MIAMI, Sept. 15, 2021 (GLOBE NEWSWIRE) -- PRESS RELEASE -- Ayr Wellness Inc., a vertically integrated cannabis multi-state operator, has announced it has closed, through a wholly owned subsidiary, on the purchase of 100% of the membership interests of GSD NJ LLC (Garden State Dispensary or GSD), one of the 12 existing vertical permit holders in the State of New Jersey and one of the state’s original six alternative treatment centers (ATCs).
GSD has three open dispensaries, the maximum allowed under its permit, at heavily trafficked highway locations throughout the central region of the state, as well as approximately 30,000 square feet of operational cultivation and production facilities. An additional 75,000 square feet of cultivation is under construction.
“We are thrilled to be welcoming Garden State Dispensary to the Ayr team and for the opportunity to serve the New Jersey cannabis marketplace. New Jersey presents a tremendous opportunity for Ayr, with high population density, a noted demand for cannabis, a disciplined license structure and adult-use sales rapidly approaching. We look forward to introducing the great people of New Jersey to our quality offerings, including key brands such as Origyn Extracts and Kynd premium flower, via our three retail locations and in the broader wholesale market,” said Jonathan Sandelman, founder, CEO and chairman of Ayr.
Total up-front consideration of US$101 million includes US$41 million in cash, US$30 million in exchangeable shares and US$30 million in the form of a promissory note. Earn-outs based on exceeding revenue target thresholds in 2022 will be capped at a maximum of US$97 million and payable in a combination of cash, promissory notes and exchangeable shares. Including the maximum earn-out consideration, the company estimates this represents a forward multiple of approximately 4x anticipated 2022 Adjusted EBITDA.
The New Jersey Cannabis Regulatory Commission (CRC) approved CSAC Acquisition NJ Corp., a wholly owned Ayr subsidiary, to acquire 100% of the membership interests in GSD NJ LLC, during its meeting on Sept. 14, 2021.
In November 2020, New Jersey voters approved a referendum legalizing cannabis for adult use in the state. In February 2021, legislation implementing legalization was enacted that will enable the current 12 medical cannabis permit holders to be first to market when the CRC creates a regulatory framework and permits adult-use sales to commence. BDSA estimates the adult-use market size, once sales commence, to reach US$1 billion in 2022. New Jersey is the 11th most populous state in the U.S. with 9 million residents and currently has 36 approved dispensary licenses (19 of which are operational) and 12 approved cultivators.