CAN (ON): Company to carry out merger agreement with an Ohio-based grower

Ayr Strategies has moved to a Definitive Merger Agreement with the management company of Parma Wellness Center. The Merger Agreement is subject to approval by the Ohio Department of Commerce.

Ayr intends to purchase 100% of the membership interests of the management company of Parma and associated real estate for total purchase consideration of US$17 million in cash. The purchase consideration will be allocated as $13 million for the management company interests and $4 million for real estate.

Speaking on the Parma acquisition, Ayr’s CEO Jonathan Sandelman commented, “Ohio will be the fourth state in our key Eastern cluster. Ohio, while behind Pennsylvania and some other medical markets in terms of patient penetration due to a more limited set of qualifying conditions, is a state with a population of almost 12 million people and only 19 level 1 cultivation provisional licenses (the largest canopy license). As the market expands and develops over the coming months, we expect demand to grow significantly and we look forward to bringing our cultivation and processing expertise to the market to improve patients’ access to quality cannabis.”

Parma holds a provisional level 1 medical cannabis cultivator license, with initial construction plans for 25,000 ft2 of canopy inside a 58,000 ft2 building. Following the closing and completion of the initial phase of the level 1 cultivation facility build-out, Ohio law provides Ayr flexibility to further expand canopy space subject to the approval of the Ohio Department of Commerce. The transaction is expected to close in the first quarter of 2021, subject to customary conditions and required regulatory approvals, including the Ohio Department of Commerce.