Ayr Wellness Inc. (OTCQX: AYRWF) is reporting financial results for the third quarter ending September 30, 2021 with revenue rising 111% to $96.2 million, which was a sequential increase of 5%. Ayr Wellness also reported a net loss of $3.3 million, which was a bit higher than last year’s net income of $620,373. The earnings per share were ($0.06), which beat the Yahoo Finance Average Analyst estimate for earnings of ($0.15). Ayr Wellness delivered a US GAAP operating loss of $8.9 million which included non-cash, one-time expenses, and non-operating adjustments totaling $34.9 million.

Ayr Wellness is also revising its 2022 adjusted EBITDA guidance to a range of $250-300 million, which the company said reflected delays in capital projects. The company is also feeling the pain of a volatile wholesale market and said that if these issues continue into 2022, it could also impact planned guidance.  The company is reiterating its target for 2022 revenue of $800 million. The company is also forecasting fourth-quarter revenue growth of over 10% sequentially. Adjusted EBITDA is expected to remain roughly flat sequentially, as the company continues its investments in branding, new markets, and growth projects, and the centralized corporate resources to support growth.

“We are pleased to report another great quarter of growth at Ayr, more than doubling our revenue from last year’s third quarter and up 5% sequentially in a flat cannabis market,” said CEO Jonathan Sandelman. “We have been able to maintain or grow share in competitive markets with pricing discipline because, by design, we have focused on quality and consumers continue to show a willingness to pay for quality. As we’ve said, again and again, we seek to be the largest scale cultivator of high-quality cannabis in the United States. First and foremost, this is because we want to produce the best product for our customers. But also, because quality serves as a mitigant to pricing pressure that can result from supply and demand imbalances. Quality matters.”

Gentle Ventures Acquisition

Ayr also announced it was buying Illinois-based Gentle Ventures also known as Dispensary 33 in a deal valued at $55 million. The company owns and operates two licensed retail dispensaries in Chicago, Illinois, one in the Andersonville neighborhood and the other in West Loop. The deal consists of $55 million upfront, including $12 million in cash, $3 million sellers notes, and $40 million in stock. An earn-out is payable if certain EBITDA performance is achieved through Q3 2022. The acquisition is subject to customary closing conditions and regulatory approvals. This will increase the company’s footprint in Illinois to five stores.

New Branding

“Today we are unveiling our new corporate, retail and CPG brands which represent the next phase in the evolution of our company. These brands are designed to represent the quality of what’s inside the box. Our portfolio of power brands, which consists of Kynd premium flower, Origyn Extracts, Stix Pre-Roll Company, and (on closing) Levia, reflects the very best of cannabis and represents leading market categories for current and future consumers. We’re also unveiling a collection of core brands to offer variety in form, dose and experience. These core brands address a broader audience in those same power categories,” Mr. Sandelman continued.

“Lastly, we are unveiling our updated Ayr retail concept. We have built this retail concept very intentionally for the experience in our stores to reflect the quality of our products and our commitment to our local communities. At Ayr, we are committed to thinking long-term. We will continue to invest in our quality and our brands. We understand that brand building in this industry is still in its early stages but the reason that we’re committed to this path is because we know that great products and great brands create their own categories and consumer segments,” Mr. Sandelman concluded.