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New York City-based Ayr Wellness will officially enter the Illinois cannabis industry with the recent announcement of their intentions to purchase Herbal Remedies Dispensaries of Quincy, Illinois. Pending state regulatory approval, the acquisition is expected to be complete by late 2021.
“The team at Herbal Remedies has done a tremendous job in Quincy, building a fantastic business and a strong reputation for excellent customer service and merchandising – exactly what we at Ayr Wellness look for in a partner when entering a new market. We look forward to working with them as we continue to build our presence in the Illinois market,” said Jonathan Sandelman, Chairman and Chief Executive Officer of Ayr Wellness, in a press release.
Ayr Wellness is vertically integrated, owning both dispensary and cultivation operations in eight states. Their national footprint includes Arizona, Florida, Massachusetts, Nevada, New Jersey, Ohio, Pennsylvania, and now Illinois.
Herbal Remedies owners Bob Lansing and Christine Wildrick accepted an offer of $30 million, consisting of $10 million in stock, $12 million in seller notes, and $8 million in cash. This amount is five times the company’s 2021 EBITDA value (or earnings before interest, taxes, depreciation, and amortization). Lansing, 72, and Wildrick, 60, cite the desire to retire as the driving force behind selling the local & independently owned business.
“Bob and I have devoted the past seven and a half years growing and operating Herbal Remedies. During that time, we put much of our personal lives on hold and made Herbal Remedies our focus. We both are looking forward to doing more of the things we enjoy, such as hunting, fishing, traveling, and spending more time with family and friends,” said Wildrick.
Another significant factor in the decision was how Herbal Remedies could progress moving forward. It is challenging for independently owned dispensaries to succeed in the Illinois cannabis industry without vertical integration. A vertically integrated cannabis company means they own both cultivation operations and retail locations. This model allows the selling of Illinois-grown cannabis products to in-state-owned dispensaries at significantly reduced rates than what independently owned dispensaries can receive. Often, these savings get passed on to consumers in the form of more affordable cannabis products and enhanced services. Although Ayr Wellness doesn’t currently own any cultivation operations in Illinois yet, it is something the company is actively pursuing.
In acquisition negotiations, representatives with Ayr Wellness have expressed interest in not making any significant changes at Herbal Remedies in the immediate future, including retaining its more than 50 employees. Herbal Remedies opened its 4440 Broadway medical dispensary in Quincy, Illinois, in November 2015. That location started serving adults 21+ years of age beginning January 2020, followed by opening a second recreational dispensary location at 1837 Broadway in August 2020.
In 2021, Herbal Remedies was named one of Illinois’s best dispensaries by Leafly, a leading cannabis news and educational website. Marijuana Venture magazine is publishing an article featuring the dispensary in their publication’s upcoming issue as well.
“Bob and I feel very good about our decision to sell to Ayr Wellness. They have an upstanding reputation within the cannabis industry, and we are confident they will build on what we have started,” Wildrick added in closing.
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