Ayr Buys Illinois’ Herbal Dispensaries For $30 Million

Ayr Wellness Inc. (OTCQX: AYRWF) is staying busy this week with acquisitions as the company adds an Illinois operation called Herbal Remedies Dispensaries, LLC for approximately $30 million. Herbal is an operator of two licensed retail dispensaries in Illinois. The deal is expected to close in the fourth quarter of 2021. The transaction includes $10 million in stock, $12 million in seller notes, and $8 million in cash. Based on current projections, Ayr said it believes it is paying approximately 5x Herbal Remedies’ 2021 EBITDA. Herbal will add roughly 50 employees to Ayr’s total headcount.

“Today’s announcement represents the next step in our goal to position Ayr as a leading MSO, with a strong presence in states that deliver meaningful revenue. Illinois will become the eighth state in our expanding footprint, which now reaches close to 85 million people. The total cannabis market in Illinois is already run-rating at $1.8 billion in annual sales, despite adult-use launching only 18 months ago. The team at Herbal Remedies has done a tremendous job in Quincy, building a fantastic business and a strong reputation for excellent customer service and merchandising – exactly what we at Ayr Wellness look for in a partner when entering a new market. We look forward to working with the Herbal team as we continue to build our presence in the Illinois market,” said Jonathan Sandelman, Chairman and Chief Executive Officer of Ayr Wellness.

Herbal Remedies was among the first cannabis dispensaries licensed in the State of Illinois when the State approved the Compassionate Use of Medical Cannabis Program in 2013. Both medical and recreational use is now permitted.

Viridian Capital Advisors analyst Jonathan deCourcey said in a report, “We believe the retail assets will be just the beginning of Illinois expansion and expect the company will seek out cultivation and production assets in the near term both to support retail operations and to leverage AYR’s expertise as a top wholesale supplier in under-developed markets. Illinois remains one of the top growth states in US cannabis and a market that remains very much in play for a well-run operator (or operators), like AYR, to disrupt and establish a long-term sustainable leadership position.” He rates the company a buy and has a $42 price target. He added, “By the end of this year, AYR will have a presence in Arizona, Florida, Illinois, Massachusetts, Nevada, New Jersey, Pennsylvania, and Ohio. Each represents a high growth market with favorable dynamics for operators. We continue to expect AYR to quickly develop a formidable business in each new state while building upon its leadership position in Massachusetts and Nevada. Even before considering Illinois expansion, we viewed AYR’s 2022 target results of at least $725M in revenues and $325M in adjusted EBITDA as being very much attainable giving the company one of the largest projected scales of operation in the industry.”

Nevada Acquisition

On Monday, Ayr announced it was buying Nevada-based Tahoe Hydroponics Company, LLC in a deal valued at $17 million. It is a cash and stock deal that will consist of $5 million in cash, $3.5 million in debt, and approximately $8.5 million in stock.

Tahoe Hydro operates roughly 33,000 square feet of total cultivation and manufacturing space in its facilities in Carson City, Nevada, and Sparks, Nevada. The company grows flower and produces concentrates for some of the state’s top-selling brands, including Tahoe Hydro and LIT (Lost in Translation), top-sellers, and local favorites throughout the state, according to BDSA, and is a Nevada flower supplier for the well-known Cookies brand.

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the latest cannabis news delivered right to your inbox

The Morning Rise

Unpack the industry with the daily cannabis newsletter for business leaders.

 Sign up

About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


Recent Tweets

Get the latest cannabis news delivered right to your inbox

The Morning Rise

Unpack the industry with the daily cannabis newsletter for business leaders.