Arizona acquisition agreement signed (AYRWF)
AYRWF is on the Hedgeye Cannabis Best Idea Lista s a LONG
Yesterday Ayr Strategies (AYRWF) signed a definitive agreement to acquire the membership interests of Blue Camo. On November 4th Ayr Strategies announced its intention to purchase the vertically integrated Arizona operation. Blue Camo has three dispensaries in the Phoenix area, a 10k sq. ft. cultivation and processing facility, and an 80k sq. ft. cultivation facility under development. Ayr Strategies paid a total of $75.4M up front, consisting of $9.5M in cash, $28.5M in seller notes, and $37.4M in stock that does not include additional earn-out targets.
Arizona has the third-highest medical patient penetration at 3.8%. Cannabis sales are close to $1B in medical sales. The state has already approved 90 locations despite beginning the approval process for adult-use applications last week. Ayr Strategies is acquiring three Oasis branded dispensaries that are in the 90 approved. Ayr Strategies has recently entered into several transactions bringing the company into Florida, New Jersey, Pennsylvania, Ohio, and Arizona, as seen below.
For a replay of our AYRWF Best Idea, Long Black Book, CLICK HERE.
FFNTF GETS REC APPROVAL IN MA
FFNTF is on the Hedgeye Cannabis Best Idea as a LONG
On January 25, 2021, 4Front Ventures Corp. (FFNTF) issued a press release announcing that it received approval from the Brookline, Massachusetts Planning Board to start constructing a new Mission branded dispensary. The location will initially serve adult-use customers and is on track to open in Q2 2021. 4Front's new dispensary will be located at 1024 Commonwealth Avenue in Brookline. The location will serve the Brookline, Allston corridor, a vibrant community within the wider Boston University and Boston metropolitan area. Mission Brookline will carry a full line of 4Front's high-quality, adult-use cannabis brands and products, including flower, extracts, edibles, and vapes. Adult-use customers will be able to browse live inventory, place online orders, and pick up orders in-store. Previously, 4Front received approval for adult-use cannabis sales at its Mission facilities in Georgetown beginning in August 2020. Shortly thereafter, the Company’s Mission dispensary and cultivation/processing facilities in Worcester, Massachusetts, were granted authorization to commence adult-use retail and production operations in September 2020.
SOME QUESTION MARKS AND HOPE
Some seem to be holding out hope that Congress will include language from the SAFE Banking Act in the upcoming coronavirus-relief package that the Biden administration and congressional Democrats will try to pass. Notably, the legislation would enable financial institutions to serve the state-legal cannabis industry without fear of federal sanctions. Unfortunately, SAFE Banking language was included in a separate coronavirus-relief bill that failed to gain final approval last year and appears to be a non-starter in the current package. Not losing sight of other potential incremental wins that could be realized, even if Congress falls short in this round:
- A reinstated the Cole Memo and other DOJ guidance memos rescinded by former Attorney General Jeff Sessions in 2018.
- They can approve a stand-alone bill prohibiting the DOJ from using federal funds to interfere with implementing any state medical or recreational cannabis laws.
Other potential catalysts are the likelyhoood that five or six go recreational: Connecticut, Maryland, New Mexico, New York, Rhode Island, and Virginia.
