Ayr Wellness Archives - Green Market Report

StaffSeptember 1, 2021
Pennsylvania.jpg?fit=960%2C640&ssl=1

3min6800

Ayr Wellness Inc. (OTCQX: AYRWF) is buying Pennsylvania-based PA Natural Medicine, LLC, which operates three licensed retail dispensaries in the Commonwealth of Pennsylvania. The deal is valued at $80 million but could see an extra $40 million if milestones are met. The deal is expected to close in the fourth quarter and Ayr said that it expects to rebrand the stores once the transaction is complete.

“Our goal across our footprint is to develop scale and meaningful presence in each of our markets. Today’s announcement builds on our already strong position in Pennsylvania, where we have built a tremendous foundation since entering the state just a few months ago. Our three Ayr Wellness stores, open an average of less than six months, are run-rating at over $7 million in annualized revenue per dispensary and our cultivation facilities are producing some of the best reviewed flower in the state,” said Jonathan Sandelman, Ayr Wellness Founder, Chairman and CEO.

PA Naturals has locations in the college towns of Bloomsburg and State College, as well as Selinsgrove, PA, and operates under the retail banner “Nature’s Medicine”. The terms of the transaction include upfront consideration of $80 million, made up of $20 million in stock, $25 million in seller notes, and $35 million in cash. An earn-out of up to $40 million, based on 2021 EBITDA hurdles, is payable in Q1 2022 and includes a maximum additional cash payment of $10 million with the remainder paid in stock and notes.

In 2018, PA Natural Medicine was described as a partnership between Nature’s Medicine, a medical marijuana company based in Arizona, and two Pennsylvania businessmen, Tony DePaul and Austin Meehan. As of June 3, the Pennsylvania Department of Health reported that 548,468 patients were registered with 349,272 active certifications.

“With such great momentum in this market, we are expanding our retail presence with the acquisition of PA Naturals, a three-store operation in central Pennsylvania with some of the best operating metrics in the state and a complementary footprint to our existing six licenses. We look forward to welcoming the great people of PA Naturals to the Ayr team,” he concluded.

Ayr Wellness said in August that it expects revenues to be approximately $800 million in 2022 and adjustedEBITDA at $300 million. The revenue estimate increased from $725 million to reflect contributions from recent acquisitions and additional expansion (including into Illinois). No doubt with this additional acquisition, the numbers could rise again.


Debra BorchardtAugust 17, 2021
Ayr2.jpg?fit=960%2C502&ssl=1

5min9010

Following the close of the market on Monday,  Ayr Wellness Inc. (OTCQX: AYRWF) reported financial results for the three months ending June 30, 2021, with revenue rising 222% to $91.3 million. This was a 56% increase sequentially. Ayr is raising its revenue guidance for 2022 revenue to $800 million, up from $725 million, and is reiterating guidance for 2022 Adjusted EBITDA of $300 million reflecting substantial investments in growth.

Ayr’s net losses increased to $24.9 million over last year’s $5.4 million and the first-quarter net loss of $8.4 million. The company attributed the increase in losses to non-cash, one-time expenses, and non-operating adjustments totaling $52.3 million.

CEO Jonathan Sandelman said, “In the last 12 months we’ve laid out an ambitious plan for growth – growing our footprint and building our brands on the foundation of being the largest scale producer of high-quality flower in the country. Because everything starts with the plant. I am incredibly pleased to see those plans becoming reality, with Q2’s exceptional 222% year-over-year growth in revenue and 56% growth over last quarter.  Today our brands are in over 280 stores, up 3 times year-over-year, and they aren’t slowing down. We’re seeing increased demand for our products and accelerating growth in our wholesale business.”

Outlook

Ayr Wellness said that based on the results to date, management is targeting the third quarter revenue to be approximately $100 million, which would reflect the growth of over 10% quarter-over-quarter and 211% year-over-year. Adjusted EBITDA on a US GAAP basis is expected to be in line with the second quarter, following accelerated investments in branding, new markets, and growth projects.

“As we double down on our success, we have the opportunity to continue to grow our top line at 100%+ rates year-over-year. We are raising our 2022 revenue target to $800 million, and we are reinvesting in our business to accelerate that growth,” concluded Mr. Sandelman.

The company outlined the following plans in the pipeline:

  • Three additional Pennsylvania dispensaries are scheduled to open later this year, bringing the total to six
  • Provisional licenses were received for three Adult Use Dispensaries in Greater Boston
  • Construction is underway on a 100,000 ft2 new cultivation and production facility in Milford, MA that is expected to add 75,000 ft2 of the new canopy to bring Ayr to the maximum capacity allowed under its Massachusetts license
  • In Florida, an additional three stores are expected to open by the end of the third quarter and the company has sited an additional eight new locations, bringing its year-end Florida dispensary target to 50

Acquisitions

The company has been on a spending spree and outlined the following recent acquisitions:

  • This week the company announced the proposed acquisition of Cultivauna, LLC, the owner of Levia, a top-selling brand of cannabis-infused seltzers
  • It announced the proposed acquisition of Herbal Remedies, adding two dispensaries in Illinois; won an additional retail license in Bloomington-Normal, Illinois with a partner, Land of Lincoln
  • It announced the proposed acquisition of Tahoe Hydroponics Company, an award-winning cultivator and one of Nevada’s top producers of high-quality flower

Viridian Capital Advisors wrote, “As we have previously mentioned, once all transactions (including outstanding transactions in Illinois and New Jersey) are completed AYR will have one of the most sizable footprints in US cannabis to go along with its proven execution capabilities. We continue to expect execution on the build-out of assets will translate to outperforming stock returns and valuation expansion for investors. Our rating remains Buy and our price target $42.”


StaffAugust 16, 2021
Levia-scaled.jpg?fit=1200%2C300&ssl=1

3min9000

Ayr Wellness Inc. (OTC: AYRWF) is buying cannabis beverage company Cultivauna, LLC, the owner of Levia branded cannabis-infused seltzers in a deal valued at potentially $40 million. The acquisition is expected to close by the end of 2021.

Levia Cannabis-Infused Seltzers is currently available in Massachusetts. The products allow for rapid onset of the effects of THC, typically 15-20 minutes, allowing for a more consistent consumption experience than many edible products. Stifel Research recently completed a survey among cannabis consumers and learned that many new customers were trying edibles and beverages as a discreet way to try the product. Female consumers were 11% more likely to purchase a cannabis beverage said another recent study.

“Ayr wants something exciting to offer every cannabis consumer of today and the future cannabis customer of tomorrow. Infused beverages, done right, will be game-changing to the mainstreaming of cannabis in the U.S., providing an approachable and sessionable form factor to new and existing customers. The acquisition of Levia brings Ayr into this rapidly growing segment with delicious, market-leading infused seltzer. We are excited to have Levia join Kynd premium flower and Origyn extracts in Ayr’s suite of premier national brands,” said Jonathan Sandelman, CEO of Ayr Wellness.

Levia is currently available in Massachusetts in three experiences and flavors

  • “Achieve” Raspberry Lime (Sativa)
  • “Celebrate” Lemon Lime (Hybrid)
  • “Dream” Jam Berry (Indica)

“With a formula that provides consistently great flavor and zero calories in an infused beverage experience, we believe Levia has enormous potential as an alcohol alternative. In just six months since its initial launch in Massachusetts, Levia has become the top selling THC beverage. As we finalize our updated national brand portfolio to address all segments and form factors, Levia will play a marquee role in each market where we operate,” Mr. Sandelman concluded.

Terms of the Deal

The terms of the transaction include $20 million in upfront consideration, made up of up to $10 million in cash with the remainder in stock. An earn-out payment of up to an additional $40 million will be paid in shares based on the achievement of revenue targets in 2022 and 2023.

 


StaffJuly 20, 2021
Ayr2.jpg?fit=960%2C502&ssl=1

5min10160

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.


StaffJuly 19, 2021
Tahoe-Hydro-Logo.png?fit=400%2C400&ssl=1

4min12160

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.

Massachusetts

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.”

 

 

 


Debra BorchardtJuly 8, 2021
Ayr2.jpg?fit=960%2C502&ssl=1

5min20133

Ayr Wellness Inc. (OTC: AYRWF) hasn’t been around that long but has quickly proven itself to be a contender. Ayr Wellness just announced its 37th dispensary opening in Florida under the Liberty Health Sciences umbrella in Key West. The 1,500 sq. ft. location sits on the main strip of Downtown Key West. The dispensary features a selection of flower products, in addition to the company’s newly launched Origyn concentrates and Big Pete’s Cookies.

Jonathan Sandelman, CEO of Ayr, said, “We are continuing to execute on our Florida plan, opening dispensaries in prime locations while continually enhancing our cultivation efforts to make us the highest quality cultivator at scale in the state. Our updated product offerings, including a diversified strain selection and launch of Origyn Extracts and Big Pete’s Cookies, have already contributed to an improved customer experience, and the results are beginning to show.”

Viridian analyst Jonathan DeCourcey recently named Ayr Wellness his top MSO (multi-state operator) pick, giving the company a $42 target price. Ayr Wellness was lately selling at $28. AYR management has said it believes its revenues can hit $725 million in 2022 and DeCourcey thinks that could actually be a conservative number.

DeCourcey believes the company is “poised for a sizable second-half ramp in results and more importantly transformational growth in 2022 and beyond.” This is a big compliment considering the company has fought its way through the tough markets of Massachusetts and Nevada. The slow roll of the Massachusetts adult-use market crashed headlong into the pandemic lockdowns. While other states allowed the sale of adult-use cannabis to continue, Massachusetts declared only medical marijuana could be sold during those trying times. This setback along with licensing delays wreaked havoc on the business plans of many companies in the state.

“Massachusetts will be an outperforming growth market for Ayr,” wrote DeCourcey. “Given the Back Bay location, we expect the dispensary to quickly become one of the most productive in the state. Overall, we expect Ayr’s Massachusetts revenues to grow from roughly $57 million last year to $102 million in 2021 and $ 131 million in 2022.”

Nevada also faced the complete shutdown of tourism for months and Ayr’s exposure to the state looked risky. Now, however, this state is roaring back to life.

Acquisitions

One thing DeCourcey likes about Ayr is its acquisitions into high-growth states. The company has planted its flag in Arizona, Florida, Pennsylvania, Ohio, and New Jersey. He wrote, “In each expansion market, Ayr is building out assets both in terms of cultivation capacity and retail footprint. We expect AYR will quickly gain a leading share within each new state in the near term given the company’s track record of integrating assets and executing profitable operations amidst challenging conditions.” Beyond these moves, the company is still positioned to add more. It has approximately $210 million in cash following the four closed acquisitions and will need to spend $41 million to complete New Jersey. The company has said it plans to spend $127 million on its next round of acquisitions. The analyst suggested Connecticut of New York as possible states for expansion. Although he did suggest that the midwest region would be the most likely place for a near-term move especially on the wholesale side.

In Closing

The analyst thinks that the company’s many acquisitions had the unfortunate timing to coincide with the recent bear market in cannabis stocks. He thinks the valuation is unfairly discounted despite the company’s execution. He noted that New Jersey’s numbers haven’t even been factored into his own model. “We believe the valuation discount is unwarranted, making Ayr one of the top investment opportunities in cannabis and our top pick amongst MSO’s.”

 


Debra BorchardtMay 26, 2021
Ayr2.jpg?fit=960%2C502&ssl=1

4min12510

 Ayr Wellness Inc. (OTCQX: AYRWF) reported its financial results for the three months ended March 31, 2021, with revenue rising 74% to $58.4 million. Ayr trimmed its net losses slightly to $8.4 million from last year’s $8.6 million for the same time period.

“Q1 2021 represents the early innings of our 2021 strategic transformation, as we successfully closed on our announced acquisitions as scheduled, starting with the February 25 th closing of our acquisition of Liberty Health Sciences, adding the fourth largest retail footprint in Florida,” said Jonathan Sandelman, CEO of Ayr Wellness. “We then closed on our Arizona acquisition at the end of March, adding three dispensaries and a large cultivation expansion in the latest adult-use market to ramp-up in the West. Then we quickly followed that by closing our acquisitions in Ohio, and harvesting our first flower in Pennsylvania, which hit the shelves in our stores earlier this month.   We also opened our sixth store in Nevada, the closest dispensary to the Las Vegas airport, just in time for the return of tourism to the state.”

“The results of our successful execution thus far can be seen in our April monthly revenues, which have nearly doubled since January. We expect step function growth across Q2, Q3 and especially Q4 2021, with further milestones reached when additional cultivation projects come on-line and we close our New Jersey acquisition later this summer,” Mr. Sandelman continued.

“We have always invested in building strong foundations for our business. As we expand in seven states, that means 2021 will be a year of investment in our brands. Especially in adult-use markets where merchandising, quality and selection drive consumer behavior, we are putting important resources into elevating and evolving the Ayr Wellness brand. We have partnered with a premier branding company to build the foundations for our national branding strategy – to be cultivators of wellness and creators of wonder with the highest quality flower and a reimagined dispensary design and consumer experience. These investments are expected to drive additional revenue growth in the second half of 2021 and into 2022 and beyond,” Mr. Sandelman concluded.

Outlook

Ayr said it is expecting second-quarter revenue to grow 54% to approximately $90 million, which would be a 218% increase year-over-year. The Adjusted EBITDA margin on a US GAAP basis is expected to remain in the 30% range in the second quarter, reflecting the investment in new markets and growth projects that are expected to generate more meaningful revenue in the second half of 2021 and in 2022. The company said it is reiterating its target for 2022 revenue of at least $725 million. On a US GAAP-adjusted basis, it is also reiterating its guidance for 2022 Adjusted EBITDA of $300 million, which is comparable to $325 million on an IFRS basis.


Debra BorchardtApril 22, 2021
Planet.jpeg?fit=960%2C659&ssl=1

5min18940

420 was predicted to be a huge day for cannabis sales and it certainly didn’t disappoint. Akerna said that by the time Tuesday hit, the daily retail sale of legal cannabis was expected to gross $95 million nationally, bringing total 4/20-related sales to $370 million in the U.S. if Akerna’s data proves accurate.

Planet 13

Nevada-based Planet 13 Holdings Inc.(OTCQB:PLNHF)  a leading vertically-integrated Nevada cannabis company, announces record sales day on April 20, 2021 (“420”). The Company generated $543,000 in single-day sales with gross margins during the month in excess of 50%.

“The demand and acceptance for cannabis is growing across the country, and nowhere is that more evident than in Las Vegas. For tourists returning to Vegas, Planet 13 is synonymous with cannabis and an incredible entertainment experience,” said Larry Scheffler, Co-CEO of Planet 13. “The demand is so overwhelming that even with the many improvements we have made to streamline throughput, we still can’t capture all of the demand. I’m excited for the relaxing of COVID restrictions on May 1st and our expansion which doubles our sales floor and points of sale to handle the unprecedented surge in customer traffic.”

Planet 13 said it is also hiring over 300 workers to staff its Vegas dispensary expansion (doubling points-of-sale/registers to 85) and to staff its new California SuperStore.

Ayr Wellness

Ayr Wellness Inc. (OTCQX: AYRWF) said it celebrated the 420 holiday with retail sales records across its six-state footprint. Nevada, Massachusetts, and Pennsylvania all had record days. In total, the company saw 14,241 transactions and $1.24 million in sales on Tuesday, for an average ticket of $87. Retail gross margin remained high at over 50%.

In Nevada, where the local economy is seeing the benefits of the reopening of the casinos and entertainment venues, Ayr, through its service and operation agreements with licensed operators, saw over 7,500 transactions, including over 2,000 in its busiest location in Henderson, NV, 30% above its average daily count.

“I could not be prouder of our Ayr Wellness team. This 420 we set a new standard for performance and customer service with over 14,200 transactions processed in one day. As cannabis continues to mainstream throughout our culture and 420 increasingly becomes a “National Holiday”, we are thrilled to provide our consumers with an exceptional customer experience, excellent products, and new ways to safely celebrate the wellness and wonder of cannabis,” said Jonathan Sandelman, CEO of Ayr Wellness.

Eaze


California’s largest marketplace for legal cannabis delivery announced record 420 sales. Eaze customers bought an average of $200 worth of cannabis on 4/20/21, a 50% increase in order value over 420 2020. Deliveries were also up significantly, with a 185% increase compared to any other Tuesday in 2021. Eaze, which has completed 7 million deliveries to date, recently announced its expansion into Michigan and its line of private label brands. “Cannabis consumers moved to delivery as their preferred way of shopping last year, so we’re not surprised to see such a strong 420 in 2021,” said Ro Choy, CEO of Eaze, “Even as daily life begins to return to normal, consumers are staying with the convenience of delivery. It’s the future of this industry.”


Don't Miss This Week's Groundbreaking News

Join the thousands of subscribers who stay informed with GMR's exclusive news briefs delivered directly to your inbox every Friday afternoon.

We respect your privacy. See our privacy policy.


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


READ MORE



Recent Tweets

@GreenMarketRpt – 9 hours

We will be live blogging from all week. Head to the website – link in bio – if you didn’t m…

@GreenMarketRpt – 12 hours

⁦@PelorusEquityGr⁩ Upsizes Offering To $1 Billion

Back to Top

Don't Miss This Week's Groundbreaking News

Join the thousands of subscribers who stay informed with GMR's exclusive news briefs delivered directly to your inbox every Friday afternoon.

We respect your privacy. See our privacy policy.