Ayr Wellness Inc. (CSE: AYR.A)(OTCQX: AYRWF) is killing its plan to buy Chicago-based Gentle Ventures also known as Dispensary 33. According to the company statement, Ayr will no longer be required to pay the previously announced purchase consideration of $55 million upfront, including $12 million of cash, $3 million of seller notes, and $40 million of stock.
“The cannabis market has changed significantly in the 15 months since we agreed to acquire Dispensary 33. Both parties have acknowledged this reality and engaged in good faith dialogue as we came to the mutual decision to terminate the proposed arrangement,” said David Goubert, President at Ayr. “We are focused on optimizing our business and will prioritize our efforts in markets where we can build meaningful depth and drive strong revenue and cash flow in the near term. Additional plans for optimization include implementation of operating efficiencies, lowering costs across our business, and reorienting our investments into the markets, segments and activities that are most impactful for our growth and profitability.”
The company hasn’t slowed its expansion. It recently opened two new retail locations in Florida: Tarpon Springs and Orlando. Both stores feature the AYR retail design concept and operate under the Liberty Health Sciences banner. The new stores offer many of Ayr’s national brands and products and feature a “bud bar,” providing customers with a sensory experience showcasing samples of whole flower strains currently available for purchase.
In New Jersey, its three retail locations, formerly known as Garden State Dispensary, are now operating under the AYR dispensary name. Since acquiring Garden State Dispensary in September 2021, Ayr said it has made significant progress in elevating key facets of the business, including improvements to the menu and overall retail experience. In 2022 the company opened a large-scale cultivation expansion, launched adult-use sales at its three retail locations, the maximum allowed in the state, and introduced its national brand portfolio in the wholesale market and its retail stores.
Ayr Wellness reported its third-quarter earnings in November revenue rose 24% to $119 million over last year’s revenue of $96 million and an increase of 8.6% sequentially. The operating loss grew to $20.7 million over last year’s loss of $8.9 million. It improved by 17% over the second quarter. The company had a comfortable cash cushion of $100 million.