Ayr Wellness' Early Bets on Emerging Markets Pay Off

The new business strategies will look to stave off cash burn in the coming quarters.

Expansion efforts and key market partnerships are starting to pay off for Ayr Wellness Inc. (CSE: AYR.A) (OTCQX: AYRWF) after new earnings show the Florida-based multistate operator’s new business strategies added meat to its balance sheet.

Ayr Wellness reported financial results for the fourth quarter and full year ending December 31, 2022.

The company generated $124.6 million in revenue in the fourth quarter. Still, the company reported a net loss of $166.4 million for the quarter.

A large portion of the quarter’s net loss came when the company incurred a non-cash goodwill impairment charge of $149 million. Ayr said it was based on the current market conditions, including the impact of price compression.

The company delivered revenue of $465.6 million for the full year 2022 and a loss of $245.5 million for the full year.

“In the past few months, our team has begun the process of evaluating every aspect of our business with fresh eyes, conducting a thorough review of our markets, our people, and our processes, all in service seeking to maximize the financial health of our company and better position Ayr as a retailer of choice and house of brands,” newly-minted CEO and president David Goubert said in a statement.

The company had a cash balance of $80.6 million at the end of 2022. The new business strategies will look to stave off cash burn in the coming quarters.


The company grew its adjusted EBITDA by 20% sequentially and achieved a second consecutive quarter of positive cash flow from operations.

An EBITDA margin of 10% or more is typically considered good, as S&P 500-listed companies generally have higher EBITDA margins between 11% and 14%.

Ayr opened new Liberty Health Sciences dispensaries in Florida — two in the fourth quarter and two more in the first quarter of 2023 — bringing the total number to 55. The company acquired the vertical chain in 2019 and said it plans on rebranding all of the locations to Ayr stores by summertime.

The company moved to offload its Arizona assets and two Chicago storefronts during the quarter, deciding instead to snap up two Ohio dispensary licenses, which it entered into an option to acquire.

Overall in 2022, Ayr added 14 dispensaries out of a total of 80 across eight states, launched adult-use retail sales in Massachusetts and New Jersey, and completed several key acquisitions and financing transactions.

Their three retail locations in New Jersey, previously known as Garden State Dispensary, are now functioning under the Ayr brand.

It also obtained a provisional cultivation license in Connecticut through a social equity joint venture partner that will grant Ayr two retail licenses in the state.

All combined, the expansion efforts and acquisitions are expected to significantly expand the company’s presence in the Northeast region of the United States.

In an effort to improve its brand and products, the company has made several updates, introducing live resin concentrates and vapes in Florida and Nevada, and expanded Levia water-soluble tinctures for their Florida retail menus.

“Throughout that process, we have implemented cost-saving measures, stepped back from certain markets that didn’t align with our core business goals, and invested further into markets and activities that did meet those goals,” Goubert said.

“By better prioritizing our time, our attention, and our capital, we find ourselves better positioned to capture growth opportunities in our existing and future footprint, which we anticipate will help us grow our cash flow profile, our revenue, and adjusted EBITDA margins consistently throughout 2023.”

Looking ahead, Ayr said that it expects its financial results in the first quarter of 2023 to be consistent with industry trends, expecting revenue and adjusted EBITDA in Q1 2023 to be in line with the fourth quarter of 2022. Ayr said it expects to further ramp revenue, adjusted EBITDA and operating cash flow thereafter.

Adam Jackson

Adam Jackson writes about the cannabis industry for the Green Market Report. He previously covered the Missouri Statehouse for the Columbia Missourian and has written for the Missouri Independent. He most recently covered retail, restaurants and other consumer companies for Bloomberg Business News. You can find him on Twitter at @adam_sjackson and email him at adam.jackson@crain.com.

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