Ayr Strategies joins other MSOs with proposed capital raise (AYRWF)
AYRWF is a Hedgeye Cannabis Best Idea LONG.
Ayr Strategies announced yesterday that it is commencing an overnight marketed offering of subordinate voting shares, restricted voting shares, or limited voting shares. In the past weeks, other MSOs like Curaleaf, Jushi Holdings, and Columbia Care have announced similar capital raises in light of the brightening outlook for the U.S. cannabis industry with the November elections and Democrats winning control of the Senate.
Speaking on the financing, Ayr's CEO Jonathan Sandelman commented, "This is an unprecedented time in the evolution of the cannabis industry. The 2020 election results will lead to accelerated regulatory changes at both the federal and state level and accelerated consolidation in the industry. Only those companies of scale will become the market leaders. As such, we want to be ready to make accelerated investments in our business. While our current plans are already fully funded, this offering will give us flexibility around our current plans and will allow us to be opportunistic in the fast-moving environment we expect going forward."
Several visible drivers of organic and acquisition-driven revenue growth over the next few years for Ayr Strategies. 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.
Last week, we hosted a Fireside Chat with CEO Jonathan Sandelman, where we discussed the company’s background, its recent acquisitions, and Sandelman’s investment philosophy, amongst other things.
|
CLICK HERE for event details (includes video, dial-in info, and materials link) |
TerrAscend expands cultivation in NJ; first indoor harvest expected Q1 2021 (TRSSF, CGC)
TerrAscend Corp. announced that it had completed the second phase of construction at its cultivation and manufacturing facility in Boonton, New Jersey. This construction phase added approximately 80,000 square feet of indoor cultivation to the existing on-site greenhouse and post-harvest manufacturing facilities, bringing the Boonton facility's total current footprint to approximately 140,000 square feet. TerrAscend has the ability further to increase the Boonton facility to 240,000 square feet. The company recently received approval from the NJ Department of Health to commence cultivation activities within the new indoor facility and expects to complete its first indoor harvests in Q1 2021.
Last month, Canopy Growth upped its ownership in TerrAscend from 13% to approximately 21% through a transaction with Canopy Rivers. With its investments in both TerrAscend and Acreage Holdings, Canopy Growth has clear visibility into the U.S. market.
GrowGeneration pre-announces Q4 above expectations and projects 2021 revenue will exceed $335M (GRWG)
GrowGeneration Corp., the nation’s largest chain of specialty hydroponic and organic garden centers with 39 locations across 11 states, reported its preliminary record full-year 2020 revenue of $192 million, versus $80 million for 2019, a YoY increase of 140%. As the company continues to outpace guidance, it increases its 2021 revenue guidance range to $335 million-$350 million.
Financial highlights in 2020 include:
- Full-year 2020 revenue rose 140% YoY to $192 million, versus $80 million for full-year 2019.
- Q4 2020 revenue rose 142% YoY to $61.5 million, versus $25.4 million for Q4 2019.
- Same-store sales were up 63% for full-year 2020 versus full-year 2019.
- Same-store sales were up 58% for Q4 2020 versus Q4 2019.
- A total of 14 new and acquired store locations in 2020, increasing locations nationwide to 39.
"We delivered strong shareholder value in 2020, with triple-digit revenue growth despite unprecedented challenges and an uncertain environment. This growth came through strategic acquisitions of best-in-class hydroponic stores, exceptional same-store sales growth, and the expansion of our omnichannel and private label offerings – a strategy we will accelerate this year," said GrowGen CEO Darren Lampert. "We expect significant revenue growth in the year ahead as we continue to execute on these initiatives. Accordingly, we have raised our 2021 revenue guidance to $335-$350 million, our 2021 adjusted EBITDA guidance to $38 million - $40 million, and increased the number of projected GrowGen store locations to 55."
The company made eight acquisitions in 2020, with five of them happening in Q4 2020. The company recently completed a $172.5 million raise to fuel continued growth in the post-election cannabis landscape. As legalization momentum continues to gain across the country, GrowGen, as an ancillary, non-plant touching company, has the opportunity to consolidate a highly fragmented industry poised to grow with the green wave.
