AYR Wellness Closes Final State Asset Transfers to Noteholders

AYR Wellness has completed the last round of its state-by-state asset transfers, handing its Florida, New Jersey, and Nevada cannabis operations to Arboretum Bidco LLC as the company’s court-supervised wind-down in Canada advances toward final dissolution. The closings were confirmed by AYR on June 2, 2026, covering the company’s Florida dispensary network, its New Jersey locations, and its Nevada stores. All required state regulatory approvals were obtained before any of the transfers closed, according to the company’s disclosure.

Arboretum Bidco LLC, the acquisition vehicle established by AYR’s senior secured noteholders to receive the company’s operating assets, will continue running the acquired locations under the “Ayr Wellness” trade name. The Canadian-listed holding company — CSE: AYR.A, OTCQX: AYRWF — is moving toward full dissolution once creditor distributions are completed in proceedings before the Supreme Court of British Columbia.

How the transfers were structured

The structure traces to a restructuring support agreement that AYR signed with its senior noteholders on July 30, 2025. Those noteholders held roughly 73 percent of AYR’s senior secured debt — notes bearing a 13 percent coupon — and agreed to extend a $50 million bridge loan to keep operations running while the restructuring was executed.

The numbers underlying that agreement explain why no standalone recovery was in reach. AYR’s public securities filings indicate the company was carrying approximately $410 million in total debt by early 2025, with quarterly interest obligations of around $20 million against cash reserves of just $35.5 million. The company’s first-quarter 2025 financials had not been filed.

In the fall of 2025, those lenders moved to foreclose on the collateral backing the unpaid debt. A public auction followed on November 10, 2025. No competing bid emerged. The noteholders submitted a credit bid — using their outstanding debt as the purchase price — and became the owners of the operating assets without committing additional cash. That mechanism is how secured lenders can convert unpaid debt directly into ownership, bypassing a conventional third-party sale.

The master purchase agreement executing those transfers was signed on November 14, 2025, covering assets across seven states: Florida, New Jersey, Nevada, Ohio, Massachusetts, Pennsylvania, and Virginia. AYR initiated the Canadian insolvency proceedings three days later in the Supreme Court of British Columbia, with KSV Restructuring Inc. appointed as court monitor and Blake Holzgrafe installed as interim chief executive of the corporate parent to oversee the wind-down.

The collapse and what it illustrates

AYR’s trajectory parallels the broader arc of cannabis multi-state expansion in the 2019–2021 window. At its 2021 peak, the stock traded above $40 per share as the company built out cultivation, manufacturing, and retail operations across limited-license states, financed by debt at a time when cannabis capital was readily available and public-market valuations supported the model.

That model depended on sustained capital market access and margins sufficient to carry the debt load it generated. Access contracted sharply from 2022 onward as the industry’s growth story intersected with a higher-rate environment and chronic profitability problems. The federal tax treatment that disallows ordinary business deductions for plant-touching cannabis operators compounded the pressure over time. By early 2025, AYR’s stock had lost more than 99 percent of its peak value, and the debt structure had become unpayable.

The restructuring support agreement signed in July 2025 was the formal acknowledgment that a standalone turnaround was not available. The credit bid and master purchase agreement that followed were the contractual endpoint of a loan structure where the collateral was the business itself — not a sale in the traditional sense, but a structured transfer of ownership from equity to debt.

What the handover looks like now

The state-by-state transfer is now complete. Ohio, Massachusetts, and Pennsylvania operations moved earlier in the process. Virginia transferred to a newly formed subsidiary ahead of the latest round; Arboretum also reportedly closed a $275 million refinancing package around the same period to fund operations across the inherited portfolio. Florida, New Jersey, and Nevada — all former AYR operations of material scale — have now followed, with Arboretum Florida LLC, Arboretum New Jersey LLC, and Arboretum Nevada LLC each receiving the respective operations.

Arboretum’s decision to retain the “Ayr Wellness” consumer brand reflects the practical value of established dispensary networks. The Florida footprint in particular — among the state’s larger vertically integrated cannabis operations — is a substantial retail asset, independent of what the listed parent entity was worth. Continuing under a recognized brand reduces friction with existing patients and retail customers.

The Canadian wind-down, supervised by KSV Restructuring, will handle remaining asset disposals and final distributions to creditors. Common shareholders are not expected to receive any recovery — the credit bid structure absorbed whatever enterprise value remained, with none of it passing through to equity.