Ayr Strategies Inc. (OTCMKTS:AYRSF) performed exceptionally well in June, with revenue expected to increase 14% to $12.7 million over the monthly average in Q1 2020. Equally, Ayr expects to record EBITDA for June of around $5.0 million, which is an increase of 80% over the monthly average in Q1.
The company expects Q2 2020 revenue to be around $28.4 million, which is a 15% drop from sequential-quarter partly due to COVID-19 linked closures. Although there was a drop in revenue, Ayr expects its adjusted EBITDA for the quarter to increase 8% sequentially to around $9.1 million. Most of the contribution to the increase in EBITDA is due to the exceptional performance in June. Ayr also enhanced its balance sheet with cash growing to $16 million at the end of June, relative to $9.9 million at the end of March 2020.
Regulatory restrictions in paused a challenge for Ayr
Jon Sandleman, the CEO of Ayr, stated that although there were numerous challenges in the quarter, the preliminary results indicate that the business is still strong. He explained that at the beginning of April, the company’s revenue dropped to zero because of regulatory restrictions in Massachusetts and Nevada.
Medical dispensary sales in Massachusetts increased 76% in June even though recreational retail dispensaries reopened in late May. In Nevada, recreational sales have continued to grow, and in June, they were up 5%. The CEO confirmed that in Massachusetts, the company sold 65% of its inventory in a market where they usually sell all that they produce. Sandelman said that they have enough inventories going into the summer for the recreational market. Operating dispensaries in the state have increased 25%, and the company supplies 82% of the dispensaries.
Also, the expansion of cultivation in Nevada had a significant impact on the company’s gross margins. The company has completed the expansion of a 17,000 sq. ft. facility in the state.