MIAMI, Feb. 9, 2023 – PRESS RELEASE – Ayr Wellness Inc., a leading vertically integrated U.S. multistate cannabis operator, has signed a definitive agreement to sell Blue Camo LLC, which comprises the company’s Arizona assets, to AZ Goat LLC, a group consisting primarily of the former owners of Blue Camo, who sold the business to Ayr in Q1 2021. The sale includes three Oasis-branded dispensaries in the greater Phoenix area, a 10,000-square-foot cultivation and processing facility in Chandler, an 80,000-square-foot cultivation facility in Phoenix, and Willcox OC LLC, a joint venture developing an outdoor cultivation facility.
Ayr is to receive consideration of $20 million in cash, with additional cash proceeds from net working capital to be received within six months of closing the transaction. In addition, Blue Camo intends to assume lease obligations that will result in the elimination of approximately $15 million in long-term lease liabilities for Ayr. In a separate arrangement, all potential earn-out contingent consideration and debt outstanding related to the Q1 2021 purchase of Blue Camo are to be eliminated, reducing Ayr’s long-term debt by $22.5 million. The sale is subject to certain closing conditions and regulatory approvals, with an anticipated closing in H1 2023.
When Ayr acquired Blue Camo in Q1 2021, total purchase consideration included approximately $9.5 million in cash, 4.6 million Ayr shares, and $22.5 million in net adjusted seller notes.
“Ayr’s proposed sale of Arizona assets represents the latest in a series of optimizations focused on simplifying our business and prioritizing existing and future markets where we can build depth,” said David Goubert, president at Ayr. “Today’s action allows Ayr to focus on key markets for growth and profitability, adds cash to our balance sheet and reduces outstanding debt.”
Ayr also announces that it has entered option agreements that provide the company with the future ability to acquire 100% of the equity interests of two entities each provisionally licensed to operate a medical marijuana dispensary in Ohio—one from Daily Releaf LLC, and one from Heaven Wellness LLC. Daily Releaf’s dispensary location is in Riverside, Ohio, part of the Dayton Metropolitan Area. Heaven Wellness’ dispensary location is in Clermont County, part of the Greater Cincinnati area. Neither location is operational at this time.
“Ayr is excited to invest further into the Ohio market and looks forward to establishing a fully vertical presence once permissible under Ohio regulations,” Goubert said. “The two dispensaries will complement our footprint in the state, where our [approximately] 58,000-square-foot cultivation facility is expected to post its first sales this quarter. We look forward to introducing Ohio patients to the Ayr customer experience and high-quality products across all allowable form factors, while acting as a force for good in the communities we serve.”
In addition to the option agreements, the company also entered into a Support Services Agreement and a Working Capital Loan Agreement with the Daily Releaf and Heaven Wellness cannabis dispensaries. The Ohio agreements are subject to ongoing compliance with Ohio law and the jurisdiction of the State of Ohio Board of Pharmacy including variance approval for the loan agreement funds which has not been granted at this time.
To learn more about Ayr Wellness or to locate your nearest dispensary, visit www.ayrwellness.com.