Ayr Wellness Inc. (OTC: AYRWF) is 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. Ayr said that the acquisition will add significant cultivation capacity to its Nevada operations and provide the Company with expanded access to high-quality premium flower for its operations throughout the state.
“The Tahoe Hydro acquisition perfectly encapsulates Ayr’s strategy,” said Jonathan Sandelman, CEO of Ayr. “We seek to be the largest scale cultivator of high-quality cannabis in every market where we operate. Tahoe Hydro has demonstrated time and time again its ability to produce flower that meets the exacting standards of quality that Ayr sets throughout its organization. We could not be more excited to bring their talented team of cultivators into our organization and add their impressive flower to our Nevada wholesale and retail offerings.”
Ayr said in a statement that the acquisition will add significant cultivation talent to its cultivation team, including 75 employees, which the company said it plans to deploy both within Nevada and nationally. Based on current projections, Ayr said it estimates it is paying approximately 4.5x Tahoe Hydro/NV Green’s combined 2021 Adjusted EBITDA. The acquisition of Tahoe Hydro and NV Green adds two cultivation licenses, one production license, and one distribution license to Ayr’s Nevada footprint.
Last week, Ayr Wellness said that the Massachusetts Cannabis Control Commission had granted its local partner Sira Naturals with provisional licenses for the sale of adult-use cannabis at its Somerville and Watertown locations in Greater Boston and a provisional license for cultivation and production for its M3 cultivation facility, located in Milford, Massachusetts. Sandelman said, “The Greater Boston Area has been drastically underserved in access to adult-use cannabis. The granting of our provisional adult-use licenses in Somerville and Watertown are a big step towards remedying that. Additionally, the buildout of our new cultivation facility in Milford is proceeding as planned. As we often state, our goal is to be the largest scale cultivator of high-quality cannabis in each and every market where we operate. The new facility will go a long way in helping us to achieve that goal and further our leading wholesale presence within the state.”