New Jersey Archives - Green Market Report

Video StaffApril 21, 2022

1min8170

Ascend Wellness (OTC: AAWH) was excited to open its store in Rochelle Park, New Jersey for legal adult-use cannabis sales. The company opted to start opening day with appointment-only visits. If a walk-in customer was able to book an appointment immediately, they could shop, otherwise, Ascend gave them a $5 coupon if they had to wait for an appointment. The company wanted a controlled open versus lines of customers. Police were helping to direct traffic and the parking lot next to the store was active with cars coming and going.


StaffApril 19, 2022
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5min4890

Australis Capital Inc. (CSE: AUSA) (OTC: AUSAF) also known as Audacious was awarded a provisional Cultivation license, as well as a provisional manufacturing license in the state of New Jersey.

New Jersey has become the latest state to attract the attention of cannabis companies in the country. Adult-use sales will begin this Thursday, April 21 jump-starting a process that has continually stalled since voters agreed to legalize it in 2020. With a population near 9 million people, it is estimated that the total New Jersey market could reach $2 billion. So far, the state has awarded 37 conditional cultivation licenses and 70 conditional manufacturing licenses, in addition to allowing 6 of the incumbent 12 medical use operators to participate. Audacious said that the limited number of licenses awarded and the limited availability of municipalities that have opted in will give them a significant early mover advantage.

AUDACIOUS‘ new team, just one year ago, committed to being laser-focused on the U.S. East coast and this successful license application is another example of how we continue to execute rapidly on this strategy,” said CEO Terry Booth. “With projects underway in New YorkMassachusetts and now New Jersey, our footprint is rapidly expanding in what we believe will be some of the most significant and profitable markets in the U.S. We have more up our sleeve in the states mentioned, and we look forward to informing the market as we continue on our rapid growth trajectory.”

The company said in a statement that it has up to 150 days to secure a location in one of the municipalities that opted in for adult use, enabling it to apply to convert the licenses from provisional to fully granted. Audacious said it has already identified a number of locations it intends to apply for permitting and is confident it will be able to meet all requirements. Under the regulations, the cultivation license allows for a facility with a maximum canopy area of 50,000 sq ft. The manufacturing license will enable the company to introduce its award-winning brands to the New Jersey market.

Achieve Facilities

Audacious said it plans to build one of its Achieve series of standardized facilities for the cultivation of premium products at low operating costs. “The 50,000 sqft maximum canopy size will permit a building with a total surface area of 100,000 sqft, or an Achieve 24 facility, which will include the manufacturing facility for which the company has obtained a provisional license as well. The Achieve 24is an all-inclusive indoor facility using supplemental sunlight along with the industry’s most efficient cannabis-proven LED lighting. It features a mother room, clone room, veg room, and flower rooms capable of producing 24,000+ pounds of dry flower a year.”

“The Achieve 24 takes growing to another level while saving on energy costs. The facility is designed with efficiency in mind through a sophisticated nutrient delivery system combined with a high level of automation. The facility is scalable, able to reach an impressive 100,000 pounds of dry flower a year. This facility features an automated benching system for the highest possible efficiency in logistics, benefitting transplant and harvesting greatly. Multiple SKUs can easily be manufactured in ample space for dedicated manufacturing suites – all at GMP quality and safety while being inclusive of the most efficient people and materials movement possible.”


Debra BorchardtApril 15, 2022
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On Thursday, New Jersey state officials announced that legal adult-use sales will begin on April 21.

New Jersey’s Green Light

The New Jersey Cannabis Regulatory Commission will be issuing licenses to seven alternative treatment centers (ATCs) to begin adult-use cannabis operations, including at 13 retail dispensaries, starting on  Thursday, April 21. Individuals 21 years and older will be able to purchase cannabis and cannabis products legally without a medical card.

“This is an exciting time for New Jersey,” said New Jersey Cannabis Regulatory Commission executive director Jeff Brown. “New Jerseyans voted overwhelmingly to have access to adult-use cannabis and it is now here. I am very proud of the work the Commission has done over the past year to open the market. We have been intentional and deliberate to do everything in our power to set the market on good footing to start.”

 

 

Green Thumb Industries (OTC: GTBIF), which uses the RISE banner said on Twitter that its dispensaries RISE Bloomfield and RISE Paterson will open next Thursday at 6 a.m.

Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) will be the sole cannabis company currently permitted to initiate personal use sales in New Jersey’s central region on April 21st at its Zen Leaf Elizabeth (117 Spring St) and Lawrence Township (3256 Brunswick Pike) dispensary locations.  CEO George Archos said, “April 21, 2022, is a day that will be forever celebrated by New Jerseyans, marking the historic moment when the Garden State’s vote to embrace progress over cannabis prohibition became reality. Thanks to the residents of New Jersey, and the courageous leadership of Governor Murphy, Senator Scutari, the Cannabis Regulatory Commission, and the countless township and county commissioners statewide, cannabis will realize its full potential to make a lasting, positive impact on the state’s economy and society. On behalf of Verano and Zen Leaf, we are excited and ready to welcome the first personal-use cannabis customers in the great state of New Jersey on April 21st.”

The company also operates Zen Leaf Neptune Township (2100 Route 66), a medical cannabis dispensary that will soon commence adult-use sales, along with a state-of-the-art, 120,000 square foot cultivation, and processing facility in Branchburg.

Acreage Holdings (OTC: ACRHF) said it is aiming to kick off sales at The Botanist Williamstown and The Botanist Egg Harbor that day.

Acsend Wellness (OTC: AAWH) said it wants to begin sales at its Rochelle Park facility. “It is an honor to be part of the inaugural group of cannabis businesses building the foundation for New Jersey’s adult-use market,” said Abner Kurtin, founder and CEO of AWH. “This is a tremendous milestone in our company growth, and we look forward to expanding cannabis access to more residents across the state while continuing to provide our patients with top care.”

He went on to add, “AWH has served thousands of patients since entering New Jersey’s medical market in May 2021, and we are equipped to offer the same affordable and safe cannabis experiences to our growing community of adult-use consumers,” said Frank Perullo, president of AWH. “Our knowledgeable retail team at Ascend Rochelle Park is prepared to welcome consumers at every stage of their cannabis journeys and provide personalized guidance for all lifestyles and preferences.”


Debra BorchardtApril 13, 2022
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With the news that New Jersey was finally approving some cannabis companies to begin selling adult-use cannabis, investors began salivating over who would triumph. Cannabis stocks have been in a decidedly long bear market causing investors to lose great sums of money (on paper at least). As the process to begin these sales went through a series of starts and stops, the companies along with the investors were getting frustrated. It’s incredibly difficult for a retailer to make staffing and inventory decisions when you have no clue as to when you when need either. Investors wanted to know who would reap the benefits of those sales and when it could be reflected in earnings releases.

Potential Market

Headset.io has predicted that the first full year of sales in New Jersey could bring in $740 million in sales. The company went on to write that New Jersey, with its adult-use transition expected in March 2022, is projected to boast a 21+ population of 7 million that will produce $1.6 billion in sales by 2025.

A Rutgers report wrote, “We estimate that New Jersey would collect between $118.2 million and $173.5 million per year after recreational marijuana is legalized and when the market is fully saturated.”

Acreage Holdings (OTC: ACRHF) said during its last earnings announcement that it increased cultivation capacity output nearly fourfold at the Egg Harbor facility in New Jersey to support the company’s own retail network and the rapidly growing wholesale market ahead of the launch of the adult-use sales. These are its approved locations and while the Atlantic City store wasn’t approved in the first round, it’s expected to happen eventually.

  • The Botanist by CCF, Egg Harbor Township
  • The Botanist by CCF, Williamstown (Monroe)

Curaleaf (CURLF) has three locations in New Jersey, but so far just two have been approved in the first round.

  • Curaleaf, Bellmawr
  • Curaleaf, Edgewater Park

TerrAscend (OTC: TRSSF has been also gearing up for the state to go legal. The company said that cash used in operations was $3.8 million for the three months ending in December 2021, mainly driven by an increase in inventory related to the anticipated start of adult-use sales in New Jersey. In the last earnings announcement, Executive Chairman Jason Wild, commented, “The strategic decisions we made in Pennsylvania have resulted in the highest quality product we have ever sold in this market. Additionally, the actions undertaken in New Jersey have our team prepared for adult use, where we have one of the largest cultivation footprints in the state, along with three ideal dispensary locations.”

  • The Apothecarium, Maplewood
  • The Apothecarium, Phillipsburg

Verano’s (VRNOF) New Jersey footprint consists of three cannabis dispensaries operated under the flagship Zen Leaf brand in Elizabeth (117 Spring St), Lawrence Township (3256 Brunswick Pike), and Neptune Township (2100 Route 66), along with a 120,000 square foot cultivation and processing facility in Branchburg. Darren Weiss, Verano Chief Operating Officer, and General Counsel said, “The approval of personal use cannabis marks a huge step forward for New Jersey, the cannabis industry, and the nation at large. On behalf of our Verano New Jersey team, we look forward to welcoming personal use visitors to our Zen Leaf dispensaries.”

  • Zen Leaf, Elizabeth
  • Zen Leaf, Lawrence

Green Thumb Industries (OTC: GTBIF) must be thrilled that one of its approved dispensaries is just a 30-minute drive from New York City. The company had two locations approved, while the Paramus store will continue serving medical-only patients.

  • RISE Dispensaries, Paterson
  • RISE Dispensaries, Bloomfield

Columbia Care’s (OTC: CCHWF) outlook for revenue in 2022 included sales that it hoped would come from New Jersey. The company forecast $625-$675 million in sales for the year and specifically called out New Jersey as contributing to that estimate. Col-Care also had two locations approved.

  • Columbia Care, Vineland
  • The Cannabist, Deptford (Columbia Care)

Ascend Wellness (OTC: AAWH) was also thrilled to get at least one location in the first group to begin sales. The company tweeted, “We are thrilled to announce that we are among the first cannabis companies permitted to sell adult-use cannabis in the State of New Jersey. We look forward to opening our doors to 21+ customers. Stay tuned.” The company currently operates two of the state’s 23 medical dispensaries and expects to sell adult-use cannabis products at its Montclair retail location at 395 Bloomfield Ave. and open a third dispensary, located in Fort Lee, later this year.

  • Ascend New Jersey, Rochelle Park

StaffApril 11, 2022
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The Daily Hit is a recap of the day’s top business news for the cannabis industry for April 11, 2022.

On the Site

New Jersey

Legal adult-use cannabis sales could begin within weeks as the state has approved seven licenses for companies already selling medical marijuana. The news came during a meeting held today by videoconference with the five-member Cannabis Regulatory Commission. The commission licensed 13 individual dispensaries located throughout New Jersey, but the seven companies must pay upward of $1 million in fees associated with the expanded licenses. “The path to get there does not have to be any specific length of time,” said Jeff Brown, executive director of the New Jersey Cannabis Regulatory Commission. “It doesn’t have to be 30 days. It can be less. It can be more.” Read more here.

Lume

Law360 reported that Michigan-based Lume Cannabis also known as Attitude Wellness LLC has lost its battle against the tiny town of Pinckney, Michigan. Lume was pretty annoyed that it didn’t win the sole cannabis license for this little town and sued the town to find out why. Lume already owns 26 stores in the state so the fight for this little town’s license was described by some in the state as a bullying move. Pinckney had originally opted out of the program and then changed its mind. Read more here.

Pelorus

Pelorus Equity Group completed the second and final tranche of its previously announced $77.3M non-dilutive real estate debt financing with Harborside Inc. (CSE: HBOR) (OTCQX: HBORF). The initial funding included three individual loans to Harborside, Urbn Leaf Holdings Inc., and Loudpack JV Corporation with a second tranche made available upon the final closing of the three-way merger.  The proceeds were used primarily to retire certain existing loans and provide additional working capital. Read more here

In Other News

Agrify

Agrify Corporation (Nasdaq:AGFY)has signed a definitive agreement for its Agrify Total Turn-Key Solution with Loud Wellness Inc. , a New Jersey-based cultivation and manufacturing operator. Loud Wellness is one of only eight awardees that received both the Class 1 Cultivator and Class 2 Manufacturer licenses in New Jersey. Agrify also forecasts approximately $118 Million in revenue over the next 10 years.

Aleafia

Aleafia Health Inc. (OTCQX: ALEAF) provided a corporate update regarding its outstanding listed unsecured convertible debentures (TSX: AH.DB), issued on June 27, 2019 and maturing on June 27, 2022. Further to the Company’s announcements on February 1, and March 1, 16, and 31, 2022, the Forbearance Agreement, entered into between the Company and holders of Convertible Debt representing approximately 62% of the aggregate principal amount of debentures outstanding, has been extended until April 26, 2022. The Agreement automatically renews for 14-day periods thereafter unless advance notice to the contrary is provided.


Debra BorchardtApril 11, 2022
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Legal adult-use cannabis sales could begin within weeks as the state has approved seven licenses for companies already selling medical marijuana. The news came during a meeting held today by videoconference with the five-member Cannabis Regulatory Commission. The commission licensed 13 individual dispensaries located throughout New Jersey, but the seven companies must pay upward of $1 million in fees associated with the expanded licenses.

“The path to get there does not have to be any specific length of time,” said Jeff Brown, executive director of the New Jersey Cannabis Regulatory Commission. “It doesn’t have to be 30 days. It can be less. It can be more.”

The companies assured the commission that they had the supply and inventory ready to support the business. “I do expect to see some heavy lines and heavy traffic around some of these facilities,” said Dianna Houenou, chairwoman of the commission.

George Archos, Verano (OTC: VRNOF) Founder and Chief Executive Officer said, “Today’s announcement is truly a monumental day for cannabis in New Jersey. The introduction of personal use sales will provide tremendous economic growth, tax revenue, and career opportunities for the benefit of countless New Jersey residents and businesses. On behalf of Verano, we are ready to welcome personal use customers alongside our valued medical patients at our New Jersey Zen Leaf dispensaries, where our attentive staff will provide compassionate care and counsel for our visitors for years to come. I’d like to thank Governor Murphy, CRC Executive Director Jeff Brown, and all the Commissioners, for their leadership in bringing this historic transition to life.”

Verano’s New Jersey footprint consists of three cannabis dispensaries operated under the Company’s flagship Zen Leaf brand in Elizabeth (117 Spring St), Lawrence Township (3256 Brunswick Pike), and Neptune Township (2100 Route 66), along with a state-of-the-art, 120,000 square foot cultivation and processing facility in Branchburg. Nationally, the Company’s active operations span 13 states, comprised of 95 dispensaries and 12 cultivation and processing facilities with more than 1 million square feet of cultivation capacity.

Curaleaf (OTC: CURLF) also made a statement on Twitter saying, “Today, the CRC gave us the green light to begin adult-use sales at our New Jersey locations pending final inspection and licensure. We look forward to sharing our passion for the plant with recreational customers and welcoming them to the cannabis community.”

Other companies given approval were Green Thumb Industries (OTC: GTBIF)and TerrAscend (OTC: TRSSF)


Leland RadovanovicMarch 3, 2022
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A New Jersey cannabis license applicant is suing the state and claiming that some license winners were using certain women as props to get special female-owned business license. Curio Holdings LLC, a subsidiary of privately-owned Curio Wellness based out of Maryland,  filed a lawsuit in the Superior Court of NJ, Appellate Division (#A-000947-21), against New Jersey Cannabis Regulatory Commission (NJCRC) for a stay of Alternative Treatment Center license awards in the Central Region, alleging application fraud from several of the awardees of the coveted licenses. 

Curio Holdings is claiming that because of  fraudulent Women Business Enterprise certifications (WBE) Altus New Jersey, LLC (Altus) and Holistic NJ I LLC (Holistic) among others, should have their license awards withdrawn and a stay on awards put in place.

WBE certifications are acquired through the Department of Treasury, Division of Revenue and Enterprise Services. To qualify for the M/WBE certification,, a business or enterprise has to be either be fully owned and controlled by a minority or woman or has 51% ownership interest or stock held by minorities and/or women and the management and daily business operations are controlled by one or more of the minorities and/or women who own it. Applicants get 90 points out of a possible 900 points for being a minority or women-led company.

Curio Holdings writes that NJCRC previously responded to its question on whether it fully vetted individual company M/WBE credentials by stating that “[a]pplicants that provided an approved New Jersey Department of Treasury issued MBE/WBE/Veteran-Business/Disabled Veteran Business certification were awarded the maximum points for this category.” In other words, NJCRC trusts the department’s certifications. 

Tangled Web Of Connections

The lawsuit outlines the alleged fraudulent WBE certifications for Altus, Holistic, AP NJ Health, and CHM Consulting, but the Altus and Holistic allegations are a tangled web of relationships and potential corporate system gaming.

Altus’ principal ownership lists  Katherine Bio. The lawsuit alleges that she has little to no experience in the management or daily operations of a cannabis business and has not been seen or heard at any of the previous host community approval meetings, nor was her ownership and Altus’ WBE certification touted publicly. Ms. Bio did however hold the principal position of “medical advisory committee” for Standard Farms, a once troubled Pennsylvania-licensed cannabis cultivator. Tilt Holdings (OTC: TLLTF) acquired Standard Farms in 2019 in a deal valued at $40 million. The company said that Bio was no longer associated with Standard Farms.

Instead of Bio, Robert Pease and Peter Goldrath have publicly represented Altus. Pease was the previous president and chief financial officer at Franklin BioScence. Mr. Goldrath was co-founder of Standard Farms, alongside Katherine Bio and her husband Peter A. Bio, the founder of Standard Farms. Both Goldrath and Mr. Bio are partners at a private cannabis investment firm called FocusGrowth Asset Management LP (FocusGrowth). 

The lawsuit alleges that the most telling fact that Altus’ WBE certification may be using Bio as a propare public comments from Goldrath that Altus’ funding and management will be supplied through management services and funding agreements with FocusGrowth, where both he and Mr. Bio are partners. 

Standard Farms’ Female Trouble

Mr. Bio and Mr. Goldrath, in their past lives at Standard Farms, have allegedly and unsuccessfully attempted to use a woman to game the application system to win more points. 

A former director of administrative operations for Standard Farms, Lisa Pabon, filed a wrongful termination lawsuit in 2018 against the company. She alleged that Mr. Bio and Mr. Goldrath fired her for refusing to defraud New Jersey during the 2018 RFA process. They wanted her to agree to claim that she was the “Equal Opportunity and Director of Community Outreach” and “Chief Administrative Officer” at Altus on the application – positions she never held at a company she never worked for. 

“I wasn’t going to go to jail for lying,” she told the Inquirer in 2019.

In the same lawsuit, Lisa Pabon also alleged that Standard Farms “sold product with defective/leaky cartridges” that she believed were emptied and recycled instead of being destroyed as required by law.

Although returned, there was no record in the state’s seed-to-sale cannabis tracking system. She documented at least $15,000 worth of marijuana oil returned from patients and vendors. Instead of responding to her concerns, Standard Farms fired her and later told the court that she was terminated for being rude, incompetent, and difficult to work with. 

The case was dismissed pending private arbitration, so Green Market Report is unable to confirm the results of the arbitration. In addition to this lawsuit, Standard Farms had multiple allegations from whistleblowers lobbied against the company in 2019. 

According to the Inquirer, Renee Kelso, the former director of quality assurance at Standard Farms, quit her job after trying to prevent the company from using hydrogen peroxide mist spray to control mold and mildew – a practice explicitly banned in the states for cannabis. 

Another executive, Paul Karlovich, quit Standard Farms because he said the company “made him do things that he wasn’t comfortable with.” He alleged the company broke the law and brought in seeds and cutting illegally after the 30-day deadline and that the company had neither the tools to mitigate the airborne mildew dust in the greenhouses from the humid climate of the Poconos nor proper odor mitigation system. 

After the Inquirer published the whistleblower’s stories and complaints, TerraVida Holistic Centers, immediately removed Standard Farms products from its stores. 

Holistic NJ A Layer Deeper

Curio also suggests that there’s more woman propping for  WBE fraud at Holistic NJ, a shell for Holistic Industries and where Amy Singer is listed as its principal owner. However, NJCRC’s award letter was penned to Josh Genderson, the CEO and chairman of Holistic Industries, a multistate operator of cannabis companies in Maryland, Massachusetts, Michigan, Missouri, Pennsylvania, and California.

This alone begs the question of Holistic NJ ownership, management and the day-to-operational control necessary to qualify for the WBE certification. In other words, if Singer is leading the company shouldn’t the correspondence be directed toward her?

Here’s where the relationships get tangled because Amy Singer, the purported owner of Holistic NJ, is married to Justin Singer, a partner at Feuerstein Kulick LLP, a cannabis boutique law firm that is named as the outside general counsel for Holistic Industries. Justin Singer is also a partner at FocusGrowth, along with Mr. Bio and Mr. Goldrath and two additional partners at Feuerstein Kulick.

From the Curio documents, it appears that FocusGrowth and Feuerstein Kulick principals are involved in both applications. This would disqualify both Altus and Holistic NJ Applications for violating the 2019 RFA rule that “significantly involved persons” can only be associated with one application. 

The lawsuit goes on the allege WBE fraud from CHM Consulting and misgivings about AP NJ Health’s application score based on prior predatory practices.

While it could be perceived as just sour grapes on Curio’s part, there is big money at stake here. 

Cannabis licenses are as valuable as they have ever been, especially in states where the number of them are capped. Plus, this wouldn’t be the first time a company was accused of using stand-ins to get a license. Harvest Health & Recreation paid $500,000 to settle a charge that it misrepresented a minority ownership in Ohio in 2020. The company said the company was minority owned while all the correspondence was going to the now former CEO Steve White. New Jersey may need to do more vetting when it comes to its social equity applicants.

This lawsuit is ongoing with​​ merits brief due on 4/18/2022.


Debra BorchardtDecember 9, 2021
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The New Jersey Cannabis Regulatory Commission has finally approved 14 of the 2019 medicinal cannabis business applications that had been previously held up due to a court-ordered stay of the review process. The commission said that ten applications for cultivation permits and four applications for vertically integrated permits were approved and can begin preparations to serve New Jersey’s medicinal cannabis patients. The group also said that because of increasing patient need, five more cultivation permits were awarded than had been planned in 2019. On December 15, the state will begin to accept applications for adult-use cannabis business licenses.

“The current alternative treatment centers have not kept pace with patient needs,” said CRC Chairwoman Dianna Houenou. “We constantly hear from patients that prices are too high and that there are too few dispensaries with too few product options. The situation has not changed with the legalization of recreational cannabis. Our priority is to our patients and increasing the planned number of medicinal cannabis operators in the market will greatly benefit them.”  Twelve alternative treatment centers and satellite locations across New Jersey currently serve 118,882 medicinal cannabis patients. 

Of the ten cultivator permits approved three are in North Jersey, five are in Central Jersey, and two are in South Jersey.  They could potentially add 235,000 sq. ft. of canopy to the market. The four vertically integrated awards (for businesses doing cultivation, manufacturing, and retail) could add another 120,000 sq. ft. of cannabis canopy and an additional four retail locations. 

Applicants approved for cultivation: 

  • Bloom Medicinals of PA 
  • CYOUR NJ 
  • Garden State Releaf 
  • GCSS 
  • Green Medicine 
  • Hillview Med 
  • The NAR Group 
  • NJ Nectar Ventures 
  • Noble Valley 
  • ZY Labs

Applicants approved for vertically integrated operations: 

  • Altus 
  • Etain 
  • Greenhouse Wellness 
  • Holistic

“We know how anticipated these final actions were and we are happy they are now completed,” said CRC executive director Jeff Brown. “The awardees can now continue with the process to establish their operations. This can only be a good thing for cannabis patients and New Jersey’s fledging cannabis industry.” 

“Over 117,000 patients are currently enrolled in New Jersey’s medical marijuana program, but the state only has 23 dispensaries open to provide this necessary medical aid to that population,” said Amy Peckam, CEO of Etain. “Approving additional cannabis growing, processing and dispensary licenses in the state will immensely help the program, providing patients with more variety and reducing their travel time to obtain their medicine. We cannot wait to bring our high-quality products and formulations to the patients and customers of New Jersey.”

Etain was one of the original five licensees in New York in 2015 and now has dispensaries in Yonkers, Kingston, Syracuse and a flagship in Midtown East in New York City. This approval will allow the company to open its first location outside of New York and expand the company’s presence in the tri-state area.

 


StaffMarch 29, 2021
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Ayr Wellness Inc. (OTCQX: AYRWF) is buying Garden State Dispensary, officially known as GSD NJ in a deal valued at $101 million.  Confirmation of the deal follows a Letter of Intent that was previously announced on December 22, 2020. The $101 million price tag includes $41 million in cash, $30 million in stock and $30 million in the form of promissory notes. The deal is expected to close in the third quarter of 2021.

“With its recent adoption of adult-use, New Jersey will be a leading force in the Northeast cannabis market. We look forward to serving the Garden State’s medical cannabis patients and working with the regulators to ensure a safe and robust roll-out of the adult-use program. We see an incredible opportunity to drive growth at retail with the introduction of our quality cannabis brands, expanded product offerings and exceptional in-store experience. Additionally, we see an excellent opportunity for wholesale growth given our planned cultivation expansion and past success at driving wholesale penetration in supply-constrained markets,” said Jonathan Sandelman, Chairman and Chief Executive Officer of Ayr.

Garden State Dispensary (GSD) is one of the 12 existing vertical license holders in the State of New Jersey and one of the state’s original six alternative treatment centers (ATCs). GSD has three open dispensaries, the largest retail footprint of any operator, at heavily trafficked highway locations throughout the central region of the state, as well as a 30,000 sq. ft. facility that houses the existing cultivation and production facilities in operation. An additional 75,000 sq. ft. is currently under construction. GSD currently employs 110 people, all of whom are expected to be retained by Ayr.

Total consideration pursuant to the Purchase Agreement of Earnout payments pursuant to the Purchase Agreement, based on exceeding certain target revenue thresholds following closing, will be capped at a maximum of $96.75 million and payable in a combination of cash, promissory notes and exchangeable shares. Including the maximum earnout consideration, the Company estimates this represents a forward multiple of approximately 4x 2022 adjusted EBITDA.


Debra BorchardtDecember 22, 2020
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Ayr Strategies (OTCQX: AYRWF) is buying Liberty Health Sciences (OTC: LHSIF) in an all-stock deal valued at $290 million. In addition, Ayr said it was buying the membership interests in GSD NJ LLC, a licensed operator in New Jersey, for upfront consideration totaling $101 million. Including these and other pending transactions, Ayr said it will have operations in seven states covering 73 million people, which include four adult-use markets and three medical markets.

“Today’s announcements represent a transformational next step for Ayr as a leading multi-state operator in the U.S.,” said Jonathan Sandelman, Chairman and Chief Executive Officer of Ayr Strategies. “Our strategy has always been to go deep in the best markets, targeting attractive assets in limited-license states with large populations, where we can build a vertically integrated presence and have a significant edge. New Jersey will be a leading force in adult-use legalization in 2021, and we look forward to working with the regulators to ensure a safe and robust roll-out of the adult-use program. Florida has one of the country’s most robust and rapidly growing medical programs, and we are acquiring one of the largest operators in terms of store count.

Liberty Assets

In this transaction, Ayr will be getting Liberty’s 387-acre cultivation campus in Gainesville, FL with over 300,000 sq. ft. of current production facilities in operation; 28 open retail dispensaries, seven completed and ready-to-open dispensaries, and seven dispensaries currently under construction. Liberty currently employs 335 people, all of whom are expected to be retained by Ayr. Ayr said it plans to spend approximately $15 million in capital expenditures in 2021 to improve and expand the Gainesville cultivation campus, as well as expand Liberty’s dispensary footprint.

New Jersey Assets

In addition to Liberty, Ayr is buying licensed operator Garden State Dispensary, which is one of the 12 existing vertical license holders in the State of New Jersey and one of the state’s original six alternative treatment centers (ATCs). GSD has three open dispensaries, the largest footprint of any operator, at heavily trafficked highway locations throughout the central region of the state, as well as 30,000 sq. ft. of cultivation and production facilities in operation. An additional 75,000 sq. ft. is currently under construction. GSD currently employs 110 people, all of whom are expected to be retained by Ayr.

The company said that the total up-front consideration of $101 million includes $41 million in cash, $30 million in stock, and $30 million in the form of a promissory note. Earn-outs based on exceeding revenue target thresholds in 2022 will be capped at a maximum of $97 million and payable in a combination of cash, promissory notes, and exchangeable shares. Including the maximum earn-out consideration, the company estimates this represents a forward multiple of approximately 4x 2022 adjusted EBITDA.

Mr. Sandelman added, “Our assets are the most productive in the industry, and we intend to bring this same operational excellence to Florida and New Jersey. We see an incredible opportunity to elevate Liberty’s cultivation, product selection and dispensary experience to the level of quality, productivity, selection, and service we have consistently achieved in our existing markets with the deep bench of talent and know-how we already have in place. We are thrilled that our disciplined and targeted approach to expansion has enabled us to build this terrific footprint from a position of strength, with a team that consistently demonstrates operational excellence and great support from our debt and equity investors.”


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