Ayr Wellness Inc. (OTCMKTS: AYRWF) has signed a definitive agreement to buy Herbal Remedies Dispensaries LLC. Herbal operates two licensed dispensaries in Illinois, and with the acquisition, the company adds the eighth state in its fast-growing national footprint.
Ayr Wellness expanding its nationwide footprint
CEO Jonathan Sandelman said, “Today’s announcement represents the next step in our goal to position Ayr as a leading MSO, with a strong presence in states that deliver meaningful revenue. Illinois will become the eighth state in our expanding footprint, which now reaches close to 85 million people. The total cannabis market in Illinois is already run-rating at $1.8 billion in annual sales, despite adult-use launching only 18 months ago.”
Sandelman added that the Herbal Remedies team has been exceptional in Quincy, creating a strong reputation and building a business for merchandising and good customer service. He said this befits what Ayr Wellness is looking for in a partner to enter new markets. Sandelman said that they are l0ooimng forward to collaborating with Herbal to expand their presence in Illinois.
Ayr Wellness to acquire Herbal remedies for $30 million
Most importantly, Herbal Remedies has experience in the market, considering it is among the first marijuana dispensary operators to receive a license in the state following the approval of the Compassionate use of Medical Cannabis program back in 2013. Currently, both recreational and medical cannabis use is legal in Illinois.
Ayr will acquire 100% interest in Herbal at a consideration of $30 million. The transaction comprises $12 million in seller notes, $10 million in stock, and a cash payment of $8 million. As per the current forecasts, Ayr Wellness is paying around 5X Herbal’s 2021 EBITDA. Once the transaction is finalized, Herbal will add around 50 workers to Ayr. The transaction is likely to close in Q4 2021, subject to regulatory approvals and customary closing conditions.
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