Is AYR Wellness the Marijuana Stock You’ve Been Waiting For?
The marijuana industry continues to remain a hot sector in 2021, and the recent US elections gave a further boost to the industry when the dialogue began about decriminalizing marijuana at the federal level. The expectation of new banking rules and regulations for cannabis operators has stimulated the industry’s growth even further. Following this chain of events, many leading cannabis companies have started gaining value and AYR Wellness (previously AYR Strategies) is one of them. But is AYR Wellness the Marijuana Stock You’ve Been Waiting For?
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AYR Wellness (AYRWF) is a Toronto-based cannabis company mainly focusing on the fast growing US cannabis market. Last year it had made a few strategic acquisitions that grabbed investors’ attention. Most importantly, the stock has gained more than three times since June 2020 and therefore is eligible for being one of the top picks for marijuana stock investors at this time. The stock was trading at $17 on August 31, 20202, and is now trading at [stock_market_widget type=”inline” symbol=”AYRWF” template=”basic” color=”default”].
AYR Wellness: King of Acquisitions
Mergers and acquisitions are pretty common these days and especially so in the cannabis industry. AYR Wellness has followed this strategy in 2020 and has made a string of acquisitions.
One of its best acquisitions was that of Liberty Health Sciences Inc which it made last December for $290 million. This acquisition lets AYR Wellness enter the booming Florida cannabis market and gain access to about 300,000 sq. feet of cultivation space and 28 dispensaries across the state.
By the end of this year, the total number of dispensaries are expected to total out at 42. Florida, the sunshine state, has the potential of becoming the biggest marijuana market in the US and therefore this move can prove to be a turning point for the company.
Another notable one was the acquisition of 100% membership interest in CannTech, a licensed operator belonging to the Pennsylvania region for $57 million. Pennsylvania is yet another emerging market for marijuana and this acquisition has let AYR Wellness gain access to a 143,000 ft cultivation space. Harvesting operations are expected to begin from March 2021 and it seems this one will also contribute to the boom in its revenues.
AYR’s Strong Financials
Although the demand for cannabis continued to remain high during the pandemic, the cannabis industry still had to face several challenges because of the country-wide lockdowns imposed. It was found many of the big cannabis giants had to succumb to losses and profits in that industry were pretty elusive. However, AYR Wellness has performed well despite all adversities.
AYR’s revenue for the third quarter had increased by 61% compared to last quarter and over 42% compared to the same period of last year. Adjusted EBITDA had also more than doubled. Due to its excellent performance, it was able to generate over $13 million in cash and by the end of the third quarter, its cash reserve stood at a balance of $23 million thereby indicating high liquidity.
It seems the string of acquisitions it had made last year are proving to be successful and are contributing to the high profits of the company. Also, looking at its high cash reserve and the latest news about its share issue, it looks the company won’t have a dearth of capital expenditure for future expansions and can continue with its acquisition spree. If the situation stays favorable in the future, expect much improved results from AYR Wellness.
Bottom Line: Is AYR Wellness the Marijuana Stock You’ve Been Waiting For?
The cannabis industry is going through one of the best phases. The industry is witnessing new heights post the recent US elections with the government’s efforts to boost the industry. It is expected the legal marijuana market in the USA might reach $73.6 billion by 2027 thereby indicating a huge TAM opportunity for the industry participants.
AYR Wellness is looking at a string of acquisitions in the US market and thereby getting hold of maximum possible market share. This strategy seems to be working fine for the company and its rising revenue graph is pointing towards to the same.
For these reasons, we believe AYR Wellness is the Marijuana Stock you’ve been waiting for. Consider adding this to your marijuana stocks watchlist.
Is AYR Wellness the Marijuana Stock You’ve Been Waiting For?
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