Ayr Wellness Completes Acquisition of Garden State Dispensary
MIAMI, September 15, 2021 (GLOBE NEWSWIRE) – Ayr Wellness Inc. (CSE: AYR.A, OTC: AYRWF) (âAyrâ or the âCompanyâ), a leading vertically integrated multi-state cannabis operator, today announced the closing, through a wholly owned subsidiary, of the purchase of 100% of the interests of GSD NJ LLC (“Garden State Dispensary” or “GSD”), one of the 12 existing vertical license holders in the state of New Jersey and one of the state’s original six Alternative Processing Centers (âATCsâ).
GSD has three open dispensaries, the maximum allowed under its license, on high traffic highways throughout the central region of the state, as well as approximately 30,000 square feet of operational growing and production facilities. An additional 75,000 square feet of cultivation are under construction.
âWe are delighted to welcome the Garden State Dispensary to Ayr’s team and to have the opportunity to serve the New Jersey cannabis market. New Jersey presents a tremendous opportunity for Ayr, with a high population density, noticeable demand for cannabis, a disciplined licensing structure, and rapidly approaching adult sales. We look forward to introducing the great people of New Jersey to our quality offerings, including key brands such as Origyn Extracts and Kynd Premium Flower, through our three outlets and into the broader wholesale market, âsaid Jonathan Sandelman , founder, CEO and president. of Ayr.
The total initial consideration of US $ 101 million includes US $ 41 million in cash, US $ 30 million in exchangeable shares and US $ 30 million in promissory note. Gains based on exceeding target income thresholds in 2022 will be capped at a maximum of US $ 97 million and payable in a combination of cash, promissory notes and exchangeable shares. Including the maximum consideration of the earn-out, the Company estimates that this represents a forward multiple of approximately 4x the Adjusted EBITDA expected in 20221.
The New Jersey Cannabis Regulatory Commission (âCRCâ) authorized CSAC Acquisition NJ Corp., a wholly-owned subsidiary of Ayr, to acquire 100% of the interests in GSD NJ LLC, at its meeting on September 14, 2021.
In November 2020, voters in New Jersey approved a referendum legalizing adult cannabis in the state. In February 2021, legislation implementing legalization was enacted, which will allow the current 12 medical cannabis licensees to be the first to market when CRC creates a regulatory framework and allows sales for adult use to begin. . The BDSA estimates that the size of the adult use market, once sales begin, will reach US $ 1 billion by 2022. New Jersey is number 11.e The most populous state in the United States with 9 million people and currently has 36 approved dispensary licenses (of which 19 are operational) and 12 approved growers.
âAdjusted EBITDAâ represents the operating loss, as reported, before interest and taxes, adjusted to exclude non-recurring items, other non-monetary items, including depreciation and amortization, and adjusted to remove compensation at non-monetary equity basis, the recognition of additional costs to acquire cannabis stocks as part of a business combination, acquisition costs and start-up costs. A reconciliation of how Ayr calculates Adjusted EBITDA and other information regarding non-GAAP measures is provided in our MD&A for the six-month period ended June 30, 2021. The Company believes that these non-GAAP financial measures GAAP provides additional significant information regarding the performance of the Company and may be useful to investors as it allows greater transparency with respect to the key indicators used by management in its financial and operational decision making. These financial measures are intended to provide investors with additional measures of the operational performance of the Company and thereby highlight trends in the main activities of the Company which may not otherwise be apparent based solely on GAAP measures.
Certain information contained in this press release may be forward-looking statements within the meaning of applicable securities laws. Forward-looking statements are often, but not always, identified by the use of words such as “target”, “expect”, “anticipate”, “believe”, “expect”, “could”, “may”, “Estimate”, “objective”, “prospect”, “intention”, “plan”, “seek”, “will”, “can”, “continue”, “the pace” and “should” and expressions or similar words suggesting future results. This press release contains forward-looking information and statements concerning, among other things, Ayr’s future growth plans. Numerous risks and uncertainties could cause actual events and results to differ materially from the estimates, beliefs and assumptions expressed or implied in forward-looking statements, including, but not limited to: anticipated strategic, operational and competitive advantages may not be realized; events or series of events, including those related to COVID-19, may cause business interruptions; required regulatory approvals may not be obtained; acquisitions may not be able to be completed on satisfactory terms or not at all; and Ayr may not be able to raise additional debt or equity. Among other things, Ayr has assumed that its business will operate as intended, that it will be able to complete acquisitions on reasonable terms and that all required regulatory approvals will be obtained on satisfactory terms and on schedule.
Estimates and assumptions involve known and unknown risks and uncertainties which may cause actual results to differ materially. Although Ayr believes that there is a reasonable basis for these assumptions, these estimates may not be satisfied. These estimates represent forward-looking information. Actual results may vary and differ materially from estimates.
About Ayr Well-being
Ayr is a growing, vertically integrated US multi-state cannabis operator focused on delivering the highest quality cannabis products and customer experience across its footprint. Starting from the belief that it all starts with the quality of the plant, the company focuses on superior cultivation to grow top brand cannabis products. Ayr strives to enrich the consumer experience every day through the well-being and wonders of cannabis.
Ayr’s leadership team brings a proven track record in growing successful businesses through disciplined operational and financial management, and is committed to making a positive impact for customers, employees and the communities they touch. . For more information, please visit www.ayrwellness.com.
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1 GSD NJ LLC adjusted EBITDA expected in 2022 based on Company estimates.