AYRWF is a Hedgeye Cannabis Best Idea LONG.
There are several visible drivers of organic and acquisition-driven revenue growth over the next few years. The associated margins and cash flow should lead to years of compounding growth as the Company grows in new markets. Ayr Strategies is one of the most compelling organic and acquisitive growth strategies in our covered universe.
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Topics of discussion included:
- Jonathan Sandelman's background and the history of Ayr Strategies.
- Looking past the recent acquisitions, how will the company's focus shift to the other limited license and highly populated states of IL, MI, NY, and MD?
- What are the essential criteria for entering a new state like NY?
- Ayr has a relentless focus on quality businesses that generate a significant ROI. How has it been able to acquire companies at such attractive prices? 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 (was FL an exception or the new norm?).
- Buying substantial assets would appear to be more important than investing in adjacent states?
- Ayr is 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?
- How does the industry's outlook change with the Georgia election outcome?
