UPDATE: Ayr Wellness Enters the Cannabis-Infused Beverage Market with Proposed Acquisition of Levia

Ayr will purchase 100% of the equity interests of Cultivauna, LLC (Levia) for $20M upfront ($10M cash, $10M stock) and an additional $40M in earn-outs based on 2022 & 2023 Revenue targets

Ayr Wellness has announced that it has entered into a binding letter of intent to acquire Cultivauna, the owner of Levia branded cannabis infused seltzers and water-soluble tinctures.

“Ayr wants something exciting to offer every cannabis consumer of today and the future cannabis customer of tomorrow. Infused beverages, done right, will be game changing to the mainstreaming of cannabis in the U.S., providing an approachable and sessionable form factor to new and existing customers. The acquisition of Levia brings Ayr into this rapidly growing segment with delicious, market-leading infused seltzer. We are excited to have Levia join Kynd premium flower and Origyn extracts in Ayr’s suite of premier national brands. With a formula that provides consistently great flavor and zero calories in an infused beverage experience, we believe Levia has enormous potential as an alcohol alternative. In just six months since its initial launch in Massachusetts, Levia has become the top selling THC beverage. As we finalize our updated national brand portfolio to address all segments and form factors, Levia will play a marquee role in each market where we operate.” said Jonathan Sandelman, CEO of Ayr Wellness

Ayr intends to purchase 100% of the equity interests of Cultivauna, LLC. The terms of the transaction include $20 million in upfront consideration, made up of up to $10 million in cash with the remainder in stock. An earn-out payment of up to an additional $40 million will be paid in shares based on the achievement of revenue targets in 2022 and 2023.

Levia Cannabis Infused Seltzers provide for rapid onset of the effects of THC, typically 15-20 minutes, allowing for a more consistent consumption experience than many edible products. Levia is currently available in Massachusetts in three experiences and flavors:

  • “Achieve” Raspberry Lime (Sativa)

  • “Celebrate” Lemon Lime (Hybrid)

  • “Dream” Jam Berry (Indica)

Each flavor is available in 12-ounce slim cans and contains 5 mgs of THC. Levia is also available in water soluble tinctures in the same formulations.

The acquisition is subject to customary closing conditions and regulatory approvals, as well as the execution of a binding definitive agreement. The acquisition is expected to close by the end of 2021.

Transaction Multiple: ~3.33x run-rate revenue (upfront) and ~10x run-rate revenue (assuming full payment of earn-out)

  • Based on $1M in June Sales at Retail from BDSA, assume $500K in Wholesale revenue with a 100% mark-up

  • northshore reported that LEVIA totaled $847,010 (implies 18% growth from May to June figure of $996,560) in sales for the month of May. With competitors Hi-5 coming in second with $146,397 in sales and Cann in third with $50,540. This makes LEVIA the number one selling cannabis beverage in Massachusetts for the fourth consecutive month

  • As of May 2021, LEVIA was sold at ~70 dispensaries

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