The following is a summary of the Ayr Wellness Inc. (AYRWF) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Q3 revenue was $114.3 million, a decrease of 2.5% compared to the previous quarter and remained flat year-over-year.

• Gross profit for Q3 was $43 million, showing a decrease of 9% and 11% compared to the prior quarter and prior year, respectively.

• Adjusted EBITDA for the quarter stood at $26.1 million, aligning with the previous quarter but falling $2.3 million short of last year.

• Adjusted gross margin slightly increased by approximately 100 basis points sequentially to 52.8%.

Business Progress:

• Ayr has plans to expand its footprint in Ohio targeting to operate eight branded stores by the first half of 2025.

• The company received a conditional license to operate a vertically integrated operation in Virginia, with plans to build dual-purpose cultivation and retail facility, and five satellite retail locations.

• Ayr has also received a license in New York, marking future potential expansion and growth.

• Plans to further streamline and cut costs due to non-realization of adult-use cannabis in Florida.

Opportunities:

• Expansion in Ohio and new facilities in Virginia represent significant opportunities for market growth.

• Recent regulatory approvals in Virginia and license acquisition in New York potentially open lucrative markets.

Risks:

• Continued market saturation and price compression in key markets including New Jersey and Florida pose risks.

• Potential setbacks and lengthy regulatory processes in new markets such as Virginia could delay profitability.

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