Distressed marijuana multistate operator Ayr Wellness is now owned by its former creditors.
Following through on “restructuring” plans partially triggered by a debt crunch, Ayr’s senior note holders scooped up assets “and equity interests” held by the multistate operator in seven states via a foreclosure auction on Tuesday, according to a news release.
Terms, such as the sale price, were not announced, but senior note holders had $387 million in credit available toward a purchase, MJBizDaily reported last month.
Final transfer of Ayr’s licenses is subject to regulator approval, Wednesday’s news release noted.
The foreclosure sale is one step toward the eventual “winding down” of Ayr as currently incorporated, the company said.
For the time being, Ayr Wellness will continue to operate in certain states while working on the transfer to a new corporate entity, interim chief executive officer Scott Davido said in a statement.
New company owned by Ayr’s creditors has opportunity
It’s the latest step in a dramatic fall from grace for Ayr.
Shares in the company, worth more than $35 at the cannabis market’s 2021 peak, were trading for under $0.02 on Wednesday.
As of last summer, the company had $358 million in debt maturing in 2026, according to filings.
According to Davido, the restructuring deal will allow Ayr’s next iteration to cut its debt by 50% while also investing in Virginia.
That’s where the company holds one of only five vertically integrated MMJ permits. It has yet to begin operations in the state, but adult-use cannabis sales are expected to finally begin as soon as next year.
According to Wednesday’s news release, senior note holders acquired “certain collateral assets and equity interests of specified (Ayr) subsidiaries” in seven states.
These are:
- Florida, where Ayr operates 66 medical marijuana dispensaries.
- Massachusetts, where it announced the closure of a 217,800-square foot cultivation operation in August.
- New Jersey, where it operates three adult-use stores.
- Nevada, where it also announced plans to lay off workers.
- Pennsylvania, where it has six MMJ dispensaries, according to the company.
- Ohio, where it has seven MMJ dispensaries.
- Virginia, where advocates hope the election of a new Democratic governor means the long-delayed start of adult-use sales.
Ayr Wellness foreclosure sale follows earlier sell-off
As of last month, Ayr had already sold off assets in:
- Massachusetts: cultivation/manufacturing and medical-only Needham dispensary.
- Pennsylvania: three PA Natural stores and a cultivation facility in Pottsville.
- Nevada: cultivation and process facility.
- New Jersey: a Lakewood cultivation facility.
- Connecticut: one retail location.
Final transfer of Ayr’s licenses is subject to regulator approval, Wednesday’s news release noted.
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