| Upon completion of the Transaction, the combined business will have operations in 5 states and Canada, including 7 cultivation and processing facilities and 23 operating dispensaries serving both medical and adult-use cannabis markets in the U.S. and Canada. Management Commentary 
(Jason Wild, Executive Chairman of TerrAscend)“The acquisition of Gage expands our footprint to the third largest cannabis market in the U.S.,” said Jason Wild, Executive Chairman of TerrAscend. “Combining our market-leading share in our existing states with Gage’s proven cultivation, retail, and marketing capabilities, creates one of the largest and most dynamic companies in the industry. We look forward to leveraging Gage’s profound connection with Michigan’s consumers, in addition to its established partnerships with award-winning brands like COOKIES, to provide our patients and customers with best-in-class product offerings and retail experiences.” 
(CEO Fabian Monaco of Gage)“Our shared strategic and corporate values make this combination a strong fit,” said Fabian Monaco, CEO of Gage. “We also recognize the incredible success that TerrAscend has enjoyed in recent years. We could think of no better company to partner with as we execute on our shared strategy of deep vertical integration and scale in our core markets, with a vision of creating the most consumer-centric cannabis company in the world.” Key Transaction Highlights and Benefits (According to the Management) If consummated, the Transaction is anticipated to result in the following benefits: - Leadership in a Top 3 Market: Gage has established itself as a leader in the Michigan market, which is the third largest cannabis market in the U.S.2 with reported cannabis sales of $171 million in the month of July 2021, representing an annualized market size of approximately $2.1 billion2.
- Premium Brands: The Transaction will provide access to Gage’s sought-after brand and proprietary library of genetics as well as Gage’s exclusive licensing partnerships in Michigan with COOKIES, SLANG Worldwide, Blue River, Pure Beauty, and Khalifa Kush.
- Efficient Operating Model: The combined company will operate 7 cultivation facilities, including 3 cultivation facilities in Michigan, in addition to Gage’s 9 contract grow agreements.
- Expanding Retail Footprint: The combined company will operate a retail network expected to reach 34 stores over the coming months. This includes 23 currently open dispensaries across 5 states with Gage operating 10 dispensaries in Michigan in addition to TerrAscend’s 13 store footprint in key markets including California, New Jersey and Pennsylvania. TerrAscend is expected to open its 14th dispensary in the fourth quarter in Lodi, New Jersey and Gage is expected to open 10 additional dispensaries across Michigan in the coming months.
- A Leader in Experiential Retail: Gage’s award-winning retail stores generate industry leading retail metrics, including strong average basket size ($152 in the second quarter of 2021 compared to Michigan average of $853) and premium pricing for its flower products (40%+ relative to the Michigan market average price2). TerrAscend expects to leverage Gage’s portfolio of over 40+ proprietary flower strains in addition to brand and marketing capabilities, at retail locations in other states.
- Expert Operating Teams: The Transaction combines management teams with similar core philosophies, strong track records of execution and operational expertise in building leading businesses in the most competitive cannabis markets in the country.Balance Sheet Strength: Gage’s $32.8 million cash position with minimal debt as of June 30, 2021, combined with TerrAscend’s strong balance sheet, positions the combined company to execute on its growth plans.
If the Transaction is completed, the Gage Shares will be delisted from the CSE. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This news release contains “forward-looking information” within the meaning of applicable securities laws. Forward-looking information contained in this press release may be identified by the use of words such as, “may”, “would”, “could”, “will”, “likely”, “expect”, “anticipate”, “believe, “intend”, “plan”, “forecast”, “project”, “estimate”, “outlook” and other similar expressions. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors relevant in the circumstances, including assumptions in respect of current and future market conditions, the current and future regulatory environment, and the availability of licenses, approvals and permits. Forward-looking statements in this news release include, but are not limited to: statements with respect to the anticipated completion of the Transaction and the timing for its completion; the timing for the holding of the TerrAscend Meeting and the Gage Meeting; the satisfaction of closing conditions which include, without limitation (i) required Gage and TerrAscend shareholder approvals, (ii) certain termination rights available to the parties under the Arrangement Agreement, (iii) obtaining the necessary approvals from the CSE for the listing of TerrAscend’s common shares in connection with the Transaction, and (iv) other approvals and closing conditions contained in the Arrangement Agreement; statements with respect to the anticipated effects of the Transaction on TerrAscend and its strategy going forward and statements with respect to the anticipated benefits associated with the acquisition of Gage. Actual results and developments may differ materially from those contemplated by these statements. Such forward-looking statements are based on certain assumptions regarding TerrAscend and Gage, including the successful completion of the Transaction, anticipated benefits from the Transaction, and expected growth, results of operations, performance, industry trends and growth opportunities. While TerrAscend and Gage consider these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. Among other things, there can be no assurance that the Transaction will be completed or that the anticipated benefits from the Transaction will be achieved. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking information is subject to a variety of risks and uncertainties that could cause actual events or results to differ materially from those projected in the forward-looking information. 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; with respect to TerrAscend and the risk factors set out in TerrAscend’s most recently filed MD&A, filed with the Canadian securities regulators and available under TerrAscend’s profile on SEDAR at www.sedar.com, and with respect to Gage, the risk factors set out in Gage’s most recently filed MD&A, filed with the Canadian securities regulators and available under Gage’s profile on SEDAR at www.sedar.com. The statements in this press release are made as of the date of this release. TerrAscend and Gage disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws. The CSE accepts no responsibility for the adequacy or accuracy of this release. Cautionary Note Regarding Cannabis Operations in the United States Investors should note that there are significant legal restrictions and regulations that govern the cannabis industry in the United States. Cannabis remains a Schedule I drug under the US Controlled Substances Act, making it illegal under federal law in the United States to, among other things, cultivate, distribute or possess cannabis in the United States. 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 US federal money laundering legislation. While the approach to enforcement of such laws by the federal government in the United States has trended toward non-enforcement against individuals and businesses that comply with medical or adult-use cannabis programs in states where such programs are legal, strict compliance with state laws with respect to cannabis will neither absolve TerrAscend or Gage of liability under U.S. federal law, nor will it provide a defense to any federal proceeding which may be brought against TerrAscend or Gage. The enforcement of federal laws in the United States is a significant risk to the respective business of TerrAscend and Gage and any proceedings brought against TerrAscend or Gage thereunder may adversely affect their respective operations and financial performance. Third Party Information This press release includes market and industry data that has been obtained from third party sources, including industry publications. Each of TerrAscend and Gage believes that the industry data is accurate and that its estimates and assumptions are reasonable, but there is no assurance as to the accuracy or completeness of this data. Third party sources generally state that the information contained therein has been obtained from sources believed to be reliable, but there is no assurance as to the accuracy or completeness of included information. Although the data is believed to be reliable, neither TerrAscend nor Gage has independently verified any of the data from third party sources referred to in this press release or ascertained the underlying economic assumptions relied upon by such sources. (This information is primarily sourced from Terrascend. Highly Capitalized has neither approved nor disapproved the contents of this news release. Read our Disclaimer here). | 
