Ayr Wellness recently entered into a definitive agreement to acquire two Herbal Remedies Dispensaries.
Herbal Remedies was among the first cannabis dispensaries licensed in the State of Illinois when the State approved the Compassionate Use of Medical Cannabis Program in 2013. Both medical and recreational use are now permitted.
Ayr intends to purchase 100% of the membership interests of Herbal, an operator of two licensed dispensaries in Quincy, Illinois, the county seat of Adams County, the western-most county in Illinois.
The terms of the transaction include consideration of $30 million, made up of $10 million in stock, $12 million in seller notes and $8 million in cash. Based on current projections, the Company estimates it is paying approximately 5x Herbal Remedies’ 2021 EBITDA. Herbal will add approximately 50 employees to Ayr’s total headcount.
Ayr Wellness Inc. is a vertically-integrated cannabis multi-state operator. With Illinois, Ayr Wellness will be operating in eight states.
The acquisition is subject to customary closing conditions and regulatory approvals. Operations of Herbal Remedies will remain unchanged pending the closing. The acquisition is expected to close in the fourth quarter of 2021.
“Today’s announcement represents the next step in our goal to position Ayr as a leading MSO, with a strong presence in states that deliver meaningful revenue. Illinois will become the eighth state in our expanding footprint, which now reaches close to 85 million people,” said Jonathan Sandelman, Chairman and Chief Executive Officer of Ayr Wellness. “The total cannabis market in Illinois is already run-rating at $1.8 billion in annual sales, despite adult-use launching only 18 months ago. The team at Herbal Remedies has done a tremendous job in Quincy, building a fantastic business and a strong reputation for excellent customer service and merchandising – exactly what we at Ayr Wellness look for in a partner when entering a new market. We look forward to working with the Herbal team as we continue to build our presence in the Illinois market.”