Ayr Wellness To Sell Arizona Assets Reducing Long Term Debt By $22.5M

Zinger Key Points
  • To receive consideration of $20 million in cash, with additional cash proceeds to be received within six months of closing the transaction.
  • The company has entered option agreements to acquire Ohio dispensary licenses.

Ayr Wellness Inc. AYRWF AYR 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 sq. ft. cultivation and processing facility in Chandler, an 80,000 sq. ft. 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, the buyer 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.

The Ohio Agreements

Ayr has entered option agreements that provide Ayr 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’s dispensary location is in Clermont County, part of the Greater Cincinnati area. Neither location is operational at this time.

In addition to the option agreements, the company has also entered into a support services agreement and a working capital loan agreement with the Daily Releaf and Heaven Wellness cannabis dispensaries (Collectively the “Ohio agreements”). 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.

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Photo: Benzinga edit with photos by geralt and lindsayfox on Pixabay

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Posted In: CannabisNewsPenny StocksMarketsAZ GoatBlue CamoDaily ReleafHeaven WellnesspremiumWillcox OC
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