AYRWF is a Hedgeye Best Idea LONG.
We will be hosting a conversation with Jon Sandelman, the CEO of Ayr Strategies, on Wednesday, January 6th, at 2 PM ET.
With today's acquisitions, Ayr Strategies (AYRWF) is now the 4th largest vertically integrated U.S. multi-state operator with operations currently in five states. The company cultivates and manufactures branded cannabis products for wholesale and its retail stores. Ayr Strategies began in December 2017 by raising C$130M of equity in Canada through a SPAC offering and acquiring U.S. cannabis operators in Massachusetts and Nevada. Since then, it has made three acquisitions to expand into Pennsylvania, Ohio, and Arizona. Today, the company announced agreements to entered New Jersey and Florida. We believe that AYR is one of the best-positioned operators in the space, with strong organic growth coupled with focused expansion into other limited licensed states. Our call’s focus will be on the company’s critical operating strategies.
Topics of discussion and questions will include:
- The company's announced acquisition in FL and NJ.
- How the company's focus will shift to the other limited license states and highly populated states of IL, MI, NY, and MD.
- What were the essential criteria for entering a new state like NJ?
- Ayr has a relentless focus on quality business that generates a significant ROI. The company has paid between 1.0 and 3.2x NTM (A) EBITDA for its recent acquisitions. Can those multiples be achieved in 2021, given the new (green) rush to buy cannabis assets (today's news suggests higher multiples, or was FL an exception?)
- Buying substantial assets would appear to be more important than investing in adjacent states?
- They are acquiring product/operational expertise that can be deployed across the existing portfolio. What functional holes need to be filled in, if any?
- Where can operational efficiencies be realized in the current portfolio?
- What is the MA and NJ conversion from medical to recreational opportunity?
- If you have any questions you would like to ask Mr. Sandelman, please email .
