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Ayr Wellness Inc. (CSE: AYR.A, OTCQX: AYRWF), a leading vertically integrated U.S. multi-state cannabis operator (MSO), and constituent in the munKNEE Pure-play MSO Pot Stocks Index reported its Q1, 2022, financial results for the three months ended March 31, 2022, today, as follows:

Unless otherwise noted, all results below are presented in U.S. dollars and compared with the previous quarter.  

Q1 Financial Highlights

• Revenue: decreased 0.5% to $111.2M
• Adj. Gross Profit: decreased 8.5% to $57.9M
• Operating Loss: increased 51.8% to $(21.1)M
• Adj. EBITDA: decreased 25.3% to $19.5M
• Adj. EBITDA Margin: declined 580 bps to 17.5%
• Cash on Hand: $78.7M

Q1 Operational Highlights

• Opened 2 dispensaries in Florida
• Closed acquisition of Cultivauna, LLC, the owner of Levia branded cannabis-infused seltzers and water-soluble tinctures
• Signed a consolidating management services agreement with Tahoe Hydroponics and NV Green, Inc.
• Secured a $26.2 million mortgage loan at a 4.625% interest representing the first monetization of Ayr’s $180 million real estate portfolio

Management Commentary

Jonathan Sandelman, Founder, Chairman, and CEO of Ayr, said:

• “We have made excellent progress this year to complete major CAPEX projects which has temporarily reduced our operating margins. We will now unlock the revenue streams from these various assets going forward which we expect will put our forward earnings power in a much stronger position and anticipate improvements to both our top and bottom line in the second half of 2022 as these assets come online and begin to ramp.
• Q1 was a challenging period for the industry but we have maintained - or even increased - retail market share across most of our footprint despite this challenging backdrop, while also increasing wholesale revenue.
• The foundation for our business is set, and the investments we have made into our people, our customers, our technology infrastructure, and our retail and cultivation processes are now set to bear fruit. It has been a long journey that has required incredible patience, but as our assets turn on and ramp in Q3 and Q4, we believe we are at the inflection point we’ve been planning for the past 18 months.”

Outlook 

The company anticipates:

• an annualized run-rate of $250 million of Adjusted EBITDA,
• $100 million of operating income and
• $800 million of revenue

for Q4 2022.

Stock Performance

Ayr's stock price is UP 34% so far today from its near 52-week low of last Friday but remains DOWN 9% from the end of April, DOWN 56% YTD, and DOWN 82% from its peak in 2021.