The acquisition of Chicago marijuana retailer Dispensary 33 went up in smoke amid a cash crunch caused by a steep decline in cannabis stocks and a sharp increase in interest rates.
Miami-based Ayr Wellness said Jan. 27 it’s not going to complete the $55 million acquisition of D33, a popular independent marijuana retailer. The deal was announced in November 2021, about a year after Ayr went public. The company’s stock peaked at $36.54 in February 2021 but now trades at $1.29 per share. That spelled disaster for a deal that was to be paid mostly in stock. Cannabis stocks have been struggling for more than a year but suffered further declines after the SAFE Banking Act failed to pass Congress.
“The cannabis market has changed significantly in the 15 months since we agreed to acquire Dispensary 33,” Ayr President David Goubert said in a statement. “Both parties have acknowledged this reality and engaged in good-faith dialogue as we came to the mutual decision to terminate the proposed arrangement.”
It’s the second time an acquisition of a Chicago company has been scuttled by changing fortunes in the industry. Not only is there a broad-based market correction, but cannabis is particularly volatile because the