AYR Wellness Kicks Off Public Auction in Debt Restructuring Push

LOS ANGELES – Miami-based AYR Wellness Inc. moved ahead with its financial reset by starting Article 9 foreclosure proceedings under the Uniform Commercial Code to auction core assets. Odyssey Trust Company, serving as collateral trustee for the senior noteholders, sent out notices of disposition. The public sale takes place November 10, 2025, in the New York offices of Paul Hastings LLP or by video link.

The action follows a July 30 Restructuring Support Agreement with holders of over half the company’s $215 million senior notes. Those creditors, headed by Boston’s Millstreet Capital Management, line up a $387 million credit bid, covering principal plus interest and fees, to grab the assets and build a new entity, sidelining current shareholders through a debt-for-equity trade. On offer: equity and operations in Florida, New Jersey, Nevada, Ohio, Massachusetts, and Pennsylvania, which fuel most of AYR’s $463.6 million in trailing 12-month revenue.

Interim CEO Scott Davido called the step a clear marker.

“The commencement of the Article 9 proceedings and public auction process marks the latest milestone in our ongoing restructuring process,” he said. “As we work to transition the ownership of many of the company’s assets to the successful bidder, throughout this entire process, AYR will continue to fully operate these businesses and continue to deliver the same high quality of products and services.”

A $50 million bridge loan from the noteholders, locked in August 29 at 14% interest payable in kind, keeps cash flowing. Draws tie to a 13-week budget, with proceeds split between working capital for core units and winding down non-essentials. The facility rolls into a take-back loan post-sale and carries premiums that could swap for new equity.

AYR shoulders total liabilities of $946.7 million, including $365 million in short-term liabilities, squeezed by Section 280E tax barriers on deductions and federal cash-only rules that inflate costs. Second-quarter sales dropped 5% to $110 million on price dips in key states and rollout snags elsewhere, but a network of over 90 dispensaries and grow operations provides scale. The company trimmed fat recently: a Connecticut retail spot, cultivation sites in Nevada and New Jersey, three Pennsylvania stores and a grow facility, a Massachusetts medical dispensary and manufacturing plant.

Article 9 speeds the transfer over Chapter 11, nailing creditor claims without court delays. Millstreet’s grip cuts dispute odds, and the open bid could lure higher offers in a buyer’s market for distressed assets.

Shares in AYR sat at $0.025, down sharply year-to-date but showing no big swing after the news, as traders had eyed this since July. Millstreet, already an equity player, pledges another $50 million after the deal for builds in Virginia and other spots. The overhaul, due by December with state approvals, slices debt over 50% and zeros in on standouts like Florida before 2026 adult-use bids.

Wrapping up, AYR’s auction, all set for a reset, offers a blueprint for how distressed operators can leverage creditor muscle to emerge leaner and market-ready. With Millstreet’s fresh capital on tap and a trimmed footprint in proven states, the new entity eyes not only survival, but steady climbs in revenue per store and margin recovery. Watch for bids that could upend the script, but expect this handoff to set a template for the next wave of consolidations hitting the Cannabis boardrooms.