Ayr Wellness, a multi-state cannabis operator based in Miami, announced on Wednesday, July 30th, a restructuring plan that includes the sale of licenses in eight U.S. states to pay off debts with creditors. After this process, the company is expected to completely shut down its remaining operations.

In an article published on New Cannabis Ventures, cannabis industry stock expert Alan Brochstein stated that the current environment is "dangerous for American cannabis companies."

"This will be a challenging time to find buyers who can secure financing and not run afoul of the rules of certain states (like Florida and Pennsylvania, for example). Additionally, this could scare off investors from other MSOs, such as Curaleaf, which have a lot of debt and very negative tangible net worth," he continued.

Asset sale marks the beginning of Ayr Wellness' liquidation

The liquidation of Ayr Wellness' assets marks a turning point for the company, which, like many other MSOs (multi-state operators), experienced rapid growth in 2021. In March of that year, its shares were valued at $35.40. Today, they are traded at just $0.03.

Under the restructuring agreement:

Senior creditors will acquire assets in Florida, Ohio, Nevada, New Jersey, Pennsylvania, and Virginia;

The agreement includes a $50 million bridge loan, with monthly interest of 14%, to maintain basic operations;

The proceeds from the auction sale will be returned to the creditors;

The company will commence a court-supervised liquidation process under Canadian law, where it is publicly listed;

AYR subsidiaries may also file for Chapter 7 bankruptcy in the U.S. to formally wind down their local operations.

Ayr Wellness' debt situation was already critical

Ayr Wellness had already signaled financial difficulties. In February 2024, the company announced a $40 million infusion, which allowed it to pay off or extend nearly $400 million in debts, most of which were due by 2026. However, $358 million in outstanding debts remained.

Since then, the operator tried to cut costs and increase revenues, but the efforts were not enough to reverse the situation.

Ayr Wellness' operations prior to restructuring

At its peak, Ayr Wellness operated 97 cannabis stores in eight states. In early 2024, the company sold four units in Illinois and denied rumors that it was negotiating its licenses in Connecticut, where it had a partnership with a social equity applicant.

In its most recent financial results, released this year, the company reported a loss of $161 million, despite gross revenue of $463.6 million.

Additionally, Ayr had secured the last vertically integrated medical marijuana (MMJ) license in Virginia and was building a 98,000-square-foot cultivation facility in Florida, expected to be operational in the second half of 2025. 

With information from MjBizDaily