Ayr to purchase Garden State Dispensary for $101M

Canadian cannabis company Ayr Wellness Inc. will purchase Garden State Dispensary – with retail locations in Woodbridge, Eatontown and Union  – for $101 million, following a letter of intent previously announced on Dec. 22, 2020.

The companies announced their purchase agreement on March 29. In a deal expected to close in the third quarter of 2021, Ayr will purchase 100% of the equity interests of GSD, one of the 12 existing vertical license holders in New Jersey and one of the state’s original six alternative treatment centers.

Along with GSD’s three dispensaries is a 30,000-square-foot facility that houses existing cultivation and production facilities in operation, with an additional 75,000-square-feet currently under construction. Ayr expects to retain GSD’s current 110 employees.

“With its recent adoption of adult-use, New Jersey will be a leading force in the Northeast cannabis market. We look forward to serving the Garden State’s medical cannabis patients and working with the regulators to ensure a safe and robust roll-out of the adult-use program,” said Ayr Chief Executive Officer and Chairman Jonathan Sandelman in a prepared statement. “We see an incredible opportunity to drive growth at retail with the introduction of our quality cannabis brands, expanded product offerings and exceptional in-store experience. Additionally, we see an excellent opportunity for wholesale growth given our planned cultivation expansion and past success at driving wholesale penetration in supply-constrained markets.”

The price tag includes $41 million in cash, $30 million in stock and $30 million in the form of promissory notes. Earnout payments pursuant to the purchase agreement will be capped at a maximum of $96.75 million and payable in a combination of cash, promissory notes and exchangeable shares.

The acquisition is subject to customary closing conditions and regulatory approvals.