Ayr Wellness Restructures to Cut Debt in Half and Strengthen Growth Under New Ownership
Multistate cannabis operator Ayr Wellness is undergoing a comprehensive restructuring designed to reduce its debt load by more than half, streamline operations, and position the company for renewed growth under new ownership. This move, led by Millstreet Capital Management, represents one of the most significant financial overhauls in the cannabis industry in recent years.
The Boston-based investment firm and other senior note holders are leveraging their $387 million in credit to acquire Ayr Wellness’ assets and take ownership of the company. The restructuring, expected to conclude by December, aims to ensure Ayr Wellness remains a competitive force in a volatile and capital-strained cannabis market.
Debt Reduction and Financial Stability as Cornerstones of the Plan
According to interim CEO Scott Davido, the restructuring will not only reduce Ayr’s debt by over 50% but also stabilize its finances for long-term success. Debt holders are not simply acquiring the business—they are committing an additional $50 million to fund expansion in key growth markets such as Virginia, where Ayr plans to build retail, cultivation, and manufacturing facilities.
Davido emphasized that this move represents more than just a financial reshuffle. It’s an opportunity to reset and focus on sustainable growth. With more than 2,000 employees and $463.6 million in annual revenue, Ayr Wellness remains one of the largest operators in the U.S. cannabis industry, and leadership believes that this new structure will enable sharper execution and better market performance.
Narrowing Focus on High-Value Markets and Efficient Operations
As part of the restructuring, Ayr Wellness is streamlining its footprint to focus on the most profitable and strategically important markets. The company will prioritize operations in Florida, Ohio, New Jersey, and Pennsylvania, as well as retail outlets in Nevada and Massachusetts. These core markets are expected to form the foundation for the company’s next growth phase.
A November 10 auction will likely see the senior debt holders acquire Ayr Wellness’ cultivation, manufacturing, and retail assets across these states. However, Davido noted that the auction process could attract interest from other potential buyers seeking to capitalize on the opportunity to enter or expand within the cannabis sector.
In addition to these transitions, Ayr has already divested several assets, including:
Massachusetts: cultivation and manufacturing operations, and its Needham medical dispensary
Pennsylvania: three PA Natural retail stores and a cultivation site in Pottsville
Nevada: cultivation and processing facility
New Jersey: Lakewood cultivation facility
Connecticut: one retail location
The company’s four Illinois retail stores are pending sale approval by state regulators.
Industry Experts See the Move as a Reflection of Broader Market Challenges
Industry analyst Avis Bulbulyan views Ayr Wellness’ restructuring as part of a larger trend among multistate operators (MSOs) grappling with debt-heavy balance sheets, regulatory challenges, and shifting market dynamics.
According to Bulbulyan, the problem for many cannabis companies isn’t their assets—it’s how they’ve been managed. He believes the new owners must transition Ayr Wellness toward a consumer packaged goods (CPG) model rather than relying solely on license-based operations.
He added that the current environment presents opportunities for investors with available capital: “This is a distressed asset market right now, and anyone with cash is going to get a deal out of it. There’s nothing wrong with these assets—it’s about how they’re used.”
Restructuring Amid a Tough and Evolving Industry Landscape
The cannabis sector remains one of the most challenging business environments in North America. Companies face high operating costs, limited access to capital, and burdensome regulations, all while navigating fluctuating demand and pricing pressures.
Ayr Wellness’ restructuring mirrors a broader pattern across the industry, where companies are consolidating, divesting, or reorganizing to remain competitive. Davido compared the current phase to historic business cycles, citing the early 20th-century cereal industry as an example—when over 80 companies in Battle Creek, Michigan, consolidated down to just a few dominant players.
“We’re in the winnowing-out phase,” Davido explained. “A lot of companies have significant debt maturing in 2026. We wanted to be proactive—to position Ayr Wellness for stability and success before those pressures hit.”
Looking Ahead: Rebuilding Confidence and Market Strength
Ayr Wellness expects to finalize its restructuring by the end of the year, though the process involves a series of state-level approvals for license transfers and asset sales. Despite the administrative hurdles, the company remains optimistic that the transition to new ownership will proceed smoothly and allow operations to continue without disruption.
Once complete, the debt holders-turned-owners plan to oversee a leaner, more agile company focused on strategic markets and operational efficiency. The additional capital infusion will give Ayr the flexibility to invest in new facilities and technology to improve margins and scalability.
Davido emphasized that the new phase represents a fresh start, not an end: “We’re emerging stronger, more focused, and better capitalized. With the support of our new investors and a more sustainable structure, Ayr Wellness is ready to thrive in the next chapter of the cannabis industry.”
Bulbulyan agreed, noting that what’s happening with Ayr Wellness is emblematic of a broader maturation of the cannabis market. “This isn’t new—it’s just happening on a larger, more public scale,” he said. “The key now is for new owners to make the right strategic moves and unlock the real potential of these assets.”
A Path Toward Resilient Growth
The restructuring of Ayr Wellness marks a pivotal moment for the company and reflects the evolution of the cannabis industry at large. By halving its debt, consolidating operations, and bringing in committed new ownership, Ayr is setting itself up for long-term sustainability and growth in a maturing but still challenging marketplace.
As Ayr Wellness completes this transition, its success or failure could serve as a bellwether for other multistate operators navigating similar financial headwinds.
