Ayr Stock Buyback
AYR is a LONG
Ayr has announced that it has plans to buy back 5% of its shares which is the maximum allowed for CSE-listed companies. Jonathan Sandelman, CEO of Ayr Wellness, said, “We have said time and again that our stock is significantly undervalued, and we are drawing a line under that statement with today’s share repurchase announcement. We expect this program to be used opportunistically and to commence immediately. We could not be more pleased with the current state of our operations and continue to invest in our company’s explosive growth, as evidenced by our raise in revenue guidance just last week. We continue to invest in and build our business, both organically and through M&A, and this repurchase program allows us to also invest in the exceptional value that our own shares represent.” This repurchase is after a $110 Million capital raise in April of 2021 at a 12.5% interest rate. It doesn't make sense for Ayr to raise cash to use it to buy back shares. Ayr may be repurchasing these shares at a low stock price while the market is depressed and then selling at a higher price later. In addition to this news, in the press release, Ayr reaffirmed their guidance for 2022 of $800 Million and $300 Million in adjusted EBITDA. Ayr's cash balance was $123 Million at the end of Q2.
RIV Capital Investment
RIV Capital is a cannabis investment and acquisition firm that is traded under the ticker CNPOF. RIV recently announced a $150 Million investment from the Hawthorne Collective, a subsidiary of The Scotts Miracle-Gro Company, for RIV to enter the US cannabis market. Scotts, a company with significant expertise in plant growth, cannot have a cannabis touching business and remain listed on the NasdaqHowever. However, Scotts wanted to get into the cannabis business, so they created the subsidiary company known as the Hawthorne Collective. The $150 Million investment comes in the form of a convertible loan which accrues interest at 2.03%. “Indeed, the growth of The Hawthorne Gardening Company over the past six years has generated significant shareholder value,” said Jim Hagedorn, Scotts Miracle-Gro chairman, and CEO, in a released statement. “It also has allowed us to develop a rare level of expertise and insight regarding the cannabis space without being involved in the plant-touching aspects of the industry. That is why we are beginning to invest in other areas of the industry through The Collective while continuing to pursue near-in strategic acquisitions to fold into the existing Hawthorne Gardening business.”
Arizona Tracker
Arizona Department of Taxation has started releasing sales data for both adult-use and medical. However, they had leveled off and started declining sequentially after seeing a large spike in sales when they first began in 2021. Surprisingly, medical has been growing more than adult use in the state. The run rate based on the past month of sales is $1.4 Billion. The company's with the largest footprint in the state are Harvest Health, Curaleaf, and Verano.
