Ayr Wellness cuts Illinois out and doubles its efforts in Florida – MEDCAN24

Ayr Well-being (CSE AYR.A; OTCQX AYRWF), a cannabis company, is now faced with a difficult decision about how to invest its money.

Steven Cohen, the Interim CEO, announced that during the earnings call of the Company on Thursday the company will be leaving Illinois. The company has signed a Letter of Intent to sell the four retail locations in Illinois.

George DeNardo recently promoted Ayr president said: “We will be looking closely at other markets in order to prioritize those that are most important for the business.”

Cohen described the industry as having a “tough business,” marked by pricing compression, regulatory setbacks, and rising costs. The $164.2-million loss was due mainly to writedowns, after Florida voters rejected the recreational use of marijuana last November.

The company has decided to double down on Florida rather than withdraw from the state, which is home to approximately 70 percent of Ayr’s retail network. DeNardo referred to the company’s planned indoor cultivation center in Ocala as “one of its most important catalysts for this year.”

Ocala’s facility will address a long-standing weakness of Ayr Florida, the lack of high quality indoor flowers. DeNardo elaborated that “it’s been an lagging product format we’ve really had over the past few years since Ayrs’ conception.”

The new facility will more than double Florida’s capacity for flower production.

DeNardo stated, “I believe it is something that can help us in the current market price pressure due to increased competition. It will also allow us to increase foot traffic inside our store.”

Across its remaining core markets – Florida, Massachusetts, Nevada, New Jersey, Pennsylvania and Ohio – Ayr is consolidating operations and cutting costs. It is closing down a second cultivation site in Nevada. In Massachusetts it has sublet the original medical cultivating facility.

Ayr’s wholesale sales grew by 20% in the past year, and its key brands Kynd, Haze, and Later Days grew 126%. Ayr will now “roll out comprehensive brand tools” to its entire footprint in order to keep up the momentum.

Ohio is a brighter spot following its transition to adult-use sales, with retail revenue up 41% quarter-over-quarter. The company plans to open three additional adult-use stores this year. It opened its fourth store in February.

Cohen, who acknowledged the downturn in the industry and referenced Jim Valvano famous slogan “Survive and Advance” to describe Ayr’s approach.

Cohen insisted that the industry would survive and grow. He added, “I am convinced this is a remarkable business and Ayr will play a major role.”

Ayr no longer tries to be everywhere all at once.