Ayr Wellness Inc. (OTC: AYRWF) hasn’t been round that lengthy however has shortly confirmed itself to be a contender. Ayr Wellness simply introduced its thirty seventh dispensary opening in Florida below the Liberty Well being Sciences umbrella in Key West. The 1,500 sq. ft. location sits on the primary strip of Downtown Key West. The dispensary incorporates a choice of flower merchandise, along with the corporate’s newly launched Origyn concentrates and Huge Pete’s Cookies.
Jonathan Sandelman, CEO of Ayr, stated, “We’re persevering with to execute on our Florida plan, opening dispensaries in prime areas whereas frequently enhancing our cultivation efforts to make us the very best high quality cultivator at scale within the state. Our up to date product choices, together with a diversified pressure choice and launch of Origyn Extracts and Huge Pete’s Cookies, have already contributed to an improved buyer expertise, and the outcomes are starting to indicate.”
Viridian analyst Jonathan DeCourcey not too long ago named Ayr Wellness his prime MSO (multi-state operator) choose, giving the corporate a $42 goal value. Ayr Wellness was recently promoting at $28. AYR administration has stated it believes its revenues can hit $725 million in 2022 and DeCourcey thinks that would really be a conservative quantity.
DeCourcey believes the corporate is “poised for a large second-half ramp in outcomes and extra importantly transformational progress in 2022 and past.” It is a large praise contemplating the corporate has fought its means by the robust markets of Massachusetts and Nevada. The sluggish roll of the Massachusetts adult-use market crashed headlong into the pandemic lockdowns. Whereas different states allowed the sale of adult-use cannabis to proceed, Massachusetts declared solely medical marijuana could possibly be offered throughout these attempting occasions. This setback together with licensing delays wreaked havoc on the enterprise plans of many firms within the state.
“Massachusetts might be an outperforming progress marketplace for Ayr,” wrote DeCourcey. “Given the Again Bay location, we count on the dispensary to shortly grow to be probably the most productive within the state. Total, we count on Ayr’s Massachusetts revenues to develop from roughly $57 million final 12 months to $102 million in 2021 and $ 131 million in 2022.”
Nevada additionally confronted the entire shutdown of tourism for months and Ayr’s publicity to the state seemed dangerous. Now, nevertheless, this state is roaring again to life.
One factor DeCourcey likes about Ayr is its acquisitions into high-growth states. The corporate has planted its flag in Arizona, Florida, Pennsylvania, Ohio, and New Jersey. He wrote, “In every growth market, Ayr is constructing out belongings each by way of cultivation capability and retail footprint. We count on AYR will shortly acquire a number one share inside every new state within the close to time period given the corporate’s monitor file of integrating belongings and executing worthwhile operations amidst difficult situations.” Past these strikes, the corporate continues to be positioned so as to add extra. It has roughly $210 million in money following the 4 closed acquisitions and might want to spend $41 million to finish New Jersey. The corporate has stated it plans to spend $127 million on its subsequent spherical of acquisitions. The analyst urged Connecticut of New York as attainable states for growth. Though he did recommend that the midwest area can be the probably place for a near-term transfer particularly on the wholesale aspect. Maybe Glass Home is in play now that its cope with Mercer fell by?
The analyst thinks that the corporate’s many acquisitions had the unlucky timing to coincide with the latest bear market in cannabis shares. He thinks the valuation is unfairly discounted regardless of the corporate’s execution. He famous that New Jersey’s numbers haven’t even been factored into his personal mannequin. “We imagine the valuation low cost is unwarranted, making Ayr one of many prime funding alternatives in cannabis and our prime choose amongst MSO’s.”
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