With the meme stock trend in full effect and electric vehicles getting so much attention, sometimes it feels as if cannabis cultivators like Ayr Wellness (OTCMKTS:AYRWF) are getting left behind. That’s a shame because there’s plenty of upside potential with AYRWF stock.
InvestorPlace contributor Josh Enomoto actually included Ayr Wellness in his recently published list of the seven best cannabis stocks to buy for the second half of 2021.
That list is a must-read, and it really got me thinking about AYRWF stock. The company’s definitely in expansion mode, so why isn’t the stock price higher?
I have a funny feeling that it will be higher soon as the market comes to appreciate Ayr Wellness’ value proposition. Until then, investors can grab some shares and keep an eye on the company as it’s a cannabis-market up-and-comer worth watching.
A Closer Look at AYRWF Stock
AYRWF stock commenced trading under that ticker symbol on the over-the-counter (OTC) markets, in early December 2020. At that time, the share price was slightly above $20.
A price surge ensued during the next couple of months. The bulls cheered, no doubt, as the stock catapulted to a 52-week high of $37.50 on Feb. 10, 2021.
However, AYRWF stock was unable to hold that level. The share price dropped below $30 in April and stayed there for the next couple of months.
As of June 14, the stock was trading at $28 and change. Is this relatively low price point a reflection of how the company is doing?
Not necessarily. There are encouraging developments happening with Ayr Wellness, and it’s entirely possible that they’re not fully reflected in the AYRWF stock price.
And, this presents an opportunity as any mismatch between the company’s true value and its share price isn’t likely to last for much longer.
Best-in-Class Cultivation Facilities
If a company is in the business of growing cannabis, the heart of the operations will likely be its cultivation facilities.
Ayr Wellness features three of them in the company’s investor presentation. The stats are impressive:
- 50,000-square-foot cultivation facility in Milford, Mass., which produces a wholesale revenue capacity of more than $5 million per month, and average production yield exceeding 70 grams per square foot
- 143,000-square-foot cultivation facility on a 13-acre site in Warrendale, Penn., which includes five flower rooms under an initial construction plan, with expansion to up to 15
- 53,000-square-foot cultivation facility in Sparks, Nev., which produces over 12,000 pounds of biomass annually; the company also has a 20,000-square-foot processing facility in Las Vegas
That’s a whole lot of square footage and production capacity. Ayr Wellness also has a deep talent pool consisting of around 1,580 employees.
Raking in the Revenues
In other words, this company has both the facilities and the workforce to emerge as a cannabis cultivation leader.
But, does all of this translate into robust revenue generation? You bet it does.
I’ll let the data do the talking here. During the first quarter of 2021, Ayr Wellness raked in $58.4 million in revenues, marking a whopping 74% year-over-year increase.
Moreover, the company recorded first-quarter adjusted EBITDA of $18.4 million on a U.S. GAAP basis. That figure represents a mind-blowing 136% year-over-year improvement.
Also during the first quarter, Ayr Wellness closed on its acquisition of Liberty Health Sciences.
With that, the company added 42 sited retail dispensaries, thereby creating the fourth-largest niche footprint in Florida (according to Ayr Wellness).
The Bottom Line
Clearly, Ayr Wellness is a company in growth mode. The company has expansive cultivation facilities and demonstrates strong revenue growth.
Therefore, AYRWF stock ought to be significantly higher in price – and probably will be, sooner or later.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.