Ayr Wellness Inc. has entered into a binding letter of intent to acquire 100% of Massachusetts-based Cultivana, the parent company of cannabis-infused beverage brand Levia, for $20 million, the two companies announced earlier this week. The transaction is for $10 million in cash and the rest in stock. An additional $40 million will be paid in shares based on performance in 2022 and 2023. The deal is expected to close at the end of this year.
What is Levia?
Massachusetts-based Levia only recently launched its line of THC-infused flavored seltzers, but the brand has quickly found its footing. The three SKUs — Achieve (Raspberry Lime), Dream (Jam Berry) and Celebrate (Lemon Lime) — feature sativa, indica and hybrid-dominant blends, each with 5 mg of THC per 12 oz. slim can. The company also recently introduced those same three varieties as water-soluble tinctures. Sourcing its flower from in-state partner cultivators, Levia extracts, infuses and manufactures its seltzers and tinctures at its production facility in Georgetown, Massachusetts.
Despite launching roughly six months ago, Levia has made an instant impact in the company’s home state, where it retains 80% of the market share in THC-infused beverages.
We believe this is a key factor in making Levia an approachable and sessionable choice for new and existing customers and will be key to unlocking many potential consumers who are interested in cannabis but haven’t yet brought themselves to try it.
What is Ayr Wellness?
With anchors in both Nevada and Massachusetts, Ayr Wellness is a multi-state cannabis operator that has been on something of a spending spree as it steadily expands its footprint nationwide. In recent months, fueled by an injection of $120 million in equity and $110 million in debt financing, the company has acquired Florida-based dispensary Liberty Health Sciences, as well as dispensaries in Illinois, plus cannabis companies in Nevada and Pennsylvania.
The company offers flower (Kynd), vapes, extracts (Origyn), edibles, pre-rolls, and topicals. Ayr also markets beverage brand CannaPunch, a line of THC-infused flavored fruit punch drinks. During an earnings call earlier this week, the company raised its revenue target for 2022 to $800 million. Ayr’s Q2 2021 increased 222% from the same period last year to just over $91 million.
How does Levia fit into their growth strategy?
In an email to BevNET, Ayr said that Levia brings the company “into the rapidly-growing infused beverage segment, with an industry-leading formula that provides a fast, predictable onset, and maximum bioavailability that makes sure consumers get the full 5 mg of THC that they paid for.”
More specifically, the company said the 15-20 minute onset time for consumers to feel Levia’s effects is a key factor in making the drink approachable and sessionable, critical components of unlocking canna-curious drinkers.
“With a formula that provides consistently great flavor and zero calories in an infused beverage experience, we believe Levia has enormous potential as an alcohol alternative,” said Jonathan Sandelman, CEO of Ayr Wellness, in a press release. “In just six months since its initial launch in Massachusetts, Levia has become the top selling THC beverage. As we finalize our updated national brand portfolio to address all segments and form factors, Levia will play a marquee role in each market where we operate.”
Levia joins a cohort of brands like Cann and Keef Cola developing low-dose THC -infused drinks. According to a recent report from market research group Brightfield, cannabis beverages maintain about a 1% share of the recreational cannabis market.