A Florida-based pot giant is planning to purchase a pair of popular Chicago weed stores in a blockbuster $55 million deal, sources told the Chicago Sun-Times on Sunday.
Dispensary 33’s two shops in Uptown and West Town are being sold to Miami-based Ayr Wellness, which grows and sells cannabis across multiple states and trades publicly on the Canadian Securities Exchange and the U.S. “penny stocks” market. A public announcement was expected Monday morning.
The terms of the deal include $40 million in stock, $12 million in cash and $3 million in seller’s notes, according to a source close to Ayr. The move comes four months after Ayr announced plans to establish a foothold in Illinois with a $30 million acquisition of two Herbal Remedies Dispensaries in downstate Quincy.
As with that deal, Ayr needs regulatory approval to take over the Chicago stores.
Bryan Zises, Dispensary 33’s co-owner, had prided himself as the last independent pot shop operator in the city after a wave of corporate consolidation swept through Illinois’ booming cannabis industry when the drug was fully legalized.
In an interview Sunday, Zises said Dispensary 33 previously passed up offers from about a dozen multi-state cannabis firms before deciding to sell to Ayr, which he lauded for its financial acumen and focus on cultivating both talent and high-quality cannabis.
“This offer that we’ve accepted wasn’t the highest price, but it was the best fit for what we believe is in the best interest of the people that work for us and for the city as a whole,” Zises said. “We did not think that we would find a partner who was a good fit, and so we were prepared to go it alone for as long as necessary. But this was really a partner who made us feel very comfortable about their approach and what they want to do.”
Dispensary 33’s first store, at 5001 N. Clark St., opened its doors in December 2015 as Chicago’s first medical cannabis dispensary. It also made the first recreational weed sale last January, marking the end of the state’s prohibition on pot.
In addition to allowing medical dispensaries to also sell recreational weed, the legalization law gave existing operators the chance to score additional licenses for adult-use sales. Dispensary’s 33’s second shop, at 1152 W. Randolph St., opened in May.
While Zises noted that he and his management team plan to continue running the stores for six months after the deal closes, he said his staff won’t be affected by the change in ownership and will hopefully get “more responsibility” under Ayr’s vast corporate structure.
“One of the concerns that we had is that there’s limited opportunity if we’re just a mom-and-pop shop for awesome people to grow,” he said. “Now that there’s a larger corporate entity that has multiple states and is growing so fast and doing so well, I actually think that this is going to have a really good impact on our staff.”
The source close to Ayr later told the Sun-Times the “talent acquisition piece is huge.”
“When we’re looking to acquire companies, we’re not just looking at it in terms of assets and numbers and things like that,” the source said. “People and talent are really, really important to us. We want to work with companies that have similar values to us.”
While the two sides were complimentary Sunday, they’ll likely soon be competitors.
Zises acknowledged he’s also a minority owner of Green & Bransford LLC, a group that won five dispensary permits during three recent lotteries. Though the licenses haven’t yet been issued due to a court order, they’re all designated for a region that covers Chicago.
The majority owners are people of color and military veterans who qualified as social equity applicants, said Zises, adding that he and other Dispensary 33 leaders also helped eight other winning groups find partners and write their applications.
He said he now hopes to use the influx of cash from the pending deal to continue supporting the new players.
“I’m going to have access to more resources to help the social equity groups that we helped incubate move forward in whatever direction they want,” he said.
