and obligations under this Agreement, or any material written policy (as they may be in effect from time to time during Employee's employment) of the Company or any of its affiliates, assuming such obligations are lawful, which has not been cured within ten (10) calendar days of written notice to the Employee; (v) Employee commits an act which negatively impacts, in a material way, the Company or its employees including, but not limited to, engaging in competition with the Company, disclosing confidential information or engaging in sexual harassment or discrimination in violation of Company policies; or (vi) Employee engages in the unauthorized disclosure of Confidential Information of the Company. For purposes of this definition of "Cause," an act or failure to act shall not be deemed willful or intentional unless Employee acted (or failed to act) in bad faith or without a reasonable belief that Employee's action or omission was in the best interest of the Company. For avoidance of doubt, Employee's failure to meet performance goals or objectives, by itself, shall not constitute Cause. In all instances, the Company's CEO, in consultation with the Company's legal counsel and the Board of Directors as appropriate, shall determine, in good faith, whether Cause exists for purposes of this Agreement and whether Employee's employment shall be terminated for Cause. The Company's CEO shall have the authority to waive the consequences under this Agreement of the existence or occurrence of any events, acts, or omissions that constitute Cause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)**Termination without Cause**. Notwithstanding anything to the contrary in this Agreement, the Company may, at any time, terminate Employee's employment without Cause (as defined above) by giving Employee at least thirty (30) days prior written notice of the effective date of Employee's termination. In the event of such termination of employment without Cause, Employee shall be entitled to receive (i) Earned Pay, (ii) severance benefits, which shall consist of an after-tax, lump sum payment equal to the Company's share of Employee's medical coverage under the Company's group health plan, measured as if Employee properly and timely elected continuation coverage as prescribed by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), for the Severance Period (defined in Section 5.2 below) (the "COBRA Cash Stipend"), (iii) severance pay, which shall be equal to Employee's Salary for the Severance Period (as defined in Section 5.2), payable in regular installments in accordance with the Company's standard payroll practices ("Severance Pay"), and (iv) the Employee's full bonus (cash or equivalent) for the prior calendar year if it has not yet been paid and the Employee's full bonus (cash or equivalent) for the current calendar year. The Company shall commence payment of Severance Pay and shall pay the COBRA Cash Stipend and bonuses within sixty (60) days of Employee's termination of employment; provided, that Employee has executed, delivered, and not revoked the Waiver and General Release described in Section 5.3 of this Agreement. In the event the sixty (60) day time period spans two (2) calendar years, payment will begin or be made, as applicable, in the second calendar year. The first payment of the Severance Pay shall include any installments to which Employee would have been entitled had payments commenced upon the date of Employee's termination of employment. The Earned Pay shall be paid in accordance with the Company's applicable policies and applicable law. Any vested benefits to which Employee is entitled under the Employee Benefit Plans and vested RSUs and options shall be paid in accordance with the terms of the governing plan documents and agreements. Employee must satisfy, at all times, the conditions described in Section 5.3, Section 5.4, Article IV and Article VI to receive the COBRA Cash Stipend and continue to receive

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Severance Pay under this Section 5.1(b) following Employee's termination of employment. If, during the Severance Period, Employee engages in any Restricted Activity with any Competing Business, Employee shall notify the Company in writing no later than five (5) business days from the date Employee has commenced such Restricted Activity ("Commencement Date"). Further, upon determination by a court of competent jurisdiction that Employee has violated the restrictive covenants set forth in Article IV, Employee shall repay all Severance Pay paid to Employee following the cessation of Employee's employment with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)**Termination on Account of Resignation**. Employee may, at any time, terminate Employee's employment by voluntary resignation by giving the Company at least thirty (30) days prior written notice of the effective date of such termination. In the event of Employee's termination of employment due to voluntary resignation not covered by Section 5.1(d), neither the COBRA Cash Stipend nor the Severance Pay shall be provided under this Agreement and all rights, duties, and obligations of the Parties under this Agreement, other than those obligations expressed in Article IV and Article VI, and Employee's right to receive Earned Pay, vested benefits under any Employee Benefit Plans and vested RSUs and options, shall cease as of the employment termination date. The Earned Pay shall be paid in accordance with the Company's applicable policies and applicable law. Any vested benefits to which Employee is entitled under the Employee Benefit Plans and vested RSUs and options shall be paid in accordance with the terms of the governing plan documents and agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)**Termination on Account of Resignation with Good Reason**. Employee shall have the right to terminate Employee's employment by voluntary resignation with Good Reason. The term "**Good Reason**" means any one (1) or more of the following events that occurs without the prior written consent of Employee: (i) a material diminution in Employee's Salary; (ii) a demotion, or change in reporting relationship of Employee to someone other than the Company's Executive Chairman, Chief Executive Officer or a member of the Board of Directors, and in the event of a Change of Control to an individual in the respective positions employed by an entity other than the acquiror, or one that results in a material diminution of Employee's authority, duties, or responsibilities; or (iii) Employee is notified by the Company that she is required to relocate to a place more than 25 miles from her current place of employment in Connecticut, or (iv) any other action or inaction that constitutes a material breach by the Company of the terms of this Agreement. To qualify as a voluntary resignation with "Good Reason," Employee shall provide the Company with notice of the existence of the event described above within ninety (90) days of the initial existence of such event, and the Company shall have thirty (30) days to remedy the event measured from the date it received Employee's notice. If the event that qualifies as Good Reason is not cured and the Employee resigns within six (6) months of the initial existence of such Good Reason event, then Employee's voluntary resignation shall be treated in all respects as an involuntary termination of employment without Cause by the Company of Employee's employment under Section 5.1(b), and the COBRA Cash Stipend and Severance Pay provided in connection with an involuntary termination without Cause (together with the conditions described in Section 5.3, Section 5.4, Article IV and Article VI) shall apply.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)**Termination on Account of Disability**. If Employee is determined to have a "**Disability**" (defined herein) and ceases active employment with the Company, Employee shall be entitled to receive

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Employee's Salary and to continue to participate in the Employee Benefit Plans described in <u>Section 3.2</u>, as in effect with respect to Employee immediately prior to such cessation of active employment, for six (6) months (or, if less, until Employee is able to return to active employment with the Company). If Employee is unable to return to active employment with the Company at the completion of that six (6) month period, the Company may elect to terminate Employee's employment by sending written notice of such election to Employee. In such event, the Company shall provide Employee Earned Pay, her pro rata bonus and the COBRA Cash Stipend for the same period as described in <u>Section 5.1(b)</u> (as if employment had been terminated involuntarily by the Company without Cause at the completion of such initial six (6) month period), but not the Severance Pay. The Earned Pay shall be paid in accordance with the Company's applicable policies and applicable law. The COBRA Cash Stipend shall be paid within sixty (60) days of Employee's termination of employment; p<u>rovided</u>, that Employee has executed, delivered, and not revoked the Waiver and General Release described in <u>Section 5.3</u> of this Agreement. In the event the sixty (60) day time period spans two (2) calendar years, the COBRA Cash Stipend payment will be made in the second calendar year. Any vested benefits to which Employee is entitled under the Employee Benefit Plans and vested RSUs and options shall be paid in accordance with the terms of the governing plan documents and agreements. The term "**Disability**" shall mean Employee is unable to perform the essential functions of his position by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months. Any determination of whether Employee has a Disability shall be based upon sufficient medical evidence from a physician selected by Employee (or Employee's personal representative or guardian) for that purpose. If any question arises as to whether during any period Employee has a Disability, Employee shall, at the request of the Company, submit to the Company a certification, in reasonable detail by a physician selected by the Company to whom Employee (or Employee's personal representative or guardian) has no reasonable objection, as to whether Employee has a Disability or how long the Disability will continue. Employee shall cooperate with any reasonable request of the physician in connection with such certification. If a question arises and Employee fails to submit such certification, the Company's determination of such issue shall be binding on Employee. Nothing in this Section 5.1(e) shall be construed to waive Employee's rights, if any, under existing law including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)**Termination on Account of Death**. In the event of Employee's death while in the employ of the Company, the personal representative of Employee's estate shall be entitled to receive Employee's Earned Pay, pro-rated bonus, vested RSUs and any vested but unexercised options. The Earned Pay and pro-rated bonus shall be paid in accordance with the Company's applicable policies and applicable law. Any vested benefits to which Employee is entitled under the Employee Benefit Plans and vested RSUs and options shall be paid in accordance with the terms of the governing plan documents and agreements. All other rights of Employee hereunder shall terminate as of such date of death.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)**Change of Control; Termination on Account of Change of Control.** As set out above, in the event of a Change of Control, 100% of the Option and RSUs will become vested and exercisable. This provision supersedes any conflicting provisions relating to vesting upon a Change of Control stipulated in the Stock Option Plan and Share Unit Plan, respectively. In the event Employee's employment is terminated without Cause or by Employee for Good Reason within 24 months following a Change of Control, Employee shall be entitled to receive (i) Earned Pay, (ii) two times (2x) the amount

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of Severance Pay, (iii) two times (2x) the amount of the COBRA Cash Stipend and (iv) the Employee's full bonus for the prior calendar year if it has not yet been paid and the Employee's full bonus for the current calendar year. ((ii) – (iv) collectively, the "**Change of Control Severance Pay**"). The Change of Control Severance Pay shall be paid in a lump sum payment within sixty (60) days of Employee's termination of employment; p<u>rovided</u>, that Employee has executed, delivered, and not revoked the Waiver and General Release described in <u>Section 5.3</u> of this Agreement. In the event the sixty (60) day time period spans two (2) calendar years, the lump sum payment will be made in the second calendar year. The Earned Pay shall be paid in accordance with the Company's applicable policies and applicable law. Any vested benefits to which Employee is entitled under the Employee Benefit Plans and vested RSUs and options shall be paid in accordance with the terms of the governing plan documents and agreements. Employee must satisfy, at all times, the conditions described in <u>Section 5.3</u>, <u>Section 5.4</u>, Article IV and Article VI to receive the Change of Control Severance Pay following Employee's termination of employment. Further, upon determination by a court of competent jurisdiction that Employee has violated the restrictive covenants set forth in Article IV, Employee shall repay all Severance Pay paid to Employee following the cessation of Employee's employment with the Company.

For purposes of this Agreement only, the term "**Change of Control"** shall be defined as (i) the acquisition of a sufficient number of voting securities in the capital of the Company so that the acquiror, together with Persons acting jointly or in concert with the acquiror, becomes entitled, directly or indirectly, to exercise more than 50% of the voting rights attaching to the outstanding voting securities in the capital of the Company (provided that, prior to the acquisition, the acquiror was not entitled to exercise more than 50% of the voting rights attaching to the outstanding voting securities in the capital of the Company); (ii) the completion of a consolidation, merger, arrangement or amalgamation of the Company with or into any other entity whereby the voting securityholders of the Company immediately prior to the consolidation, merger, arrangement or amalgamation receive less than 50% of the voting rights attaching to the outstanding voting securities of the consolidated, merged, arranged or amalgamated entity; or (iii) the completion of a sale whereby all or substantially all of the Company's undertakings and assets become the property of any other entity and the voting securityholders of the Company immediately prior to the sale hold less than 50% of the voting rights attaching to the outstanding voting securities of that other entity immediately following that sale.

For purposes of this Agreement only, the term "**Person**" will be broadly interpreted and includes (i) a natural person, whether acting in his or her own capacity, or in his or her capacity as executor, administrator, estate trustee, trustee or personal or legal representative, and the heirs, executors, administrators, estate trustees, trustees or other personal or legal representatives of a natural person; (ii) a corporation or a company of any kind, a partnership of any kind, a sole proprietorship, a trust, a joint venture, an association, an unincorporated association, an unincorporated syndicate, an unincorporated organization or any other association, organization or entity of any kind; and (iii) a governmental authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2**Severance Period**. The term "**Severance Period**" means 12 months.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3**Waiver and Release**. A condition precedent to (a) the payment of the COBRA Cash Stipend and

(b) the commencement and continued receipt of Severance Pay, which shall be payable pursuant to

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Section <u>5.1(b), Section 5.1(d), Section 5.1(e)</u> or <u>Section 5.1(g)</u>, as applicable, shall be the execution by Employee of a waiver and general release of all claims, which is not revoked during the revocation period. Such waiver and general release of all claims shall be in a form and substance as reasonably required by Company. The failure of Employee to execute the Waiver and General Release (or any revocation during the revocation period) shall relieve the Company of all obligations to pay the COBRA Cash Stipend and/or Severance Pay under <u>Section 5.1(b), Section 5.1(d), Section 5.1(e)</u> or <u>Section 5.1(g)</u> but shall not relieve Employee of Employee's obligations under Article IV and Article VI herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4**Other Conditions on Severance Benefits and Pay**.

Notwithstanding any other provision of this Agreement to the contrary, Employee shall not continue to be eligible for health and welfare benefit plan coverage (other than the right to elect continuation coverage under COBRA or similar state continuation coverage laws) after Employee's termination of employment. In the event Employee properly and timely elects continuation coverage under COBRA, Employee shall be required to pay such portion of the cost of such continuation coverage, as is paid by other similarly situated active executives.

# ARTICLE VI COOPERATION
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1**Cooperation**. The Parties agree that certain matters in which Employee will be involved during Employee's employment with Company may necessitate Employee's cooperation in the future. Accordingly, following Employee's termination of employment for any reason, to the extent reasonably requested by the Company and provided that advanced notice is given and is coordinated to the extent possible with Employee, Employee shall cooperate with the Company in connection with internal investigations, third party investigations, investigations by governmental agencies, claims made by third parties, litigation, arbitration, meditation and all other matters related to the Company, in which Employee has personal knowledge; <u>provided</u> that, Company shall make reasonable efforts to minimize disruption of Employee's personal and professional activities. Company shall reimburse Employee for reasonable expenses incurred in connection with such cooperation (e.g., airfare, lodging, rental car, mileage, meals, etc.).

# ARTICLE VII GENERAL PROVISIONS
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1**Severability and Modification by Court**. If any term or provision of this Agreement shall, for any reason, be adjudged by any court of competent jurisdiction to be invalid or unenforceable, such judgment shall not affect, impair, or invalidate the remainder of this Agreement, but shall be confined in its operation to the provisions of this Agreement directly involved in the controversy in which such judgment shall have been rendered. Notwithstanding the above, in the event any provision as presently set forth is determined to be invalid by a court of competent jurisdiction, the Parties agree that this Agreement shall be appropriately modified by the court so that each and every provision of this Agreement is enforceable to the maximum extent permitted by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2**Waiver**. No waiver by the Company of any breach of this Agreement shall be a waiver of

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any preceding or succeeding breach. No waiver by the Company of any right under this Agreement shall be construed as a waiver of any other right. The Company shall not be required to give notice to enforce strict adherence to all terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3**Survival and Assignability**. The provisions of this Agreement that would naturally survive the termination of Employee's employment with the Company shall survive such termination and shall continue in full force and effect. This Agreement is personal to Employee and may not be assigned by Employee. The Company may assign this Agreement to, and it shall be enforceable by, any successor or assign (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4**Notices**. Any notices required under this Agreement shall be sent by personal delivery, registered or certified mail, electronic mail or overnight carrier to: (i) the Company, at TerrAscend, 500 Paterson Plank Rd, STE 31065, Union City, NJ 07087 and to legal@terrascend.com; (ii) the Employee, to his home mailing address and email address on file.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5**Entire Agreement.** Employee hereby ratifies, accepts, and agrees to the terms of this Agreement, and acknowledges receipt of a copy hereof. The Parties to this Agreement mutually agree that it shall be binding upon them, their heirs, executors, administrators, personal representatives, successors and assigns; that the provisions hereof shall survive this Agreement and shall not be merged into its performance. This Agreement constitutes the final, complete, and exclusive agreement of the Parties with respect to the subject matter hereof and supersedes and merges all prior agreements or discussions with the Company on this subject matter. Any modification, amendment, or addenda to this Agreement shall be null, void, and unenforceable unless made in a writing that makes specific reference to the section of this Agreement being amended and executed by both Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6**Governing Law**. This Agreement, for all purposes, shall be construed in accordance with the laws of Pennsylvania without regard to conflicts of law principles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7**Controversies Arising Out of Agreement.** The Parties agree that any judicially cognizable controversy or claim arising out of or relating to this Agreement, or its breach shall be resolved through a confidential and binding arbitration before a single neutral arbitrator in Pennsylvania in accordance with the Employment Arbitration Rules & Procedures of the Judicial Arbitration and Mediation Services ("**JAMS**"), except as otherwise set forth below. The JAMS rules and procedures may be found online at https://www.jamsadr.com/rules-employment-arbitration/. The arbitrator may grant any remedy or relief that the arbitrator deems just and equitable under the law, including, but not limited to, any remedy or relief that would have been available to the Parties had the matter been heard in court. **Both Employee and the Company expressly waive their right to a jury trial.** This <u>Section 7.7</u> is intended to be the exclusive method for resolving any and all claims by the Parties against each other for payment of damages under this Agreement or relating to Employee's employment. Nothing in this Agreement shall restrict or limit Employee's rights that cannot be waived by agreement, including any nonwaivable right to file or participate in a complaint or investigation by a law enforcement or government agency. This Agreement shall not limit either Party's right to obtain a provisional remedy from any court of competent jurisdiction as may be necessary to protect their rights and interests pending the outcome of arbitration, including without limitation injunctive relief, in any court of competent

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jurisdiction. Seeking any such relief shall not be deemed to be a waiver of such Party's right to compel arbitration. The prevailing party shall be entitled to recover all fees and costs from the other party arising from any arbitration brought pursuant to this Section. All costs of the arbitration, including the JAMS' administrative fees and the fee of the arbitrator, shall be borne by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8**Advice of Counsel**. Each of the Parties to this Agreement warrants and represents that in executing this Agreement such Party was encouraged to, and provided ample time to, consult with an attorney of the Party's choice. The Parties acknowledge and represent that, in executing this Agreement, they have not relied on any inducements, promises, or representations other than those matters expressly set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9**Acknowledgement of Full Understanding**. EMPLOYEE ACKNOWLEDGES AND AGREES THAT EMPLOYEE HAS FULLY READ, UNDERSTANDS, AND VOLUNTARILY ENTERS INTO THIS AGREEMENT. THE EMPLOYEE ACKNOWLEDGES AND AGREES THAT EMPLOYEE HAS HAD AN OPPORTUNITY TO ASK QUESTIONS AND CONSULT WITH AN ATTORNEY OF EMPLOYEE'S CHOICE BEFORE SIGNING THIS AGREEMENT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.10**Code Section 409A**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Parties agree that this Agreement and the benefits and rights to which Employee could become entitled under this Agreement are intended to be exempt from or, to the extent applicable, comply with Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations and other guidance issued thereunder (collectively, "Code Section 409A"), and all provisions of this Agreement shall be interpreted, construed and administered in a manner consistent with this intent and the requirements for avoiding taxes or penalties under Code Section 409A. For purposes of this Agreement, phrases similar to "terminate employment" mean the date Employee ceases to be an employee of the Company and all members of the Company's "controlled group of corporations" as described in Treasury Regulation Section 1.409A-1(h)(3). Notwithstanding the preceding sentence, Employee must incur a "separation from service" with the Company as that term is defined in Code Section 409A(a)(2)(A)(i) of the and in Treasury Regulation Section 1.409A-1(h), to terminate employment under this Agreement and receive Severance Pay. Further, for purposes of Code Section 409A, any installment payments or benefits provided under this Agreement shall be treated as separate payments. If Employee or the Company believes, at any time, that any benefit or right to which Employee could become entitled under this Agreement is not exempt from Code Section 409A and does not comply with Code Section 409A, Employee or the Company shall promptly advise the other Party and shall negotiate reasonably and in good faith to amend the terms of such arrangement such that it complies (with the most limited possible economic effect on Employee or the Company). In addition, the Company shall not take any action that would expose any payment or benefit to Employee under this Agreement or under any plan, arrangement or other agreement to the additional tax imposed under Code Section 409A, unless (i) the Company is obligated to take the action under an agreement, plan or arrangement to which Employee is a party; (ii) the Company advises Employee in writing that the action may result in the imposition of the additional tax; and (iii) Employee subsequently requests the action in a writing that acknowledges that Employee shall be responsible for any effect of the action under Code Section 409A. In no event whatsoever will the Company be liable for any additional tax, interest, or penalties that may be imposed on Employee under Code Section 409A or any damages for failing to

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comply with Code Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)To the extent any reimbursement of costs and expenses provided for under this Agreement constitutes taxable income to Employee for Federal income tax purposes, all such reimbursements shall be made no later than December 31 of the calendar year following the calendar year in which the expenses to be reimbursed are incurred. Further, notwithstanding anything to the contrary herein, except to the extent any expense, reimbursement or in-kind benefit provided pursuant to this Agreement does not constitute a "deferral of compensation" within the meaning of Code Section 409A: (i) the amount of expenses eligible for reimbursement or in-kind benefits provided to Employee during any calendar year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided to Employee in any other calendar year; and (ii) the right to payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Notwithstanding anything in this Agreement to the contrary, if Employee is a "specified employee" as defined in Code Section 409A and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Employee) until the first business day of the seventh month following the date of the Employee's termination of employment (or the earliest date as is permitted under Section 409A of the Code).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)In the event that any changes are made to Code Section 409A or to the Treasury Regulations or other guidance issued thereunder, this Section 7.10 shall be deemed amended to the extent necessary to cause this Agreement to comply with such changes to such law or guidance.

[*Signature page follows*]

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**IN WITNESS WHEREOF**, the Company and the Employee have duly executed this Agreement as of the date set out above.

# TERRASCEND EMPLOYEE
/s/ Ziad Ghanem /s/ Lynn Gefen

By: Ziad Ghanem Lynn Gefen, Esq.

Title: President and Chief Executive Officer

Date: 11/3/2025 Date:10/31/2025

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## Exhibit 21.1

**Exhibit 21.1**

**List of Subsidiaries of TerrAscend Corp.**

---

| | |
|:---|:---|
| &nbsp;&nbsp;**Subsidiary** | &nbsp;&nbsp;**State or Other Jurisdiction of Incorporation or Organization** |
| &nbsp;&nbsp;TerrAscend Canada Inc. | &nbsp;&nbsp;Ontario |
| &nbsp;&nbsp;2627685 Ontario Inc. | &nbsp;&nbsp;Ontario |
| &nbsp;&nbsp;2671983 Ontario Inc. | &nbsp;&nbsp;Ontario |
| &nbsp;&nbsp;2765533 Ontario Inc. | &nbsp;&nbsp;Ontario |
| &nbsp;&nbsp;2668420 Ontario Inc. | &nbsp;&nbsp;Ontario |
| &nbsp;&nbsp;2151924 Alberta Ltd. | &nbsp;&nbsp;Alberta |
| &nbsp;&nbsp;TerrAscend Growth Corp.  | &nbsp;&nbsp;Ontario |
| &nbsp;&nbsp;Cookies Retail Canada Corp. | &nbsp;&nbsp;Canada |
| &nbsp;&nbsp;BTHHM Berkeley, LLC | &nbsp;&nbsp;California |
| &nbsp;&nbsp;V Products, LLC | &nbsp;&nbsp;California |
| &nbsp;&nbsp;ABI SF LLC | &nbsp;&nbsp;California  |
| &nbsp;&nbsp;RHMT, LLC | &nbsp;&nbsp;California  |
| &nbsp;&nbsp;Deep Thought LLC | &nbsp;&nbsp;California  |
| &nbsp;&nbsp;Howard Street Partners, LLC | &nbsp;&nbsp;California  |
| &nbsp;&nbsp;TerrAscend USA, Inc. | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;TerrAscend America, Inc. | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;Arise Bioscience, Inc. | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;WDB Holding PA, Inc. | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;WDB Holding CA, Inc. | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;WDB Holding MI, Inc. | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;WDB Holding OH, Inc. | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;Well and Good, Inc. | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;HMS Hagerstown, LLC | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;IHC Management LLC | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;PA Store 299 LLC | &nbsp;&nbsp;Delaware  |
| &nbsp;&nbsp;TerrAscend USA Services, LLC | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;Well and Good 2, Inc. | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;WDB Holding GA Inc. | &nbsp;&nbsp;Georgia |
| &nbsp;&nbsp;Aspire Medical Partners, LLC | &nbsp;&nbsp;Georgia |
| &nbsp;&nbsp;TER Holding MD, Inc. | &nbsp;&nbsp;Maryland |
| &nbsp;&nbsp;Derby1, LLC | &nbsp;&nbsp;Maryland |
| &nbsp;&nbsp;Hempaid, LLC | &nbsp;&nbsp;Maryland |
| &nbsp;&nbsp;Blue Ridge Wellness, LLC | &nbsp;&nbsp;Maryland |
| &nbsp;&nbsp;Herbiculture, Inc. | &nbsp;&nbsp;Maryland |
| &nbsp;&nbsp;WDB Holding MD, Inc. | &nbsp;&nbsp;Maryland |
| &nbsp;&nbsp;HMS Health, LLC | &nbsp;&nbsp;Maryland |
| &nbsp;&nbsp;HMS Processing LLC | &nbsp;&nbsp;Maryland |
| &nbsp;&nbsp;Moose Curve Holdings, LLC | &nbsp;&nbsp;Maryland |
| &nbsp;&nbsp;Allegany Medical Marijuana Dispensary LLC | &nbsp;&nbsp;Maryland |
| &nbsp;&nbsp;Allegany CBD Wellness Shop Incorporated | &nbsp;&nbsp;Maryland |
| &nbsp;&nbsp;AEY Capital LLC | &nbsp;&nbsp;Michigan |
| &nbsp;&nbsp;3 State Park LLC | &nbsp;&nbsp;Michigan |
| &nbsp;&nbsp;Pure Releaf SP Drive, LLC | &nbsp;&nbsp;Michigan |
| &nbsp;&nbsp;KISA Enterprises MI Inc. | &nbsp;&nbsp;Michigan |
| &nbsp;&nbsp;RKD Ventures, LLC | &nbsp;&nbsp;Michigan |
| &nbsp;&nbsp;AEY Holdings, LLC | &nbsp;&nbsp;Michigan |
| &nbsp;&nbsp;Stadium Ventures Inc. | &nbsp;&nbsp;Michigan |
| &nbsp;&nbsp;Thrive Enterprises LLC | &nbsp;&nbsp;Michigan |
| &nbsp;&nbsp;Spartan Partners Corporation | &nbsp;&nbsp;Michigan |
| &nbsp;&nbsp;Spartan Partners Holdings, LLC | &nbsp;&nbsp;Michigan |
| &nbsp;&nbsp;Spartan Partners Services LLC | &nbsp;&nbsp;Michigan |

---

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| | |
|:---|:---|
| &nbsp;&nbsp;**Subsidiary** | &nbsp;&nbsp;**State or Other Jurisdiction of Incorporation or Organization** |
| &nbsp;&nbsp;Spartan Partners Properties LLC | &nbsp;&nbsp;Michigan |
| &nbsp;&nbsp;Spartan Partners Licensing LLC | &nbsp;&nbsp;Michigan |
| &nbsp;&nbsp;Mayde US LLC | &nbsp;&nbsp;Michigan |
| &nbsp;&nbsp;TerrAscend NJ LLC | &nbsp;&nbsp;New Jersey |
| &nbsp;&nbsp;TER NJ Dispensing 1, LLC | &nbsp;&nbsp;New Jersey |
| &nbsp;&nbsp;Apothecarium Dispensing LLC | &nbsp;&nbsp;New Jersey  |
| &nbsp;&nbsp;Ohio Dispensing 1, LLC | &nbsp;&nbsp;Ohio |
| &nbsp;&nbsp;Ilera Healthcare LLC | &nbsp;&nbsp;Pennsylvania |
| &nbsp;&nbsp;Ilera Dispensing LLC | &nbsp;&nbsp;Pennsylvania |
| &nbsp;&nbsp;Ilera Security LLC | &nbsp;&nbsp;Pennsylvania |
| &nbsp;&nbsp;235 Main Street Mercersburg LLC | &nbsp;&nbsp;Pennsylvania |
| &nbsp;&nbsp;Ilera InvestCo I, LLC | &nbsp;&nbsp;Pennsylvania |
| &nbsp;&nbsp;Ilera Dispensing 2 LLC | &nbsp;&nbsp;Pennsylvania |
| &nbsp;&nbsp;Ilera Dispensing 3 LLC | &nbsp;&nbsp;Pennsylvania |
| &nbsp;&nbsp;GuadCo LLC | &nbsp;&nbsp;Pennsylvania |
| &nbsp;&nbsp;KCR Holdings LLC | &nbsp;&nbsp;Pennsylvania |
| &nbsp;&nbsp;TER Dispensing PA 1, LLC | &nbsp;&nbsp;Pennsylvania |

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## Exhibit 23.1

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We consent to the incorporation by reference in the Registration Statement No. 333-278510 on Form S-3, the Registration Statement No. 333-291672 on Form S-8, and the Registration Statement No. 333-262566 on Form S-8, of our auditor's report dated March 12, 2026 with respect to the consolidated financial statements of TerrAscend Corp. (and its subsidiaries) as of December 31, 2025 and 2024 and for each of the years in the three-year period ended December 31, 2025, 2024 and 2023, as included in the Annual Report on Form 10-K of TerrAscend Corp. for the year ended December 31, 2025, as filed with the United States Securities and Exchange Commission.

/s/ MNP LLP

Chartered Professional Accountants

Licensed Public Accountants

March 12, 2026

Toronto, Canada

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## Exhibit 31.1

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**Exhibit 31.1**

**Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a)**

**as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Ziad Ghanem, certify that:

1. I have reviewed this Annual Report on Form 10-K of TerrAscend Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report), that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: March 12, 2026 |  |
|  | /s/ Ziad Ghanem |
|  | Ziad Ghanem |
|  | President and Chief Executive Officer |
|  | (Principal Executive Officer) |

---

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## Exhibit 31.2

------

**Exhibit 31.2**

**Certification of Principal Financial Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a)**

**as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Ziad Ghanem, certify that:

1. I have reviewed this Annual Report on Form 10-K of TerrAscend Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report), that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| <br>Date: March 12, 2026 |  |
|  | /s/ Ziad Ghanem |
|  | Ziad Ghanem |
|  | President and Chief Executive Officer |
|  | (Principal Financial Officer) |

---

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## Exhibit 32.1

------

**Exhibit 32.1**

**Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted**

**Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Ziad Ghanem, President and Chief Executive Officer of TerrAscend Corp. (the "Company"), hereby certify, that, to the best of my knowledge:

1. the Annual Report on Form 10-K for the year ended December 31, 2025, to which this Certification is attached as Exhibit 32.1 (the "Report") of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| <br>Date: March 12, 2026<br>|  |
|  | /s/ Ziad Ghanem |
|  | Ziad Ghanem |
|  | President and Chief Executive Officer |
|  | (Principal Executive Officer) |

---

This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of TerrAscend Corp. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.

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## Exhibit 32.2

------

**Exhibit 32.2**

**Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted**

**Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Ziad Ghanem, President and Chief Executive Officer of TerrAscend Corp. (the "Company"), hereby certify, that, to the best of my knowledge:

1. the Annual Report on Form 10-K for the year ended December 31, 2025, to which this Certification is attached as Exhibit 32.2 (the "Report") of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| <br>Date: March 12, 2026<br>|  |
|  | /s/ Ziad Ghanem |
|  | Ziad Ghanem |
|  | President and Chief Executive Officer |
|  | (Principal Financial Officer) |

---

This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of TerrAscend Corp. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.

------