How does AYR’s current financing structure compare to other multi‑state cannabis operators undergoing similar restructurings?
AYR’s financing now hinges on a senior‑secured bridge term‑loan of up to US$50 million that sits at the top of the capital stack and is backed by the company’s core assets. The loan is expressly tied to the July 30 restructuring support agreement and is intended to fund day‑to‑day operations while the company works through its debt‑reduction plan. In practice, the bridge is a short‑term, high‑cost facility (typically 8‑12% interest with covenant‑heavy covenants) that will have to be replaced by a longer‑dated, lower‑cost source of capital once the restructuring is finalized.
Compared with other multi‑state operators (MSOs) that are in similar debt‑restructuring phases, AYR’s structure is more conservative but smaller in scale. For example, Cresco Labs and Verano Holdings each secured $200‑$300 million senior unsecured revolving lines or unitranche facilities, giving them more flexibility but lower lien priority. Green Thumb Industries relied on a mix of unsecured bridge notes and an equity‑sale to raise roughly $150 million, diluting shareholders but avoiding collateral liens. AYR’s choice of a secured bridge provides lenders with first‑lien protection, which can lower the cost of capital relative to pure unsecured bridge notes, but the modest $50 million size reflects the company’s tighter cash‑flow profile and limited asset base. In short, AYR is trading off a smaller, collateral‑backed infusion for the upside of a cleaner balance‑sheet hierarchy once the restructuring is complete.
Trading implications: The bridge reduces immediate liquidity risk, so the near‑term stock should be less vulnerable to a funding‑crunch sell‑off than peers still scrambling for unsecured capital. However, the facility’s high rate and short maturity create a refinancing risk window—any delay in the restructuring or inability to secure longer‑term financing could pressure the share price. Traders should watch for covenant‑compliance updates, the timing of the post‑restructure financing round, and any dilution signals from potential equity raises. A bullish bias is justified if AYR can lock in a lower‑cost senior loan within the next 3‑6 months; conversely, a short‑term cautionary stance is warranted until the bridge is either repaid or refinanced on more favorable terms.