Ayr Wellness Q3 Revenue Spikes 111% YoY To $96M, Continues Acquisition Spree In Chicago

Vertically-integrated cannabis company Ayr Wellness Inc. AYR AYRWF reported its financial results Monday for the three and nine months ended September 30, 2021, revealing a 111% year-over-year and 5% sequential increase in revenue, which amounted to $96.2 million.

“We are pleased to report another great quarter of growth at Ayr, more than doubling our revenue from last year’s third quarter and up 5% sequentially in a flat cannabis market,” said Jonathan Sandelman, the company’s CEO, adding that Ayr seeks to “be the largest scale cultivator of high-quality cannabis in the United States.”

Q3 2021 Financial Highlights

Adjusted gross profit, a non-GAAP measure, totaled $56.6 million, representing a 97.9% year-over-year and 6.6% sequential improvement.
Adjusted EBITDA, a non-GAAP measure, came in positive at $26 million, up by 40% year-over-year and down 5% sequentially as the company Invests in Future Growth.
EBITDA margin, a non-GAAP measure, was 27%, compared to 30% in the previous quarter and $40.8% in the prior year’s period.
US GAAP operating loss of $8.9 million, including non-cash, one-time expenses and non-operating adjustments totaling $34.9 million.
Total operating expenses amounted to $8.9 million.
As of Sept.30, the company had $1.64 billion in total assets and $659.2 million in total liabilities.

Q3 2021 & Recent Business Highlights

Finalized acquisition of Garden State Dispensary, adding New Jersey to Ayr’s growing footprint, including three open dispensaries and 24,000 square feet of operational cultivation and production facilities, with an additional 75,000 square feet of cultivation under development coming online with sales in the second quarter of 2022.
Completed combination with PA Natures Medicine, adding three dispensaries in central Pennsylvania, including the college towns of Bloomsburg and State College.
Organic revenue growth from Massachusetts and Nevada was 18% year-over-year.
Scaled workforce by hiring over 300 new employees across all levels.

The management is forecasting revenue growth of over 10% sequentially in the fourth quarter, while adjusted EBITDA is expected to remain roughly flat sequentially.

In addition, Ayr revised its 2022 Adjusted EBITDA guidance to a range of $250 million to $300 million. It also reiterated its target for 2022 revenue of $800 million.

Ayr Wellness Expands In Illinois Via $55M Acquisition Of Dispensary 33

Separately, Ayr Wellness revealed that it plans to acquire Gentle Ventures, LLC, which is doing business as Dispensary 33, and certain of its affiliates that collectively own and operate two licensed retail dispensaries in Chicago, Illinois.

Dispensary 33 operates stores on N Clark Street in the Andersonville neighborhood, W Randolph Street in West Loop.

Under a definitive purchase and sale agreement between Ayr, its affiliate, and Dispensary 33 and the holders of 100% of the equity interests’ holders of Dispensary 33, the Miami-based company agreed to pay $55 million upfront, including $12 million of cash, $3 million of sellers notes and $40 million of stock as consideration for the acquisition.

In addition, an earn-out is payable if certain adjusted EBITDA performance is achieved through the third quarter of 2022.

The company said that the previously announced acquisitions of Levia - a cannabis beverage company - Illinois-based Herbal Remedies and Nevada-based Tahoe Hydro are expected to close in the first quarter of 2022, followed by Dispensary 33 in the first half of the following fiscal year.