MIAMI, March 15, 2024 /CNW/ - Mercer Park CB, L.P. has filed an early warning report related to its ownership interests and those of Jonathan Sandelman, the Executive Chair of Ayr Wellness Inc. (CSE: AYR.A, OTCQX: AYRWF) ("AYR" or the "Company"), a leading vertically integrated U.S. multi-state cannabis operator.

Item 1 – Security and Reporting Issuer

This press release relates to the following securities of the Company: (i) multiple voting shares (the "Multiple Voting Shares"); (ii) subordinate, restricted and limited voting shares (the "Equity Shares"); (iii) Equity Share purchase warrants, which are each exercisable for one Equity Share at a price of US$2.12 until February 7, 2026 (the "Anti-Dilutive Warrants"); (iv) Equity Share purchase warrants, which are each exercisable for one Equity Share at a price of US$9.07 until May 24, 2024 (the "Original Warrants" and together with the Anti-Dilutive Warrants, the "Warrants"); (v) restricted stock units (the "RSUs"); and (vi) restricted exchangeable shares, which are each exchangeable for one Equity Share (the "Restricted Exchangeable Shares").

The head office address of the Company is: 2601 South Bayshore Drive, Suite 900 Miami, Florida 33133.

Item 2 – Identity of the Acquiror

Mercer Park CB, L.P. (the "Sponsor", and together with Jonathan Sandelman and Mercer Park CB GP, LLC, the general partner of the Sponsor, the "Filer"), whose address is 2601 South Bayshore Drive, Suite 900 Miami, Florida 33133, announced its beneficial ownership of the Company following its acquisition of the Securities (as defined below). The Filer was granted 1,747,417 Anti-Dilutive Warrants on February 7, 2024, pursuant to a plan of arrangement under Section 192 of the Canada Business Corporations Act involving the Company and Ayr Wellness Canada Holdings Inc. (the "Arrangement"). All shareholders of the Company also received Anti-Dilutive Warrants.

In addition, Jonathan Sandelman was granted an award of 540,000 restricted stock units ("New RSUs") of CSAC Acquisition Inc. on March 14, 2024 (the "Issuance Date"). The New RSUs will fully vest on December 31, 2025, subject to his continued service with the Company. Effective as of the Issuance Date, the number of Equity Shares to be issued upon vesting of all of the outstanding RSUs, including the New RSUs, was effectively increased from 1 to 1.155 to account for the Anti-Dilutive Warrants that were issued to existing shareholders of the Company pursuant to the Arrangement, with the additional 15.5% subject to an additional 1-year time vesting period (the "RSU Adjustment"). Following the RSU Adjustment, the number of Equity Shares to be issued upon vesting of all of Jonathan Sandelman's RSUs increased to 850,740. 

Further, 522,600 Restricted Exchangeable Shares vested and were exchanged for Equity Shares on December 1, 2023.

The RSUs, Anti-Dilutive Warrants and Equity Shares acquired by the Filer represent beneficial ownership and control over an aggregate of 3,008,907 Equity Shares, representing approximately 3.02% of the issued and outstanding Equity Shares as of March 14, 2024.

The Filer holds its Multiple Voting Shares, Equity Shares, RSUs, Warrants and Restricted Exchangeable Shares for investment purposes. The Filer may acquire further securities of the Company or dispose of its holdings of securities of the Company, both as investment conditions warrant.

Item 3 – Interest in Securities of the Reporting Issuer

Before the grant of RSUs, Anti-Dilutive Warrants and Equity Shares (collectively, the "Securities"), the Filer had beneficial ownership and control over: (i) 3,677,626 Multiple Voting Shares, representing 99.49% of the issued and outstanding Multiple Voting Shares as of March 14, 2024; (ii) 1,034,272 Equity Shares, representing 1.04% of the issued and outstanding Equity Shares as of March 14, 2024; (iii) 2,874,058 Original Warrants, representing 100% of the issued and outstanding Original Warrants as of March 14, 2024; (iv) RSUs which are convertible into 111,850 Equity Shares, representing 0.11% of the issued and outstanding Equity Shares as of March 14, 2024; and (v) 1,150,937 Restricted Exchangeable Shares, representing 11.94% of the issued and outstanding exchangeable shares of the Company ("Exchangeable Shares") as of March 14, 2024.

After the grant of the Securities, the Filer has beneficial ownership and control over: (i) 3,677,626 Multiple Voting Shares as of March 14, 2024, representing 99.49% of the issued and outstanding Multiple Voting Shares as of March 14, 2024; (ii) 1,556,872 Equity Shares, representing 1.56% of the issued and outstanding Equity Shares as of March 14, 2024; (iii) 2,874,058 Original Warrants, representing 100% of the issued and outstanding Original Warrants as of March 14, 2024; and (iv) 1,747,417 Anti-Dilutive Warrants, representing 7.59% of the issued and outstanding Anti-Dilutive Warrants as of March 14, 2024; (v) RSUs which are convertible into 850,740 Equity Shares, representing 0.85% of the issued and outstanding Equity Shares as of March 14, 2024; and (vi) 628,337 Restricted Exchangeable Shares, representing 6.52% of the issued and outstanding Exchangeable Shares as of March 14, 2024.

Assuming the exercise or conversion by the Filer of all Multiple Voting Shares, RSUs, Anti-Dilutive Warrants and Restricted Exchangeable Shares held by the Filer, which total 6,904,120, and without assuming the exercise of any rights held by any persons other than the Filer to acquire Equity Shares, then, based on the 99,631,155 Equity Shares that were issued and outstanding on March 14, 2024 (which would be 106,535,275 if all of such rights were all exercised or converted), the Filer would hold approximately 7.94% of the Equity Shares.

AYR is a vertically integrated, U.S. multi-state cannabis business. The Company operates simultaneously as a retailer with 90+ licensed dispensaries and a house of cannabis CPG brands.

AYR is committed to delivering high-quality cannabis products to its patients and customers while acting as a Force for Good for its team members and the communities that the Company serves. For more information, please visit www.ayrwellness.com.