Exhibit 99.2

TABLE OF CONTENTS

APPENDICES

November 15, 2023

Dear Senior Noteholders:

The special committee comprised of independent directors (the “Special Committee”) of the Board of Directors (the “Board”) of AYR Wellness Inc. (“AYR” or the “Corporation”) invites you to attend a special meeting (the “Meeting”) of holders (“Senior Noteholders”) of the Corporation’s 12.50% senior secured notes due December 10, 2024 (the “Senior Notes”), to be held at the offices of Stikeman Elliott LLP, 199 Bay Street, Commerce Court West, 53^rd Floor, Toronto, Ontario, Canada M5L 1B9 on December 15, 2023 at 10:00 a.m. (Eastern time).

At the Meeting, you will be asked to consider and vote on a special resolution of Senior Noteholders (the “Arrangement Resolution”) to approve a plan of arrangement (the “Arrangement”) under section 192 of the Canada Business Corporations Act (the “CBCA”) pursuant to which, among other things, the trust indenture dated December 10, 2020 governing the Senior Notes (the “Existing Indenture”) will be amended and restated (the “Amended and Restated Indenture”) and all outstanding Senior Notes will be exchanged for an equivalent principal amount of new 13% senior secured notes due December 10, 2026 (the “New 2026 Notes”) of AYR Wellness Canada Holdings Inc. (“AYR Wellness Canada” or “AYR Newco”), to be guaranteed by AYR and its other subsidiaries pursuant to such Amended and Restated Indenture, as well as receiving subordinated, restricted and/or limited voting shares (the “AYR SVS Shares”) of AYR, all in accordance with the terms of the Arrangement (which transactions are collectively referred to as the “Transaction”).

As part of the Transaction, certain of the Supporting Senior Noteholders (as defined below) have committed to advancing to the Corporation an additional U.S.$40 million of new money proceeds (net of a 20% original issue discount) in return for the issuance of U.S.$50 million of New 2026 Additional Notes (as defined in the Circular) concurrent with the completion of the Transaction, and the Backstop Provider (as defined in the Circular) will receive AYR SVS Shares or shares of a subsidiary of AYR exchangeable for AYR SVS Shares. In addition, AYR’s existing shareholders will receive new warrants (the “Anti-Dilutive Warrants”) to acquire AYR SVS Shares exercisable for two years from closing at U.S.$2.12 per share.

Each registered Senior Noteholder is requested to submit an executed and completed Form of Proxy (attached as Appendix “C” to the Management Information Circular (the “Circular”)) to the Corporation, by sending to: Odyssey Trust Company, Attn: Proxy Department, 67 Yonge Street, Suite 702, Toronto, Ontario M5E 1J8. See “Solicitation of Proxies – Appointment of Proxies” for additional information regarding the completion and submission of the Form of Proxy. If you are a non-registered Senior Noteholder and you receive these materials through your broker, custodian, nominee or other intermediary (an “Intermediary”), you should follow the instructions provided by your Intermediary on the enclosed Voting Instruction Form in order to vote your Senior Notes.

Koger Valuations Inc. (“Koger”) has been engaged as a financial advisor to the Corporation and the Board and Special Committee in connection with the Transaction. Koger has delivered an opinion to the Special Committee and the Board dated as of October 31, 2023 which concludes that, as of the date thereof, and subject to the qualifications set out therein, the Transaction, if implemented, is fair from a financial point of view to the holders of the Senior Notes (and to AYR Shareholders) (the “Fairness Opinion”).

In addition, following the delivery of a submission regarding the Transaction to the Canadian Securities Exchange (the “CSE”) accompanied by a detailed outline of the Arrangement and proposed transactions thereunder, the CSE confirmed to the Corporation that the CSE does not require the approval of AYR Shareholders to implement the Transaction.

After careful consideration of various factors and alternatives and consultation with Weil, Gotshal & Manges LLP (“Weil”) and Stikeman Elliott LLP (“Stikeman”), the Corporation’s legal advisors, and Moelis & Company LLC (“Moelis”), the Corporation’s financial advisor, the Special Committee, which was delegated the power to deal with these matters by the Board, unanimously determined that the Arrangement is in the best interests of the Corporation and fair from a financial point of view to the holders of the Senior Notes (and to AYR Shareholders) and unanimously recommends that Senior Noteholders VOTE FOR the Arrangement Resolution and the Transaction contemplated thereby.

The Special Committee and management believe that it is beneficial and important that the Transaction be implemented. Exchanging the Senior Notes for the New 2026 Exchange Notes (as defined in the Circular), which do not mature until December 10, 2026, and New AYR Exchange Shares (as defined in the Circular) treats all Senior Noteholders equally and fairly. The maturity deferral represented by the New 2026 Exchange Notes and the additional proceeds to be received by AYR Newco in connection with the New 2026 Additional Notes is expected to bring greater stability to the Corporation’s capital structure and allow the Corporation to execute on its long-term business plan. The Transaction offers substantial benefits to the Corporation.

Enclosed are a Notice of Meeting and the Circular. These documents are also available on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov. The Circular and the appendices attached thereto, which we urge you to read carefully in consultation with your tax, financial, legal or other professional advisors, describe the Transaction and include certain other information (including the full text of the Fairness Opinion) to assist you in considering the Arrangement.

In order for the Transaction to be implemented, the Arrangement must be approved by the affirmative vote of at least 66^2/3% of the votes cast by Senior Noteholders present in person or by proxy at the Meeting and entitled to vote on the Arrangement Resolution. All Senior Noteholders will vote as one class under the Arrangement. Each Senior Noteholder will have one vote for each U.S.$1.00 of principal amount of the Senior Notes held by such Senior Noteholder as of the record date (which is the close of business on November 8, 2023). As of the date hereof, Senior Noteholders representing approximately 76% (collectively, the “Supporting Senior Noteholders”) of the aggregate principal amount of Senior Notes have executed a support agreement with the Corporation pursuant to which they have agreed, among other things, to support the terms of the Transaction and to vote in favour of the Arrangement Resolution at the Meeting.

In addition to Senior Noteholder approval, completion of the Arrangement is subject to a number of conditions, including approval by the Ontario Superior Court of Justice and any required U.S. state cannabis regulatory approvals. Pending receipt of such approvals and satisfaction of all conditions precedent, the Corporation anticipates that completion of the Arrangement will occur. Closing is currently targeted to occur by December 31, 2023, assuming the satisfaction or waiver of all closing conditions including regulatory approvals.

Yours very truly,

Brad Asher

Chief Financial Officer and Secretary

AYR Wellness Inc.

NOTICE OF SPECIAL MEETING OF SENIOR NOTEHOLDERS

NOTICE IS HEREBY GIVEN that a special meeting (the “Meeting”) of the holders of the Senior Notes (the “Senior Noteholders”) of the Corporation will be held at the offices of Stikeman Elliott LLP, 199 Bay Street, Commerce Court West, 53^rd Floor, Toronto, Ontario, Canada M5L 1B9 on December 15, 2023 at 10:00 a.m. (Eastern time) for the following purposes:

AND NOTICE IS HEREBY GIVEN that the Court has been advised that its order approving the Arrangement, if granted, will constitute the basis for an exemption from the registration requirements of the United States Securities Act of 1933, as amended, as provided by Section 3(a)(10) thereof, with respect to the issuance of the New 2026 Exchange Notes and New AYR Exchange Shares (as such terms are defined in the accompanying Circular) to be issued pursuant to the Arrangement.

The record date (the “Record Date”) for entitlement to vote at the Meeting has been set by the Court as the close of business on November 8, 2023, subject to any further order of the Court.

Subject to any further order of the Court, the quorum for the Meeting is the presence, in person or by proxy, of holders representing at least 25% of the principal amount of outstanding Senior Notes. Subject to any further order of the Court, the vote required to pass the Arrangement Resolution at the Meeting is the affirmative vote of at least 66^2/3% of the votes cast by Senior Noteholders present in person or by proxy at the Meeting and entitled to vote on the Arrangement Resolution.

Each Senior Noteholder will have one vote for each U.S.$1.00 of principal amount of the Senior Notes held by such Senior Noteholder as of the Record Date. All Senior Noteholders will vote as one class under the Arrangement.

In addition to Senior Noteholder approval, the implementation of the Arrangement is subject to the approval of the Court and required U.S. state regulatory authorities. The matter is currently scheduled to be heard at the Ontario Superior Court of Justice (Commercial List) on December 19, 2023.

In addition to the Arrangement Resolution, copies of the Plan of Arrangement, the Notice of Application and the Interim Order, as such terms are defined in the Circular, are attached to the Circular as Appendices “B”, “D” and “E”, respectively.

If you are a non-registered Senior Noteholder and you receive these materials through your broker, custodian, nominee or other intermediary, you should follow the instructions provided by your broker, custodian, nominee or other intermediary in the enclosed Voting Instruction Form in order to vote your Senior Notes. If you are a registered Senior Noteholder, whether or not you are able to attend the Meeting, you are requested to complete, execute and deliver the enclosed Form of Proxy in accordance with the instructions set forth on the Form of Proxy to the Corporation, c/o Odyssey Trust Company, Attn: Proxy Department, 67 Yonge Street, Suite 702, Toronto, Ontario M5E 1J8, by no later than 10:00 a.m. (Eastern time) on December 13, 2023 or, if the Meeting is adjourned or postponed, not less than 48 hours (excluding Saturdays, Sundays and holidays) prior to any adjournment or postponement thereof. The time limit for the deposit of proxies may be waived or extended by the Corporation at its sole discretion without notice.

The Form of Proxy or Voting Instruction Form to be delivered to Senior Noteholders in connection with the Meeting nominates Brad Asher, the Chief Financial Officer of the Corporation, as a proxyholder in connection with the voting at the Meeting, with full power of substitution. A Senior Noteholder may attend the Meeting in person or may appoint another person as proxyholder.

Non-registered Senior Noteholders who wish to appoint themselves or another person to attend the Meeting on their behalf should follow the instructions provided by your broker, custodian, nominee or other intermediary in the enclosed Voting Instruction Form. Non-registered holders in the U.S. that request a legal proxy from their broker, custodian, nominee or other intermediary, will need to deliver the legal proxy to the Corporation, by email to: corptrust@odysseytrust.com, by no later than 10:00 a.m. (Eastern time) on December 13, 2023 or, if the Meeting is adjourned or postponed, not less than 48 hours (excluding Saturdays, Sundays and holidays) prior to any adjournment or postponement thereof. Persons appointed as proxyholders need not be Senior Noteholders.

The Special Committee unanimously recommends that Senior Noteholders VOTE FOR the Arrangement Resolution.

DATED at Miami, Florida, this 15^th day of November, 2023.

AYR WELLNESS INC.

BY ORDER OF THE SPECIAL COMMITTEE

Brad Asher
Chief Financial Officer

GLOSSARY OF TERMS

“2022 AIF” has the meaning ascribed thereto under the heading “Documents Incorporated by Reference”;

“2022 Financial Statements” has the meaning ascribed thereto under the heading “Documents Incorporated by Reference”;

“2022 MD&A” has the meaning ascribed thereto under the heading “Documents Incorporated by Reference”;

“2023 AGM Circular” has the meaning ascribed thereto under the heading “Documents Incorporated by Reference”;

“2023 Interim Financials” has the meaning ascribed thereto under the heading “Documents Incorporated by Reference”;

“2023 Interim MD&A” has the meaning ascribed thereto under the heading “Documents Incorporated by Reference”;

“Accredited Investor” has the meaning ascribed to such term in Rule 501(a) under the U.S. Securities Act;

“Amended and Restated Indenture” means the amended and restated trust indenture to be entered into among AYR Newco, the Corporation, the Existing Guarantors, the New Guarantors, and the Indenture Trustee on the Effective Date, in substantially the form attached as Appendix “G” to this Circular, which shall govern the Senior Notes and the New 2026 Notes, and shall replace the Existing Indenture upon the Plan becoming effective on the Effective Date, and shall be in form and substance acceptable to the Corporation and the Requisite Supporting Senior Noteholders;

“Anti-Dilutive Warrants” means the 23,046,067 warrants to purchase AYR SVS Shares for a period of 2 years from the Effective Date at an exercise price per share of U.S.$2.12 issued on the Effective Date pursuant to the Warrant Agency Agreement and the Plan to existing AYR Shareholders and AYR Exchangeable Shareholders as of the Warrant Record Date;

“Arrangement” means the arrangement under section 192 of the CBCA on the terms and subject to the conditions set out in the Plan, subject to any amendments, modifications and/or supplements made thereto in accordance with the terms of the Plan or made at the discretion of the Court in the Final Order with the prior written consent of AYR, AYR Newco and the Requisite Supporting Senior Noteholders, each acting reasonably;

“Arrangement Resolution” means the special resolution of the Senior Noteholders to approve the Plan to be considered at the Meeting, the full text of which is attached as Appendix “A” to this Circular;

“AYR Entities” means, collectively, AYR, AYR Newco, and each other direct or indirect subsidiary of AYR (excluding Ayr Foundation Inc.);

“AYR Exchangeable Shareholders” means the Holders of AYR Exchangeable Shares;

“AYR Exchangeable Shares” means the exchangeable shares in the capital of a subsidiary of AYR, which are exchangeable for AYR SVS Shares;

“AYR Newco” means AYR Wellness Canada Holdings Inc.;

“AYR Note Assumption” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations – Amalgamation or Wind Up of AYR Newco”;

“AYR Shareholders” means collectively the Holders of Multiple Voting Shares and AYR SVS Shares;

“AYR SVS Shares” means the subordinate voting, limited voting and restricted voting shares of AYR;

“Backstop Commitment Letter” means the backstop commitment letter dated as of October 31, 2023 entered into by the Backstop Provider, pursuant to which the Backstop Provider agreed to, among other things, purchase any of the New 2026 Additional Notes not otherwise purchased by the Supporting Senior Noteholders;

“Backstop Funding Premium” means the Put Option Premium (as defined in the Backstop Commitment Letter) payable to the Backstop Provider in accordance with the Backstop Commitment Letter;

“Backstop Provider” means the Backstop Party (as defined in the Backstop Commitment Letter);

“Backstop Shares” means (i) 5,947,980 AYR SVS Shares, or (ii) at the option of the Backstop Provider, non-voting exchangeable shares of CSAC Acquisition NV Corp. that (A) in the event that the Backstop Provider sells such shares to an unrelated person, subject to obtaining any required regulatory approvals, will automatically be exchanged for an equivalent amount AYR SVS Shares, and (B) will, subject to obtaining any required regulatory approvals, automatically be exchanged for 5,947,980 AYR SVS Shares;

“Beneficial Senior Noteholder” has the meaning ascribed thereto under the heading “Solicitation of Proxies – Advice to Beneficial Senior Noteholders”;

“Board” means the board of directors of AYR Wellness Inc.;

“Business Day” means any day, other than a Saturday or a Sunday, on which commercial banks are generally open for business in Toronto, Ontario and Miami, Florida;

“CBCA” means the Canada Business Corporations Act, R.S.C. 1985, c. C-44 and the regulations thereto, as now in effect and as it may be amended from time to time prior to the Effective Date;

“CBCA Director” means the director appointed under section 260 of the CBCA;

“CBCA Proceedings” means the proceedings commenced by AYR Newco under the CBCA on November 15, 2023 in connection with the Plan;

“CDS” means CDS & Co., the nominee of CDS Clearing and Depository Services Inc.;

“Certificate of Arrangement” means the certificate giving effect to the Arrangement, to be issued by the CBCA Director pursuant to section 192(7) of the CBCA upon receipt of the Articles of Arrangement in respect of AYR Newco in accordance with section 262 of the CBCA;

“Circular” means this Management Information Circular of the Corporation dated as of November 15, 2023, including all Appendices hereto, as it may be amended, restated or supplemented from time to time;

“Claim” means any right or claim of any Person that may be asserted or made in whole or in part against the applicable Persons, or any of them, in any capacity, whether or not asserted or made, in connection with any indebtedness, liability or obligation of any kind whatsoever, and any interest accrued thereon or costs payable in respect thereof, whether at law or in equity, including by reason of the commission of a tort (intentional or unintentional), by reason of any breach of contract or other agreement (oral or written), by reason of any breach of duty (including, any legal, statutory, equitable or fiduciary duty), by reason of any right of setoff, counterclaim or recoupment, or by reason of any equity interest, right of ownership of or title to property or assets or right to a trust or deemed trust (statutory, express, implied, resulting, constructive or otherwise), and together with any security enforcement costs or legal costs associated with any such claim, and whether or not any indebtedness, liability or obligation is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, unsecured, perfected, unperfected, present or future, known or unknown, by guarantee, warranty, surety or otherwise, and whether or not any right or claim is executory or anticipatory in nature, including any claim made or asserted against the applicable Persons, or any of them, through any successor, assignee, affiliate, subsidiary, associated or related Person, or any right or ability of any Person to advance a claim for an accounting, reconciliation, contribution, indemnity, restitution or otherwise with respect to any matter, grievance, action (including any class action or proceeding before an administrative or regulatory tribunal), cause or chose in action, whether existing at present or commenced in the future;

“Court” means the Ontario Superior Court of Justice (Commercial List);

“CSE” means the Canadian Securities Exchange;

“Definitive Documents” means, collectively, all of the definitive documents necessary or advisable to implement the Transaction, including, without limitation: (i) the Plan and this Circular and other related proxy materials, (ii) the New 2026 Notes Documents, (iii) the formation documents of AYR Newco, (iv) the Backstop Commitment Letter, (v) the Interim Order, (vi) the Final Order, (vii) all security agreement and collateral documents in connection with the New 2026 Notes, (viii) the Warrant Agency Agreement, (ix) any agreement providing for the pre-emptive rights described in the Term Sheet, and (x) any other agreements and documentation necessary or advisable to consummate and document or achieve the Transaction, and in each case, any amendments, modifications, and supplements thereto and any related notes, certificates, agreements, documents, and instruments;

“Depositary” means Odyssey Trust Company or any other trust company, bank or equivalent financial institution agreed to in writing by AYR Newco and AYR and appointed to carry out any of the duties of the Depositary hereunder;

“DRS” means Direct Registration System;

“DRS Advice” means an advice issued by the Transfer Agent, the Warrant Agent or the Indenture Trustee evidencing the securities held by a Holder of Multiple Voting Shares, AYR SVS Shares, AYR Exchangeable Shares, Backstop Shares, Anti-Dilutive Warrants, Senior Notes and/or New 2026 Notes, as applicable, in lieu of a physical certificate;

“EDGAR” means the U.S. Securities and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval system;

“Effective Date” means the date shown on the Certificate of Arrangement issued by the CBCA Director;

“Effective Time” means such time as may be specified by the Corporation, in writing, on the Effective Date;

“Existing Guarantors” means collectively, CannaPunch of Nevada LLC, CSAC Acquisition IL Corp., CSAC Acquisition MA II Corp., CSAC Acquisition NJ Corp., CSAC Acquisition PA Corp., CSAC Acquisition PA II Corp., CSAC Holdings Inc., CSAC Ohio, LLC, DocHouse LLC, DWC Investments, LLC, Mercer Strategies PA, LLC, Parker Solutions MA LLC, Parker Solutions PA, LLC, Sira Naturals, Inc., CSAC Acquisition Inc., CSAC Acquisition FL Corp., AYR Wellness Holdings LLC, Tahoe-Reno Botanicals, LLC, Tahoe-Reno Extractions, LLC, Kynd-Strainz LLC, Lemon Aide LLC, DFMMJ Investments, LLC, Parker RE MA LLC, CannTech PA, LLC and 242 Cannabis, LLC;

“Existing Indenture” means the trust indenture dated as of December 10, 2020 (as amended, restated and/or supplemented from time to time) between the Corporation and the Indenture Trustee, pursuant to which the Senior Notes were issued;

“Fairness Opinion” means the fairness opinion of Koger attached as Appendix “F” to this Circular and described under the heading “Description of the Arrangement – Fairness Opinion”;

“Final Order” means the final order of the Court approving the Arrangement under section 192 of the CBCA, which shall include such terms as may be necessary or appropriate to give effect to the Arrangement and the Plan, in form and substance satisfactory to AYR Wellness Canada, AYR and the Requisite Supporting Senior Noteholders, as such final order may be amended from time to time in a manner acceptable to AYR Wellness Canada, AYR and the Requisite Supporting Senior Noteholders;

“Form of Proxy” means the form of proxy to be completed by registered Senior Noteholders, pursuant to which registered Senior Noteholders may indicate their vote in respect of the Arrangement Resolution;

“Governmental Entity” means any government, regulatory authority, governmental department, agency, commission, bureau, official, minister, Crown corporation, court, board, tribunal or dispute settlement panel or other law, rule or regulation-making organization (including any stock exchange and the Canadian Investment Regulatory Organization) or entity: (i) having or purporting to have jurisdiction on behalf of any nation, province, territory or state or any other geographic or political subdivision of any of them; or (ii) exercising, or entitled or purporting to exercise any administrative, executive, judicial, legislative, policy, regulatory or taxing authority or power;

“Holder” means a Person in whose name a note, warrant or share is registered, as the context requires;

“Indenture Trustee” means Odyssey Trust Company, as trustee under the Existing Indenture and the Amended and Restated Indenture, and its successors and assigns;

“Interim Order” means the interim order of the Court dated November 15, 2023 pursuant to section 192 of the CBCA, which, among other things, approves the calling of, and the date for, the Meeting, and as may be amended from time to time in a manner acceptable to AYR Newco, AYR and the Requisite Supporting Senior Noteholders, and which is attached as Appendix “E” to this Circular;

“Intermediary” means a broker, custodian, investment dealer, nominee, bank, trust company or other intermediary;

“Koger” means Koger Valuations Inc.;

“Letter of Transmittal” means the letter of transmittal in connection with the Arrangement forwarded by AYR to registered Senior Noteholders holding physical certificate(s) representing Senior Notes;

“Meeting” means the meeting of the Senior Noteholders as of the Record Date called and held pursuant to the Interim Order for the purpose of considering and voting on the Arrangement Resolution and to consider and vote on such other matters as may properly come before such meeting, and includes any adjournment(s) or postponement(s) of such meeting;

“New 2026 Additional Notes” means the New 2026 Notes in the aggregate principal amount of U.S.$50,000,000 issued to the New 2026 Notes Purchasers pursuant to the Amended and Restated Indenture in accordance with the Plan;

“New 2026 Exchange Notes” means the New 2026 Notes in the aggregate principal amount of U.S.$243,250,000 to be issued by AYR Newco to the Senior Noteholders in accordance with the Plan pursuant to the Amended and Restated Indenture;

“New 2026 Notes” means the new 13% senior notes due December 10, 2026, to be issued by AYR Newco, as Substituted Issuer, and to be guaranteed by AYR, the Existing Guarantors and the New Guarantors, in each case, pursuant to the Amended and Restated Indenture and the Plan, which notes will be denominated in U.S. dollars, constitute a new series under the Amended and Restated Indenture and be substantially on the terms set forth in the form of Amended and Restated Indenture, as such terms may be amended pursuant to the Plan;

“New 2026 Notes Documents” means, collectively, the Amended and Restated Indenture, the New 2026 Notes, the New Guarantees and the guarantees to be provided by AYR, the Existing Guarantors and the New Guarantors pursuant to the Amended and Restated Indenture, and the existing and new security agreements (as applicable) to be entered into by the Existing Guarantors and the New Guarantors, in each case, in a form acceptable to AYR Newco, AYR and the Requisite Supporting Senior Noteholders;

“New 2026 Notes Purchasers” means, collectively, the purchasers of the New 2026 Additional Notes;

“New AYR Exchange Shares” means a total of 29,040,140 AYR SVS Shares to be issued to the Senior Noteholders pursuant to the exchange of the Senior Notes for New 2026 Notes;

“New AYR Shares” means (i) the New AYR Exchange Shares, and (ii) the Backstop Shares if issued as AYR SVS Shares;

“New Guarantees” means the new guarantees of the New 2026 Notes to be provided by the New Guarantors, including, for greater certainty, all general, collateral and other security agreements entered into by the New Guarantors;

“New Guarantors” means the AYR Entities other than AYR Newco, AYR and the Existing Guarantors;

“Non-Resident Holder” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations – Non-Residents of Canada”;

“Note Issuer” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations – Non-Residents of Canada”;

“Noteholder” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations”;

“Notice of Application” means the Notice of Application, attached as Appendix “D” to this Circular;

“Order” means any order of the Court relating to the Arrangement including, without limitation, the Interim Order and the Final Order;

“Person” includes any individual, firm, partnership, limited partnership, joint venture, venture capital fund, association, trust, trustee, executor, administrator, legal personal representative, estate, group, body corporate (including a limited liability company and an unlimited liability company), corporation, unincorporated association or organization, governmental authority, syndicate or other entity, whether or not having legal status;

“Plan” means the plan of arrangement pursuant to section 192 of the CBCA and the schedules thereto, substantially in the form attached as Appendix “B” to this Circular and any amendments or variations thereto made in accordance with the provisions of the Plan or Arrangement or made by an Order, in each case to be in form and substance reasonably acceptable to AYR, AYR Newco and the Requisite Supporting Senior Noteholders;

“Record Date” means the close of business on November 8, 2023;

“Regulation S” means Regulation S under the U.S. Securities Act;

“Requisite Supporting Senior Noteholders” has the meaning ascribed thereto in the Support Agreement;

“Resident Holder” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations – Residents of Canada”;

“Securities” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations”;

“Securityholder” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations”;

“SEDAR+” means the System for Electronic Data Analysis and Retrieval;

“Seller Notes” has the meaning ascribed thereto under the heading “Description of the Arrangement – Background to the Arrangement”;

“Seller Noteholders” has the meaning ascribed thereto under the heading “Description of the Arrangement – Background to the Arrangement”;

“Senior Noteholders” means the holders of the Senior Notes;

“Senior Notes” means the 12.5% senior notes due December 10, 2024 issued by AYR pursuant to the Existing Indenture;

“Special Committee” means the special committee of the board of directors of AYR Wellness Inc.;

“State Regulatory Approvals” has the meaning ascribed thereto under the heading “State Regulatory Matters”;

“Support Agreement” means that certain Support Agreement dated October 31, 2023 and all schedules thereto executed among the Corporation, AYR Newco and the Supporting Senior Noteholders, among others, pursuant to which the Supporting Senior Noteholders have agreed to, among other things, support and vote in favour of the Transaction and the Arrangement Resolution, as filed on SEDAR+ and EDGAR;

“Supporting Senior Noteholders” means those certain Senior Noteholders that are signatories to the Support Agreement (or their permitted assigns) and that held in the aggregate approximately 76% of the aggregate principal amount of the Senior Notes as of October 31, 2023;

“Tax Act” means the Income Tax Act (Canada) and the regulations thereto, as amended;

“Tax Proposals” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations”;

“Term Sheet” has the meaning ascribed thereto under the heading “Description of the Arrangement – Background to the Arrangement”;

“Transaction” means, collectively, the transactions contemplated by the Plan;

“Transaction Terms” means, collectively, the Term Sheet and the Backstop Commitment Letter;

“Transfer Agent” means Odyssey Trust Company, the transfer agent for the shares of the Corporation;

“Treaty” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations – Holding and Disposing of AYR SVS Shares – Dividends on AYR SVS Shares”;

“United States” or “U.S.” means the United States, as defined in Rule 902(1) under Regulation S under the U.S. Securities Act;

“U.S. Person” means a U.S. person as defined in Rule 902(k) under Regulation S under the U.S. Securities Act, including, but not limited to, any natural person resident in the United States;

“U.S. Securities Act” means the United States Securities Act of 1933, as amended;

“Voting Instruction Form” means the voting instruction form provided to non-registered Senior Noteholders, pursuant to which non-registered Senior Noteholders may indicate their vote in respect of the Arrangement Resolution;

“Warrant Agency Agreement” has the meaning ascribed thereto under the heading “Anti-Dilutive Warrants”;

“Warrant Agent” has the meaning ascribed thereto under the heading “Anti-Dilutive Warrants”; and

“Warrant Record Date” means the date that is seven Business Days prior to the Effective Date.

MANAGEMENT INFORMATION CIRCULAR

This Circular is furnished in connection with the solicitation by management of AYR Wellness Inc. (“AYR” or the “Corporation”) and AYR Newco of proxies for use at the Meeting, to be held at the offices of Stikeman Elliott LLP, 199 Bay Street, Commerce Court West, 53rd Floor, Toronto, Ontario, Canada M5L 1B9 on December 15, 2023 at 10:00 a.m. (Eastern time) and, at any adjournment or postponement thereof, for the purposes set forth in the accompanying Notice of Meeting of Senior Noteholders. Information in this Circular is given as at November 15, 2023 unless otherwise indicated.

INFORMATION CONCERNING AYR WELLNESS INC.

The Corporation is a U.S. national cannabis consumer packaged goods company and retailer. Founded in 2019 and headquartered in Miami, Florida, the Corporation is focused on delivering the highest quality cannabis products and customer experience throughout its footprint. The Corporation, through its subsidiaries and affiliates, holds, operates, and manages licenses and permits in the States of Florida, Massachusetts, Nevada, New Jersey, Ohio, Pennsylvania, Illinois, and Connecticut.

The Corporation (formerly known as “Cannabis Strategies Acquisition Corp.” and “Ayr Strategies Inc.”, respectively) was a special purpose acquisition corporation incorporated on July 31, 2017 under the Business Corporations Act (Ontario). The Corporation continued on May 24, 2019 into British Columbia under the Business Corporations Act (British Columbia), changed its name to “AYR Strategies Inc.”, and amended its financial year-end from September 30 to December 31 in connection with its qualifying transaction. The Corporation changed its name to “AYR Wellness Inc.” on February 11, 2021. The head office of the Corporation is located at 2601 South Bayshore Drive, Suite 900, Miami, Florida, 33133.

The AYR SVS Shares are traded under the single symbol “AYR.A” on the CSE. The AYR SVS Shares are also traded on the Over-the-Counter Market in the United States under the symbol “AYRWF”.

The Senior Notes began trading on the CSE effective April 21, 2021 under the symbol “AYR.NT.U”. The Senior Notes, in the aggregate principal amount of $110 million, were initially issued on December 10, 2020 through a private placement. On November 12, 2021, an additional approximately $133.3 million in Senior Notes were issued (the “Additional Notes”). The Senior Notes earn interest of 12.5% per annum (payable semi-annually, in equal installments) and, subject to the Transaction, mature on December 10, 2024.

AYR derives all or substantially all of its revenues from the cannabis industry in certain states of the United States, which industry is illegal under United States federal law. AYR is directly involved (through its licensed subsidiaries) in the cannabis industry in the United States where local state laws permit such activities. Currently, its subsidiaries and managed entities are directly engaged in the manufacture, possession, use, sale or distribution of cannabis and/or holds licenses in the adult-use and/or medicinal cannabis marketplace in the States of Massachusetts, Nevada, Pennsylvania, Florida, Ohio, New Jersey Illinois and Connecticut.

As of the date of this Circular, 100% of the Corporation’s business is directly derived from United States cannabis-related activities. As such, the Corporation’s exposure to United States cannabis-related activities is 100%.

Additional information about the Corporation is set out in the 2022 AIF, the 2023 AGM Circular, the 2022 Financial Statements, the 2022 MD&A, the 2023 Interim Financial Statements and the 2023 Interim MD&A.

INFORMATION CONCERNING AYR WELLNESS CANADA HOLDINGS INC.

AYR Newco is a direct, wholly-owned subsidiary of the Corporation. AYR Newco was incorporated on October 27, 2023 under the Canada Business Corporations Act. The registered office of AYR Newco is located at 199 Bay Street, Commerce Court West, 53rd Floor, Toronto, Ontario, Canada M5L 1B9.

SOLICITATION OF PROXIES

While it is expected that the solicitation will be primarily by mail, proxies may also be solicited personally, or by telephone, email or other electronic means, by directors, officers and employees of the Corporation who will not be specifically remunerated for such efforts.

In addition, AYR has retained Carson Proxy Advisors for proxy solicitation and information agent services in connection with the Meeting. If you have any questions, or require assistance completing Form of Proxy or other voting instruction form, please contact Carson Proxy Advisors, by phone at 1-800-530-5189 (collect 416-751-2066) or by email at info@carsonproxy.com. No person has been authorized to give any information or make any representation in connection with the Plan or any other matters to be considered at the Meeting other than those contained in this Circular and, if given or made, any such information or representation must not be relied upon as having been authorized by the Corporation, the Indenture Trustee or Carson Proxy Advisors.

As used herein, the term “Senior Noteholder” means each person that is shown on the records of the Indenture Trustee as a registered holder of Senior Notes, other than any Affiliates of the Corporation (as such term is defined in the Existing Indenture), as of 5:00 p.m. (Eastern time) on the Record Date.

Voting Rights

As at the date hereof, approximately U.S.$243,250,000 aggregate principal amount of Senior Notes are issued and outstanding. Each U.S.$1.00 principal amount of Senior Notes entitles the Senior Noteholder of record as of the Record Date to one vote at the Meeting.

Appointment of Proxies

The person named as proxyholder in the enclosed Form of Proxy is an officer of the Corporation (the “AYR Proxyholder”). Each Senior Noteholder has the right to appoint a person other than the AYR Proxyholder to represent such Senior Noteholder at the Meeting (including Beneficial Senior Noteholders (as defined below) who wish to appoint themselves as proxyholder to participate or vote at the Meeting). In order to appoint such other person (a “Third Party Proxyholder”), the Senior Noteholder must submit his, her or its proxy or voting instruction form (as applicable) appointing such third party proxyholder.

· Submit your proxy or voting instruction form:

To appoint a Third Party Proxyholder, insert such person’s name in the blank space provided in the Form of Proxy or Voting Instruction Form and follow the instructions for submitting such form of proxy or voting instruction form.

If you are a Beneficial Senior Noteholder (other than one located in the United States) and wish to participate or vote at the Meeting, you have to insert your own name in the space provided on the voting instruction form sent to you by your Intermediary and follow all of the applicable instructions provided by your Intermediary. By doing so, you are instructing your Intermediary to appoint you as proxyholder. It is important that you comply with the signature and return instructions provided by your Intermediary.

If you are a Beneficial Senior Noteholder located in the United States and wish to participate or vote at the Meeting or, if permitted, appoint a third party as your proxyholder, you must obtain a valid legal proxy from your Intermediary. Follow the instructions from your Intermediary included with the Voting Instruction Form sent to you or contact your Intermediary to request a legal proxy if you have not received one. After obtaining a valid legal proxy from your Intermediary, you must then submit such legal proxy to the Indenture Trustee. Requests for registration from Beneficial Senior Noteholders located in the United States that wish to participate or vote at the Meeting or, if permitted, appoint a third party as their proxyholder must be sent by email to corptrust@odysseytrust.com and received by no later than 4:00 p.m. (Eastern time) on December 11, 2023.

A proxy will not be valid unless the completed Form of Proxy is received by the Indenture Trustee (Odyssey Trust Company, Attn: Proxy Department, 67 Yonge Street, Suite 702, Toronto, Ontario M5E 1J8) by 10:00 a.m. on December 13, 2023. The deadline for deposit of proxies may be waived or extended by the chairperson of the Meeting at his or her discretion, without notice. The chairperson of the Meeting is under no obligation to accept or reject any particular late proxy.

Exercise of Discretion by Proxies

The person named in the enclosed Form of Proxy or Voting Instruction Form will vote the Senior Notes in respect of which he is appointed as proxy in accordance with the instructions of the Senior Noteholders appointing him. If a Senior Noteholder specifies a choice with respect to any matter to be acted upon, the Senior Notes will be voted accordingly. If no instructions are given as to how to vote on a particular issue to be decided at the Meeting, or if both choices have been specified by the Senior Noteholder, the Senior Notes will be voted FOR the Arrangement Resolution (as defined below and as set out in Appendix “A”).

The enclosed Form of Proxy or Voting Instruction Form confers discretionary authority upon the persons named therein with respect to amendments or variations to matters identified in the Notice of Meeting, and with respect to other business which may properly come before the Meeting or any adjournment(s) or postponement(s) thereof. If any such amendment or other business properly comes before the Meeting, or any postponement(s) or adjournment(s) thereof, the person named in the enclosed Form of Proxy or Voting Instruction Form will vote in accordance with their best judgment on such matters or business. As of the date hereof, management of the Corporation knows of no such amendment, variation or other business to come before the Meeting.

Voting of Proxies

Senior Noteholders may vote by proxy before the Meeting or vote at the Meeting, as described below:

Voting by Proxy before the Meeting

Senior Noteholders may vote before the Meeting by completing the Form of Proxy or Voting Instruction Form in accordance with the instructions provided therein. Beneficial Senior Noteholders should also carefully follow all instructions provided by their intermediaries to ensure that their Senior Notes are voted at the Meeting. Voting by proxy is the easiest way to vote. It means you are giving someone else the authority to virtually attend the Meeting and vote on your behalf.

The AYR Proxyholder named in the enclosed Form of Proxy or Voting Instruction Form will vote the Senior Notes in respect of which he is appointed as proxy in accordance with your instructions, including on any ballot that may be called. If there are changes to the items of business or new items properly come before the Meeting, or any adjournment(s) or postponement(s) thereof, a proxyholder can vote as he or she sees fit.

You can appoint someone else to be your proxy. This person does not need to be a Senior Noteholder. See the section above entitled “Appointment of Proxies”.

There are two ways for registered Senior Noteholders to vote by proxy before the Meeting:

Proxies, whether submitted through email or by mail as described above, must be received by the Indenture Trustee (Odyssey Trust Company, Attn: Proxy Department, 67 Yonge Street, Suite 702, Toronto, Ontario M5E 1J8) by no later than 10:00 a.m. (Eastern time) on December 13, 2023 or, if the Meeting is adjourned or postponed, not less than 48 hours (excluding Saturdays, Sundays and holidays) prior to any adjournment or postponement thereof. Persons appointed as proxyholders need not be Senior Noteholders. Your Senior Notes will be voted in accordance with your instructions as indicated on the proxy. The deadline for the deposit of proxies may be waived or extended by the chairperson of the Meeting at his or her discretion, without notice. Voting Instruction Forms may be subject to earlier deadlines imposed by intermediaries.

Information contained in this Circular is given as of November 15, 2023, unless otherwise specifically stated.

Advice to Beneficial Senior Noteholders

If you hold a beneficial interest in Senior Notes (referred to herein as a “Beneficial Senior Noteholder”) you should promptly contact your broker or other Intermediary and obtain and follow their instructions with respect to voting.

Applicable regulatory policy requires brokers and other intermediaries to seek voting instructions from Beneficial Senior Noteholders in advance of meetings. Every broker and Intermediary has its own mailing procedures and provides its own return instructions, which should be carefully followed by Beneficial Senior Noteholders in order to ensure that their Senior Notes are voted at the Meeting. You should contact your broker or other Intermediary to obtain instructions and a voting instruction form to complete and return to your broker or other Intermediary.

A Beneficial Senior Noteholder receiving a voting instruction form from its broker or other Intermediary cannot use that voting instruction form to vote Senior Notes directly at the Meeting. Although Beneficial Senior Noteholders may not be recognized directly at the Meeting for the purposes of voting Senior Notes, a Beneficial Senior Noteholder may attend the Meeting as a proxyholder and vote Senior Notes in that capacity. If a Beneficial Senior Noteholder wishes to attend the Meeting to vote in person, such Beneficial Senior Noteholder must do so as proxyholder for the registered Senior Noteholder. See “Appointment of Proxies”.

A Beneficial Senior Noteholder may revoke a voting instruction form provided by its broker or other Intermediary in accordance with the instructions provided therein.

Quorum

A quorum at the Meeting is Senior Noteholders of at least 25% of the aggregate principal amount of Senior Notes then outstanding present in person or represented by proxy. If a quorum is not present at the Meeting, the Meeting may be adjourned to the second following Business Day (as defined in the Existing Indenture) at the same time and place and no notice shall be required to be given in respect of such adjourned meeting. At the adjourned Meeting, the Senior Noteholders present in person or by proxy shall form a quorum and may transact the business for which the Meeting was originally convened, notwithstanding that less than 25% of the aggregate principal amount of Senior Notes then outstanding may not be present at the adjourned Meeting. Any business may be brought before or dealt with at an adjourned meeting which might have been brought before or dealt with at the original meeting in accordance with the notice calling the same.

Amendment, Cancellation or Termination of the Meeting

The Corporation reserves the right to amend or vary the terms of the solicitation of proxies and voting instructions at any time prior to the Meeting by notifying Senior Noteholders by making a public announcement by press release relating to such amendment or variation.

The Corporation also reserves the right to cancel or terminate the Meeting, in its sole discretion, for any reason whatsoever by making a public announcement by press release relating to such decision.

Without limiting the manner in which any public announcement may be made, the Corporation shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a press release through a newswire service.

INFORMATION AGENT

Carson Proxy Advisors has been appointed as proxy solicitation and information agent in connection with the Meeting and will provide customary services in connection with such appointment.

Carson Proxy Advisors does not assume any responsibility for the accuracy or completeness of the information concerning the Corporation or its affiliates contained herein and other related documents or for any failure by the Corporation to disclose events that may have occurred and may affect the significance or accuracy of such information.

FEES AND EXPENSES

The Corporation will pay the Indenture Trustee and Carson Proxy Advisors customary fees for their services in connection with the Meeting and will reimburse the Indenture Trustee and Carson Proxy Advisors for their reasonable out-of-pocket expenses in connection therewith.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents which have been publicly filed on SEDAR+ at www.sedarplus.ca or with the securities commission or similar regulatory authority in each of the provinces and territories of Canada, are specifically incorporated by reference into, and form an integral part of this Circular:

Material change reports (other than confidential reports), business acquisition reports, interim financial statements and all other documents of the type referred to above after the date of this Circular and before completion or withdrawal of the Transaction will be deemed to be incorporated by reference into this Circular.

Any statement contained in a document incorporated or deemed to be incorporated by reference herein will be deemed to be modified or superseded for the purposes of this Circular to the extent that a statement contained in this Circular or in any subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded will not constitute a part of this Circular, except as so modified or superseded. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of such a modifying or superseding statement will not be deemed an admission for any purpose that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Copies of documents incorporated herein by reference may be obtained upon request made via email to IR@ayrwellness.com and are also available electronically on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov or on the Corporation’s website at www.ayrwellness.com.

FORWARD-LOOKING STATEMENTS

This Circular and the documents incorporated by reference herein contain certain “forward-looking statements” and “forward-looking information” within the meaning of applicable securities laws, including Canadian securities laws and United States securities laws (collectively, “Forward-looking Statements”). All information, other than statements of historical facts, included in this Circular and the documents incorporated by reference herein, including estimates, plans, expectations, opinions, forecasts, projections, targets and guidance, constitutes forward-looking information. Forward-looking Statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as “pro forma”, “expects”, “anticipates”, “plans”, “believes”, “estimates”, “intends”, “targets”, “projects”, “forecasts”, “seeks”, “likely” or negative versions thereof and other similar expressions, or future or conditional verbs such as “may”, “will”, “should”, “would” and “could”.

By their nature, Forward-looking Statements are subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of material factors, many of which are beyond the Corporation’s control, could affect operations, business, financial condition, performance and results of the Corporation that may be expressed or implied by such Forward-looking Statements and could cause actual results to differ materially from current expectations of estimated or anticipated events or results.

These factors include, but are not limited to, the following:

No assurance can be given that the Corporation’s expectations will prove to be correct and such forward-looking information included in this Circular should not be unduly relied upon, and the Corporation does not undertake any obligation to revise or update any forward-looking information or statements other than as expressly required by applicable law. In making these statements, in addition to those described above and elsewhere herein, the Corporation has made assumptions with respect to, without limitation, the ability to complete the Transaction, the ability to comply with its debt covenants and service or refinance its debt, receipt of requisite regulatory approvals on a timely basis, receipt and/or maintenance of required licenses and third-party consents in a timely manner, no unplanned materially adverse changes to its facilities, assets, customer base, licenses and the economic conditions affecting the Corporation’s current and proposed operations. These assumptions, although considered reasonable by the Corporation at the time of preparation, may prove to be incorrect. In addition, the Corporation has assumed that there will be no material adverse change to the current regulatory landscape affecting the cannabis industry and has also assumed that the Corporation will remain compliant in the future with all state and local laws, regulations and rules imposed upon it by law. The Corporation’s forward-looking information is expressly qualified in its entirety by this cautionary statement.

NOTICE TO SENIOR NOTEHOLDERS IN THE UNITED STATES

NEITHER THE NEW 2026 NOTES NOR THE NEW AYR SHARES NOR THE BACKSTOP SHARES HAVE OR WILL BE REGISTERED UNDER THE U.S. SECURITIES ACT. THE NEW 2026 EXCHANGE NOTES AND THE NEW AYR EXCHANGE SHARES WILL BE ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT PROVIDED BY SECTION 3(a)(10) THEREUNDER. THE NEW 2026 ADDITIONAL NOTES AND THE BACKSTOP SHARES WILL BE ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT PROVIDED BY SECTION 4(a)(2) THEREUNDER.

NEITHER THE NEW 2026 NOTES NOR THE NEW AYR SHARES NOR THE BACKSTOP SHARES HAVE BEEN APPROVED OR DISAPPROVED BY THE U.S. SECURITIES AND EXCHANGE COMMISSION (“SEC”) OR ANY U.S. STATE SECURITIES COMMISSION NOR HAS THE SEC OR ANY U.S. STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE OFFER AND CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The Arrangement is being made in accordance with the disclosure requirements of Canadian securities laws. Senior Noteholders should be aware that such requirements are different from those of the United States.

Senior Noteholders in the United States should be aware that the Arrangement as described herein may have tax consequences both in the United States and in Canada. Such consequences in the United States have not been described herein and Senior Noteholders are encouraged to consult their tax advisors.

The solicitation of proxies contemplated hereby are being effected in accordance with Canadian corporate and securities laws. The proxy solicitation rules under the U.S. Securities Exchange Act of 1934 are not applicable to the Corporation or this solicitation. Senior Noteholders should be aware that proxy solicitation and disclosure requirements under Canadian laws are different from those requirements under U.S. securities laws.

It may be difficult for you to enforce your rights and any claim you may have arising under the U.S. securities laws, since the Corporation is incorporated in Canada and its articles include British Columbia-based forum selection provisions.

DESCRIPTION OF THE ARRANGEMENT

The Arrangement contemplates a series of steps and transactions that are designed to lead to the successful extension of U.S.$243.25 million of secured senior obligations of the Corporation for two years and the receipt of additional capital that will be used to continue the Corporation’s deleveraging efforts and for general working capital, as well as the extension for two years of U.S.$87.3 million aggregate principal amount of Seller Notes. The Arrangement contemplates the following:

(a) the issuance of the Anti-Dilutive Warrants;

(b) the exchange of the Senior Notes for the New 2026 Notes and the New AYR shares;

(c) the offering of the New 2026 Additional Notes; and

(d) the issuance of the Backstop Funding Premium.

Assuming the Arrangement is completed, there will be approximately: (i) $293.25 million aggregate principal amount of New 2026 Notes outstanding pursuant to the Amended and Restated Indenture, which is attached hereto as Appendix “G”; and (ii) 139,673,134 issued and outstanding AYR SVS Shares (on a fully-diluted basis assuming the exercise of all MVS shares, AYR Exchangeable Shares, currently granted restricted stock units (“RSUs”) and the Anti-Dilutive Warrants, and including the New AYR Exchange Shares and the Backstop Shares (but excluding both the existing approximately 2.9 million warrants which are exercisable until May 2024 at U.S.$9.07 per share and the treasury shares)). The Arrangement will be filed in respect of AYR Newco, which is a newly formed, wholly-owned, subsidiary of AYR incorporated under the CBCA. The Arrangement is proposed to be completed pursuant to section 192 of the CBCA subject to being approved pursuant to the Final Order, the receipt of all required U.S. state regulatory approvals and the satisfaction or waiver of all other conditions in the Support Agreement and the Plan.

Background to the Arrangement

Beginning in late 2022, the Corporation began to evaluate potential strategic options to address its upcoming significant debt maturities. At the time, the Corporation and its subsidiaries had approximately $391 million of outstanding indebtedness in the aggregate, with approximately $243 million of Senior Notes and approximately $148 million attributable to seller notes, vendor take back notes, or assumed debt, in each case from historical M&A transactions (collectively, the “Seller Notes”).

In October 2022, the Corporation engaged Moelis as financial advisor and investment banker in connection with a potential transaction or series of transactions to address a material portion of the Corporation’s liabilities, including to assist in engaging in negotiations with various holders of Seller Notes (collectively, the “Seller Noteholders”) as well as holders of Senior Notes (collectively, the “Senior Noteholders”). Additionally, the Corporation engaged Stikeman and Weil in November 2022 to act as counsel to the Corporation in connection with any potential transaction(s).

In January 2023, the Board authorized Moelis to initiate outreach to the AYR Entities’ existing lenders to pursue extensions of the AYR Entities’ indebtedness.

In February 2023, Moelis initiated outreach to the largest holders of Seller Notes and certain other debt obligations to negotiate maturity date extensions and other amendments. During the course of negotiations, the Corporation entered into non-disclosure agreements (“NDAs”) with various Seller Noteholders and, following arms-length negotiations, ultimately entered into a number of agreements to extend the maturity dates under certain of the Seller Notes and other debt obligations, certain of which are contingent on the effectiveness of a two-year extension of the maturity date of the Senior Notes (the “Senior Note Extension Date”), and certain of which were contingent on a certain percentage of the holders of the Senior Notes agreeing in writing to extend the maturity date of the Senior Notes by at least two years, as described below. As of the date hereof, subject to the occurrence of the Senior Note Extension Date, the agreed amendments will result in the extension of maturity dates for an aggregate amount of $82 million (excluding renegotiated earn out obligations described below) of debt under the Seller Notes. Further detail on the negotiations with the various holders of Seller Notes and other obligations is set forth below.

In June 2023, Moelis contacted certain known holders of Senior Notes to let them know that the Corporation was interested in discussing a potential amendment to the Senior Notes to extend the maturity date. Following such discussions, certain holders of Senior Notes (the “Initial Supporting Senior Noteholders”, which holders are also now members of the Supporting Senior Noteholders) engaged Ducera Partners LLC (“Ducera”) as a financial advisor, Paul Hastings LLC (“Paul Hastings”) as U.S. counsel, and Goodmans LLP (“Goodmans”) as Canadian counsel.

In June and July 2023, the Corporation entered into NDAs with Ducera, Paul Hastings and Goodmans to permit the sharing of certain confidential information regarding AYR’s business, including its operations and finances and other diligence related to the Senior Notes and AYR, and subsequently entered into fee letters with Ducera, Paul Hastings, and Goodmans that provided for the Corporation to pay their fees and expenses in connection with a potential transaction with the Initial Supporting Senior Noteholders.

In July 2023, the senior management team at AYR prepared a management presentation related to the operations and financial outlook for AYR’s business that would ultimately be presented to the Initial Supporting Senior Noteholders, and such management presentation was reviewed by the Board. In August 2023, the management presentation and supporting materials were shared with the financial and legal advisors of the Initial Supporting Senior Noteholders on a confidential and “professional eyes only” basis.

Following delivery of the management presentation, AYR negotiated the entering into of NDAs with the Initial Supporting Senior Noteholders, who collectively held approximately 67% of the principal amount of the Senior Notes, which such NDAs were executed on August 14, 2023. The terms of the NDAs included agreed upon procedures for the cleansing of material non-public information following termination of the confidentiality agreements.

Upon execution of the NDAs, the Initial Supporting Senior Noteholders were provided the management presentation and met with members of the Corporation’s senior management and the Corporation’s legal and financial advisors to review and ask questions about the contents of the management presentation. The Corporation also delivered an initial proposal which provided for a two-year extension of the Senior Notes in exchange for a 1.0% payment-in-kind (“PIK”) amendment fee.

The Special Committee was formed on August 30, 2023. The Board authorized the Special Committee to, among other things, negotiate and enter into definitive agreements with counterparties for any transaction it deemed to be in the best interests of the Corporation. A meeting of the Special Committee was held on September 1, 2023 to review in their capacity as members of the Special Committee, among other things, the negotiation process and various amendment agreements with the Seller Noteholders, the status of the debt and equity capital markets for U.S. cannabis companies, and the status of discussions with the Initial Supporting Senior Noteholders.

On September 7, 2023, the Initial Supporting Senior Noteholders provided a two part restructuring transaction proposal that contemplated a comprehensive restructuring of the Seller Notes and the Senior Notes into a first lien / second lien / third lien capital structure. The proposal included the issuance of AYR SVS Shares to the holders of Senior Notes as well as the issuance of new third lien convertible notes, and also provided the consenting Senior Noteholders with certain governance rights in respect of the Corporation.

The Special Committee met with the Corporation’s financial and legal advisors on September 10, 2023 to review the initial proposal and determined that it was not in the best interests of the Corporation, due to, among other reasons, the dilution to AYR Shareholders that the proposal contemplated, and the numerous credit parties that would be required to consent to or otherwise participate in the comprehensive restructuring. In this respect, there were concerns that any comprehensive restructuring proposal could take significant time to implement, assuming it were achievable at all. The Special Committee met again on September 13, 2023, and September 14, 2023 with the Corporation’s legal and professional advisors to review, ask questions, and prepare a counterproposal to the Initial Supporting Senior Noteholders.

On September 15, 2023, the Corporation delivered a counterproposal to the Initial Supporting Senior Noteholders with two transactions to be pursued in parallel: (i) a consensual extension transaction with economics to consenting Senior Noteholders in exchange for a two-year maturity extension; and (ii) a comprehensive debt restructuring providing for a three-tiered capital structure, the pursuit of which would be subject to achieving milestones in a timely manner, and, if the milestones were not achieved, the consensual extension transaction would be the sole path pursued.

On September 19, 2023, the Special Committee met again to discuss the status of negotiations and ask questions of the Corporation’s legal and financial advisors.

On September 21, 2023, the Corporation received another proposal from the Initial Supporting Senior Noteholders that contemplated an exchange of the Senior Notes into notes maturing December 2026, a U.S.$40 million new money investment (pursuant to an offering of approximately U.S.$53 million of new notes due 2026 with an original issue discount), a requirement that the Corporation raise a minimum of $20 million of equity capital, a requirement that the Senior Noteholders receive a certain percentage of common equity on a fully diluted pro-forma basis at closing, additional financial covenants, additional credit support and collateral, and a requirement that the Corporation secure additional extensions or restructurings of Seller Notes on terms acceptable to the Initial Supporting Senior Noteholders.

On September 24, 2023, the Special Committee met with the Corporation’s financial and legal advisors to develop a counterproposal to the Initial Supporting Senior Noteholders. The counterproposal, which the Corporation delivered to the Initial Supporting Senior Noteholders on September 26, 2023, included a similar framework for a consensual transaction, but with better economic terms, including an exchange of Senior Notes into notes maturing December 2026 (with a lower interest rate), an option for the Corporation to draw down on up to U.S.$40 million of new money provided by one or more of the Supporting Senior Noteholders (issuable as additional new notes due 2026 with a lower original issue discount), and the issuance of AYR’s outstanding shares on a fully-diluted and pro-forma basis to the Senior Noteholders. The Corporation also revised the additional financial covenants proposed by the Initial Supporting Senior Noteholders in a manner that would allow for improved operating flexibility and better position the Corporation to execute on its business plan.

Over the course of the next five weeks, the Initial Supporting Senior Noteholders, the Corporation and its financial and legal advisors continued to negotiate terms, including economic terms, covenants, collateral, milestones and implementation process, and dilution to existing AYR Shareholders. During this period, the advisors exchanged numerous proposals. Throughout this time period, the Special Committee met with the Corporation’s legal and financial advisors and received presentations on the status of negotiations from the Corporation’s advisors to ask questions and provide instructions to management and advisors. On October 20, 2023, the Corporation executed NDAs with additional holders of the Senior Notes who became Supporting Senior Noteholders, who in the aggregate hold in excess of 75% of the principal amount of the Senior Notes.

In parallel to the negotiations with the Initial Supporting Senior Noteholders, with the support of the Special Committee, Moelis contacted select third-party debt capital providers to evaluate the possibility of a partial or total financing to determine if there was an opportunity to refinance the Senior Notes on more favourable terms than those being offered by the Initial Supporting Senior Noteholders.

Following such efforts, the Special Committee was advised by Moelis that there were no reasonable prospects at the time to refinance the Senior Notes. Notwithstanding the lack of alternative refinancing options or alternative transactions available at the time, the Special Committee and the Corporation’s advisors determined that it would be important for any agreement with the Initial Supporting Senior Noteholders to include a fiduciary out in the event an alternative transaction structure or refinancing opportunity arose during the implementation process that had better terms than those being proposed by the Initial Supporting Senior Noteholders.

As the negotiations advanced with the Initial Supporting Senior Noteholders, Stikeman prepared a confidential letter to the CSE outlining the ongoing negotiations and potential terms of the Arrangement, including the potential issuance of the New AYR Exchange Shares, Backstop Shares and Anti-Dilutive Warrants. Following review of the confidential submission, the CSE confirmed to the Corporation that the Arrangement would not require shareholder approval under the rules and polices of the CSE given the nature of the transaction.

On October 29, 2023, the Special Committee met with the Corporation’s legal and financial advisors and received a presentation on the latest terms negotiated with the Supporting Senior Noteholders. At this meeting the Special Committee also received a fairness opinion from Koger, which provided that the proposed transaction was fair from a financial perspective to the Senior Noteholders and the Corporation’s shareholders. The Special Committee also met separately with Koger to review and ask questions in respect of the fairness opinion and analysis related thereto. The latest set of terms also represented the only viable alternative for achieving a maturity extension that would provide the Corporation with additional runway as there were no alternatives available that would allow the Corporation to refinance or extend the Senior Notes on more favourable terms than the latest terms negotiated with the Supporting Senior Noteholders. In addition, following the extensive, arm’s length negotiations, the Special Committee was satisfied that there had been material improvements in the terms of the Transaction for the Corporation and its shareholders compared to earlier proposals from the Initial Supporting Senior Noteholders, including in respect of the proposed dilution of shareholders.

Following the meeting, the Special Committee determined that the Transaction was in the best interests of the Corporation, and fair from a financial point of view to the holders of Senior Notes and AYR Shareholders, and instructed management to proceed with finalizing the Support Agreement, the term sheet attached thereto as Schedule B (the “Term Sheet”), and the Backstop Commitment Letter. The terms of these agreements were ultimately settled and executed on October 31, 2023, with Mercer Park CB, L.P., AYR’s principal shareholder, indicating it was supportive of the transactions described therein.

Reasons for the Arrangement

The following is a summary of the principal reasons for the recommendation of the Special Committee that Senior Noteholders VOTE FOR the Transaction. In view of the variety of factors and the amount of information considered in connection with the Transaction, the Special Committee did not quantify or otherwise attempt to assign any relative weight to each of the specific factors considered in reaching its conclusions and recommendations. Individual members of the Special Committee may have assigned different weights to different factors.

The Transaction

The Transaction will be implemented pursuant to the Arrangement. Subject to Court approval pursuant to the Final Order and the specific terms of the Arrangement, the Senior Notes would be transferred by the Senior Noteholders to AYR Newco and the Senior Noteholders at the Effective Time would receive, as part of the Arrangement:

AYR Newco may be wound up into or amalgamated (following the continuance of AYR Newco) with AYR following closing of the Transaction, such that the New 2026 Notes would become direct obligations of the Corporation. The New 2026 Notes will have additional (and modified) covenants, events of default and an enhanced collateral package in comparison to the Senior Notes.

The implementation of the Arrangement is subject to and conditional upon all required Court and any applicable state cannabis regulatory approvals and the satisfaction or waiver of the other conditions included in the Support Agreement and the Plan. Shareholder approval is not required by the CSE or under CSE rules and is not a condition of closing of the Transaction.

Pursuant to the Support Agreement, it is a condition to the completion of the Arrangement that the New AYR Shares and the New 2026 Notes not be subject to a restricted period (other than the six-month contractual lock-up agreed to in the Support Agreement) or to a statutory hold period under Canadian or U.S. securities laws, or to any resale restriction under the rules, policies or requirements of the CSE.

Offering of New 2026 Additional Notes

The Supporting Senior Noteholders were offered the opportunity to participate in an issuance of New 2026 Additional Notes in an aggregate principal amount of U.S.$50 million (inclusive of original issue discount). The New 2026 Additional Notes will be issued with a 20% original issue discount (resulting in U.S.$40 million of net cash proceeds to AYR Newco at closing). The Backstop Provider has entered into the Backstop Commitment Letter pursuant to which the Backstop Provider has agreed to backstop the offering of New 2026 Additional Notes in exchange for payment of the Backstop Funding Premium upon completion of the Transaction. Proceeds of the New 2026 Additional Notes will be used to restructure or repay Seller Notes and for working capital purposes.

Prior to the Effective Date, AYR Newco will enter into subscription agreements with participating Supporting Senior Noteholders (that indicated their desire to participate in the offering of the New 2026 Additional Notes prior to the date hereof) for the purchase of New 2026 Additional Notes that will be purchased at the Effective Time. The New 2026 Additional Notes will be issued as “Additional Notes” under the Amended and Restated Indenture and be treated as a single series of notes with the New 2026 Notes.

Backstop Commitment for New 2026 Additional Notes

Pursuant to the Backstop Commitment Letter entered into concurrent with the execution of the Support Agreement, the Backstop Provider has agreed to subscribe for any New 2026 Additional Notes not otherwise subscribed for prior to the Effective Time. In return for entering into the Backstop Commitment Letter and agreeing to subscribe for up to all of the New 2026 Additional Notes, AYR has agreed to pay the Backstop Funding Premium, which is satisfied through the issuance of Backstop Shares equal to 5.1% of the issued and outstanding AYR SVS Shares on a fully-diluted and pro-forma basis (excluding each of the existing approximately 2.9 million warrants which are exercisable until May 2024 at U.S.$9.07 per share, the treasury shares and the new Anti-Dilutive Warrants) and subject to receipt by AYR Newco of subscription proceeds in the aggregate amount of U.S.$40 million.

Anti-Dilutive Warrants

In order to reduce the dilutive effect of the New AYR Exchange Shares and the Backstop Shares on existing AYR Shareholders, existing AYR Shareholders (excluding the recipients of the New AYR Exchange Shares and the Backstop Shares) and existing AYR Exchangeable Shareholders will be granted Anti-Dilutive Warrants to acquire up to 16.5% of the outstanding AYR SVS Shares (including the New AYR Exchange Shares and the Backstop Shares) on a fully-diluted and pro-forma basis (assuming their exercised in full). If fully exercised, the Anti-Dilutive Warrants would effectively dilute the New AYR Exchange Shares and the Backstop Shares from 30% to approximately 25% of the fully-diluted outstanding AYR SVS Shares (excluding both the existing approximately 2.9 million warrants which are exercisable until May 2024 at U.S.$9.07 per share and the treasury shares). The Anti-Dilutive Warrants will be exercisable at U.S.$2.12 per share for a period of two years from the closing of the Transaction. The Anti-Dilutive Warrants will only be exercisable outside the United States pursuant to Regulation S under the U.S. Securities Act or inside the United States by Accredited Investors in compliance with the U.S. securities laws or in compliance with another exemption from the registration requirements of the U.S. Securities Act, and in each case, in compliance with any applicable local securities laws. Any proceeds of the exercise by existing AYR Shareholders of the Anti-Dilutive Warrants will be used to make an offer to pay down the New 2026 Notes at par, thus reducing the Corporation’s debt, and otherwise for general corporate purposes. The Supporting Senior Noteholders are supportive of the issuance of the Anti-Dilutive Warrants.

Governance Rights

At closing of the Transaction, subject to the Supporting Senior Noteholders receiving at least a majority of the aggregate principal amount of New 2026 Notes, the Supporting Senior Noteholders holding a majority of the New 2026 Notes will be granted the right to appoint one independent director (with no affiliation to competitors of AYR) to the Board. In addition, the Supporting Senior Noteholders will be entitled to nominate one independent director at each annual meeting of the Corporation until the earlier of the repayment or refinancing of the New 2026 Notes or such Supporting Senior Noteholders ceasing to hold a majority of the New 2026 Notes. In addition, the Supporting Senior Noteholders will be granted customary pre-emptive rights to acquire additional equity of AYR to maintain their respective proportionate equity interests.

Payment of Accrued and Unpaid Interest

All accrued but unpaid interest on the Senior Notes up to but excluding the Effective Date shall be paid to Holders of Senior Notes in accordance with the standing instructions and customary practices of the Indenture Trustee. From and after the Effective Date, all interest payable on the Senior Notes shall accrue to AYR Newco as holder of the Senior Notes following completion of the Arrangement.

Conditions to the Arrangement

The Arrangement is subject to the following conditions, among others:

Releases

As of the Effective Date, each of the Released Parties (as defined in the Plan) shall be released and discharged from all actions, causes of action, damages, judgments, executions, obligations, liabilities and Claims of any kind or nature whatsoever arising on or prior to the Effective Date in connection with the Senior Notes, the Senior Notes Documents, the New AYR Exchange Shares, the Backstop Shares, the Anti-Dilutive Warrants, the Support Agreement, the Arrangement, the Plan, the CBCA Proceedings and any other proceedings commenced with respect to or in connection with the Plan, the transactions contemplated hereunder, and any other actions or matters related directly or indirectly to the foregoing; provided that nothing in this paragraph shall release or discharge the following (i) any of the Released Parties from or in respect of their respective obligations under the Plan, the New 2026 Notes (including the Amended and Restated Indenture and the other New 2026 Notes Documents solely as they relate to the New 2026 Notes), the New Guarantees, the Warrant Agency Agreement, the Anti-Dilutive Warrants, or any Order or document ancillary to any of the foregoing, (ii) any director or officer of AYR or AYR Newco or any other AYR Entity of their right to indemnity, insurance claims, and employment related rights or claims, (iii) any inter-company obligations between or among AYR, AYR Newco or any other AYR Entity on or before the Effective Date, or any Senior Notes held by AYR Newco thereafter, (iv) the Backstop Commitment Letter in the event that AYR Newco does not receive subscription proceeds for the New 2026 Additional Notes in the aggregate amount of U.S.$40,000,000, (v) AYR Newco’s right to seek repayment of the Senior Notes solely as against AYR and the Existing Guarantors (and, for greater certainty, such right to seek repayment shall not extent to the other Released Parties (as defined in the Plan), or (vi) any act or omission arising out of any Released Party’s gross negligence, actual and intentional fraud, willful misconduct, or criminal acts (as determined by a final non-appealable order from a court of competent jurisdiction). The foregoing release shall not be construed to prohibit a party in interest from seeking to enforce the terms of the Plan or any contract or agreement entered into pursuant to, in connection with or contemplated by the Plan.

Procedures

Issuance of New 2026 Notes and New 2026 Additional Notes

The New 2026 Notes to be issued to the Senior Noteholders pursuant to the Plan shall be made by way of issuance by AYR Newco on the Effective Date of one or more global notes in respect of the New 2026 Notes, authenticated by the Indenture Trustee, and issued in the name of CDS (or its nominee) in respect of the Senior Noteholders, other than certain Holders of New 2026 Notes (or their Intermediaries (as defined in the Plan)), who will receive DRS Advices or definitive certificates representing the New 2026 Notes from the Indenture Trustee. Any definitive certificates shall be held by the Depositary until such time as the applicable Senior Noteholder delivers a duly completed Letter of Transmittal and surrenders its Senior Notes in accordance with Section 3.2 of the Plan.

The New 2026 Additional Notes to be issued to the New 2026 Notes Purchasers pursuant to the Plan will, following the receipt by AYR Newco or AYR of the subscription price therefor, be delivered by providing a DRS Advice (which shall include a legend in connection with their status as restricted securities under U.S. securities laws) in the name of the applicable recipients thereof and registered in AYR’s records, which will be maintained by the Indenture Trustee, following the issuance of the New 2026 Additional Notes.

Surrender of Senior Notes

On the Effective Date, CDS (or its nominee) as a registered Senior Noteholder on behalf of certain of the Senior Noteholders shall surrender, or cause the surrender of, the Senior Notes it holds in exchange for the portion of the consideration payable to it as a Senior Noteholder pursuant to the Arrangement. At the Effective Time, each Senior Noteholders whose Senior Notes are represented by a DRS Advice shall be deemed to have surrendered and transferred (free and clear of all liens and encumbrances), without any further action by the Senior Noteholders, the Senior Notes represented by DRS Advice to AYR Newco in exchange for the portion of the consideration payable to it as a Senior Noteholders pursuant to the Arrangement. On the Effective Date, each Senior Noteholder holding a certificate representing Senior Notes shall surrender, or cause the surrender of, the certificate(s) representing the Senior Notes to the Depositary (with a duly completed Letter of Transmittal) in exchange for the portion of the consideration payable to the Senior Noteholder under the Arrangement. For greater clarity, only Senior Noteholders whose Senior Notes are represented by physical certificates are required to submit a duly completed Letter of Transmittal when surrendering such Senior Notes. Senior Noteholder’s whose Senior Notes are represented by a DRS Advice are not required to surrender their DRS Advice or a Letter of Transmittal prior to receiving their New 2026 Notes as such Senior Noteholder will be deemed to have transferred title to the Senior Notes to AYR Newco at the Effective Time in accordance with the Plan and will be issued a new DRS Advice representing an equivalent amount of New 2026 Notes without any further action required on its part.

Issuance of New AYR Shares and Backstop Shares

The New AYR Shares and the Backstop Shares to be issued to the Senior Noteholders and the Backstop Provider (subject to receipt from the New 2026 Notes Purchasers of subscription proceeds for the New 2026 Additional Notes in the aggregate amount of U.S.$40 million) pursuant to the Plan shall be deemed to be duly authorized, validly issued, fully paid and non-assessable.

On the Effective Date, AYR shall deliver a treasury direction to the Transfer Agent that directs the Transfer Agent to issue the New AYR Shares and the Backstop Shares (subject to receipt from the New 2026 Notes Purchasers of subscription proceeds for the New 2026 Additional Notes in the aggregate amount of U.S.$40 million) to be distributed under the Plan, subject to Section 3.3(c) and Section 3.6 of the Plan.

The New AYR Shares to be issued under the Plan to the Senior Noteholders will be deposited with the Depositary and, subject to Section 3.2 of the Plan, made either (i) through the facilities of CDS who, in turn, will make delivery of the New AYR Shares to the ultimate beneficial recipients thereof pursuant to standing instructions and customary practices of CDS, as applicable, or (ii) by providing DRS Advices or confirmations in the name of the applicable recipient thereof (or its Intermediary) and registered in AYR’s records which will be maintained by the Transfer Agent, following surrender of the Senior Notes in accordance with Section 3.2 and Section 3.6 of the Plan.

The Backstop Shares to be issued under the Plan to the Backstop Provider will be delivered by providing a DRS Advice (which shall include a legend in connection with their status as restricted securities under U.S. securities laws) in the name of the applicable recipient thereof and registered in AYR’s records, which will be maintained by the Transfer Agent, following the issuance of the New 2026 Additional Notes.

Issuance of Anti-Dilutive Warrants

On the Effective Date, the Corporation shall deliver: (i) a direction to the Warrant Agent instructing the Warrant Agent to issue the Anti-Dilutive Warrants, to be distributed under the Plan; and (ii) a reservation order to the Transfer Agent such that the number of AYR SVS Shares issuable upon exercise of the Anti-Dilutive Warrants are reserved for issuance in the capital of the Corporation. Thereafter, the Warrant Agent shall distribute the Anti-Dilutive Warrants (x) through the facilities of CDS who, in turn, will make delivery of the Anti-Dilutive Warrants to the ultimate beneficial recipients thereof pursuant to standing instructions and customary practices of CDS, as applicable, and/or (y) by providing DRS Advices or confirmations in the name of the applicable recipient thereof (or its Intermediary) that is an AYR Shareholder or an AYR Exchangeable Shareholder in AYR’s records which are maintained by the Transfer Agent. The Anti-Dilutive Warrants will only be exercisable outside the United States pursuant to Regulation S under the U.S. Securities Act or inside the United States by Accredited Investors in compliance with the U.S. securities laws or in compliance with another exemption from the registration requirements of the U.S. Securities Act, and in each case, in compliance with any applicable local securities laws.

Withholding Rights

Other than as required by the Backstop Commitment Letter, AYR Newco, AYR, the Indenture Trustee, the Transfer Agent, the Warrant Agent and the intermediaries shall be entitled to deduct and withhold from any consideration or other amount deliverable or otherwise payable to any Person hereunder such amounts as they may be required to deduct or withhold with respect to such payment under the Tax Act, or any provision of any applicable federal, provincial, state, local or foreign tax law or treaty, in each case, as amended, provided that any such right to deduct or withhold shall not otherwise change or modify their obligations in respect of withholding taxes under the terms of the Existing Indenture or Amended and Restated Indenture and any and all other documents. To the extent that amounts are so deducted or withheld, such deducted or withheld amounts shall be treated for all purposes hereof as having been paid to the relevant Person in respect of which such deduction and withholding was made. Any such deducted or withheld amounts shall be remitted to the appropriate Governmental Entity.

Fairness Opinion

Koger was asked by the Corporation to provide an opinion to the Special Committee as to the fairness of the Transaction, from a financial point of view, to the Senior Noteholders and AYR Shareholders. Koger rendered an oral fairness opinion to the Special Committee on October 29, 2023 and delivered its written fairness opinion to the Special Committee as of October 31, 2023. Based upon and subject to the various considerations set forth in the Fairness Opinion, the Transaction, if implemented, is fair, from a financial point of view, to the Senior Noteholders and AYR Shareholders. Services provided by Koger relating to the Transaction were on a flat fee basis and are not subject to a success fee.

The full text of the Fairness Opinion is attached as Appendix “F” to this Circular and should be read carefully and in its entirety. The Fairness Opinion describes the scope of the review undertaken by Koger, the assumptions made by Koger, the limitations on the use of the Fairness Opinion, and the basis of Koger’s fairness analysis for the purposes of the Fairness Opinion, among other matters.

The summary of the Fairness Opinion set forth in this Circular is qualified in its entirety by reference to the full text of the Fairness Opinion. Koger has provided its written consent to the inclusion of the Fairness Opinion in this Circular. The Fairness Opinion states that it may not be quoted, summarized, paraphrased, excerpted, referred to or relied upon by any person or entity other than the Special Committee or for any other purpose without the express prior written consent of Koger.

Assumptions

In preparing the Fairness Opinion, Koger assumed that all of the information supplied to it by the management of AYR was accurate and complete. They further assumed that all significant factors, contracts or agreements in effect at the date of the Fairness Opinion that would have an impact as to the conclusions arrived at in such Fairness Opinion have been disclosed to Koger and there are no material undisclosed liabilities. They have further assumed that all licenses, consents and required authorizations have been obtained and are in force for AYR. They have also assumed that AYR does not have any material contingent liabilities other than those disclosed in their financial statements and/or by management that no material litigation (other than as disclosed) is pending or threatened which may have an impact on the Fairness Opinion.

Independence of Koger

The analyses and research used in preparing the Fairness Opinion were carried out solely by Thomas A. Koger, the President of Koger, as an independent and neutral expert. No one has put any restriction on the scope of his work, opinion or conclusions. Koger, and Mr. Koger in his personal capacity, also confirmed that they were independent for the purposes of this engagement and, without limiting the foregoing, have no financial interest or future expected financial interest in any entity involved in the Transaction.

Approach to Fairness

The analyses Koger prepared in issuing the Fairness Opinion must be considered as a whole. In assessing the fairness of the Transaction, from a financial point of view to shareholders of AYR and Senior Noteholders, Koger considered a number of factors including, but not limited to, the following:

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of the principal Canadian federal income tax considerations generally applicable as of the date hereof to (i) a beneficial owner of Senior Notes who disposes of Senior Notes to AYR Newco in exchange for New 2026 Exchange Notes and New AYR Exchange Shares pursuant to the Arrangement (a “Noteholder”) and (ii) a current AYR Shareholder who is the beneficial owner of shares of AYR and that receives Anti-Dilutive Warrants to acquire AYR SVS Shares pursuant to the Arrangement, in each case who (i) holds their Senior Notes or shares of AYR (as applicable) as capital property, and will hold New 2026 Exchange Notes, New AYR Exchange Shares, Anti-Dilutive Warrants, and AYR SVS Shares (as applicable) as capital property, (ii) in the case of Senior Notes and New 2026 Exchange Notes, is entitled to all payments under such notes, and (iii) deals at arm’s length with, and is not affiliated with, AYR or AYR Newco (a “Securityholder”).

Generally, the Senior Notes, the shares of AYR, the New 2026 Exchange Notes, the New AYR Exchange Shares, the Anti-Dilutive Warrants, and the AYR SVS Shares (collectively, the “Securities”) will be considered to be capital property to a Securityholder provided that the Securityholder does not hold the applicable Security in the course of carrying on a business or as part of an adventure or concern in the nature of trade. Certain Securityholders who are resident in Canada for purposes of the Tax Act and whose Securities (other than Anti-Dilutive Warrants) might not otherwise qualify as capital property may, in certain circumstances, be entitled to make an irrevocable election pursuant to subsection 39(4) of the Tax Act the effect of which is to deem such Securities and every other “Canadian security” (as defined in the Tax Act) owned by such Securityholder in the taxation year of the election and all subsequent taxation years to be capital property. This election is not available in respect of Anti-Dilutive Warrants.

This summary does not apply to a Securityholder: (i) that is a “financial institution” within the meaning of Section 142.2 of the Tax Act; (ii) that is a “specified financial institution” as defined in the Tax Act (iii) that reports its “Canadian tax results” within the meaning of the Tax Act in a currency other than Canadian currency; (iv) an interest in which is a “tax shelter investment” for the purposes of the Tax Act; or (v) that has entered into, or will enter into, a “derivative forward agreement” within the meaning of the Tax Act with respect to a Note. Such Securityholders should consult their own tax advisors.

This summary does not address the possible application of the “foreign affiliate dumping” rules in the Tax Act that may be applicable to a Securityholder that is a corporation resident in Canada (for purposes of the Tax Act) and is or becomes, or does not deal at arm’s length with, a corporation resident in Canada that is or becomes, as part of a transaction or event or series of transactions or events that includes the acquisition of the Securities, controlled by a non-resident person or a group of non-resident persons not dealing with each other at arm’s length, in each case for purposes of the rules in section 212.3 of the Tax Act. Securityholders for which this summary does not apply should consult their own tax advisors.

This summary is based upon the current provisions of the Tax Act and counsel’s understanding of the current administrative policies and practices of the Canada Revenue Agency (the “CRA”) made publicly available prior to the date hereof. This summary also takes into account all specific proposals to amend the Tax Act and the regulations thereunder that have been publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Tax Proposals”) and assumes that all such Tax Proposals will be enacted in the form proposed. No assurance can be given that the Tax Proposals will be enacted as proposed or at all. This summary does not otherwise take into account or anticipate any changes in law or in the administrative policies or practices of the CRA, whether by legislative, governmental or judicial action, nor does it take into account any other federal or any provincial, territorial or foreign tax considerations.

This summary is of a general nature only, is not exhaustive of all Canadian federal income tax consequences and is not intended to be, nor should it be construed as, legal or tax advice to any particular Securityholder. Securityholders are urged to consult their own tax advisors concerning the tax consequences to them of the Offer having regard to their own particular circumstances.

Foreign Currency

Generally, for purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of a Security must be converted into Canadian dollars using the rate of exchange quoted by the Bank of Canada on the date such amounts arose, or such other rate of exchange as is acceptable to the CRA. Securityholders may, as a consequence, realize capital gains or capital losses by virtue of changes in the value of the U.S. dollar relative to the Canadian dollar.

Amalgamation or Wind Up of AYR Newco

AYR Newco may be wound up into or amalgamated with AYR following closing of the Transaction, such that the New 2026 Exchange Notes would become direct obligations of the Corporation (the “AYR Note Assumption”). The AYR Note Assumption will constitute a disposition of the New 2026 Exchange Notes by a Noteholder for purposes of the Tax Act. On the AYR Note Assumption, a Noteholder will be deemed to have disposed of the New 2026 Exchange Notes for proceeds equal to the adjusted cost base thereof to such Noteholder immediately before the AYR Note Assumption and to have reacquired such New 2026 Exchange Notes at a cost equal to the same amount. Accordingly, a Noteholder will not realize any gain or loss as a result of the disposition of a New 2026 Exchange Note on the AYR Note Assumption.

Residents of Canada

This portion of the summary is applicable to a Securityholder that, at all relevant times for purposes of the Tax Act, is (or is deemed to be) resident in Canada (a “Resident Holder”).

Disposition of Senior Notes to AYR Newco pursuant to the Arrangement

On a disposition of a Senior Note by a Resident Holder pursuant to the Arrangement, the Resident Holder will generally be required to include in computing its income for the taxation year in which the disposition occurs an amount equal to the interest that has accrued on the Senior Note to the date of the disposition, to the extent that such amount was not otherwise included in computing the Resident Holder’s income for that taxation year or a preceding taxation year.

In addition, on a disposition of a Senior Note pursuant to the Arrangement, a Resident Holder will realize a capital gain (or a capital loss) to the extent that the proceeds of disposition of the Senior Note, net of any amount included in the Resident Holder’s income as interest as well as any reasonable costs of disposition, exceed (or are less than) the adjusted cost base of the Senior Note to the Resident Holder immediately before the disposition. A Resident Holder’s proceeds of disposition of its Senior Notes pursuant to the Arrangement will be an amount equal to the aggregate of the fair market value at the Effective Time of (i) the AYR SVS Shares received by such Resident Holder pursuant to the Arrangement and (ii) the New 2026 Exchange Notes received by such Resident Holder pursuant to the Arrangement.

The cost of the New 2026 Exchange Notes and the AYR SVS Shares received by the Resident Holder pursuant to the Arrangement will generally be equal to the fair market value of such New 2026 Exchange Notes and the AYR SVS Shares, respectively. For the purposes of determining the adjusted cost base to a Resident Holder of the AYR SVS Shares so received at any time, the cost of such AYR SVS Shares will be determined by averaging the cost of such AYR SVS Shares with the adjusted cost base of all other AYR SVS Shares of that class owned by the Resident Holder as capital property at that time.

Generally, a portion of any capital loss realized on the disposition of Senior Notes pursuant to the Arrangement may be denied in certain circumstances under the Tax Act. Resident Holders should consult a tax advisor with respect to any potential loss denial.

The income tax treatment of capital gains (and capital losses) is generally described below under “Taxation of Capital Gains and Capital Losses”.

Holding and Disposing of New 2026 Exchange Notes

Interest on the New 2026 Exchange Notes

A Resident Holder of New 2026 Exchange Notes that is a corporation, partnership, unit trust or trust of which a corporation or a partnership is a beneficiary will be required to include in computing its income for a taxation year any interest on a New 2026 Exchange Note that accrued or is deemed to accrue to it to the end of the taxation year or that became receivable or was received by it before the end of the taxation year, except to the extent that such interest was otherwise included in computing its income for a preceding taxation year.

Any other Resident Holder of New 2026 Exchange Notes, including an individual, will be required to include in computing the Resident Holder’s income for a taxation year any amount that was received or became receivable by such Resident Holder in the taxation year as interest on such notes, depending upon the method regularly followed by the Resident Holder in computing income, to the extent that such amount was not included in computing the Resident Holder’s income for a preceding taxation year.

If a New 2026 Exchange Note is acquired by a Resident Noteholder at a discount from its face value (“Discount”) and the discount is (or is deemed to be) interest to the Resident Holder, such Resident Noteholder will be required to include in income annually the portion of such interest (or deemed interest) that accrues to the Resident Noteholder in the manner prescribed by the Tax Act notwithstanding that the Discount will not be received or receivable until maturity. Resident Noteholders are urged to consult their own tax advisors as to the Canadian income tax treatment of the Discount.

Any premium paid by AYR Newco to a Resident Holder on the redemption or repurchase of a of New 2026 Exchange Note before its maturity (other than in the open market in the manner any such obligation would normally be purchased in the open market by any member of the public) will generally be deemed to be interest received by the Resident Holder at the time of the payment to the extent that it can reasonably be considered to relate to, and does not exceed the value at that time of, the interest that would have been paid or payable by AYR Newco on the New 2026 Exchange Note for a taxation year of AYR Newco ending after that time. Such interest will be required to be included in computing the Resident Holder’s income in the manner described above.

Disposition of New 2026 Exchange Notes

On a disposition or deemed disposition of a New 2026 Exchange Note by a Resident Holder, the Resident Holder will generally be required to include in computing its income for the taxation year in which the disposition occurs an amount equal to the interest that has accrued on such note to the date of the disposition to the extent that such amount was not otherwise included in computing the Resident Holder’s income for that taxation year or a preceding taxation year.

In addition, on a disposition or deemed disposition of a New 2026 Exchange Note, a Resident Holder will realize a capital gain (or a capital loss) to the extent that the proceeds of disposition of the New 2026 Exchange Note, net of any amount included in the Resident Holder’s income as interest as well as any reasonable costs of disposition, exceed (or are less than) the adjusted cost base of such note to the Resident Holder immediately before the disposition or deemed disposition.

Holding and Disposing of AYR SVS Shares

Dividends on AYR SVS Shares

Dividends received or deemed to be received on AYR SVS Shares by a Resident Holder that is an individual (other than certain trusts) will be included in computing the individual’s income and will be subject to the gross up and dividend tax credit rules normally applicable to taxable dividends received by an individual from a taxable Canadian corporation. Taxable dividends received or deemed to be received by such individual which are designated by the Corporation as “eligible dividends” in accordance with the Tax Act will be subject to enhanced gross-up and dividend tax credit rules under the Tax Act.

Taxable dividends received by an individual (including certain trusts) may give rise to a liability for alternative minimum tax as calculated under the detailed rules set out in the Tax Act.

Dividends received or deemed to be received on AYR SVS Shares by a Resident Holder that is a corporation will be included in computing the corporation’s income and generally will be deductible in computing the taxable income of the corporation. A corporation that is a “private corporation” or a “subject corporation” for purposes of the Tax Act may be liable to pay a refundable tax on dividends received or deemed to be received by it, to the extent such dividends are deductible in computing the corporation’s taxable income. In certain circumstances, subsection 55(2) of the Tax Act may treat a taxable dividend received (or deemed to be received) by a Resident Holder that is a corporation as a gain from the disposition of capital property or proceeds of disposition.

A Resident Holder may be subject to United States withholding tax on dividends received on the AYR SVS Shares. Any United States withholding tax paid by or on behalf of a Resident Holder in respect of dividends received on the AYR SVS Shares by a Resident Holder may be eligible for foreign tax credit or deduction treatment where applicable under the Tax Act. Generally, a foreign tax credit in respect of a tax paid to a particular foreign country is limited to the Canadian tax otherwise payable in respect of income sourced in that country. Dividends received on the AYR SVS Shares by a Resident Holder may not be treated as income sourced in the United States for these purposes, such that a foreign tax credit under the Tax Act may not be available. Resident Holders should consult their own tax advisors with respect to the availability of any foreign tax credits or deductions under the Tax Act in respect of any United States withholding tax applicable to dividends on the AYR SVS Shares.

Disposition of AYR SVS Shares

On a disposition or a deemed disposition of an AYR SVS Share (other than in a disposition to the Corporation that is not a sale in the open market in the manner in which shares would normally be purchased by any member of the public in an open market), a Resident Holder generally will realize a capital gain (or a capital loss) equal to the amount by which the proceeds of disposition of the AYR SVS Share exceed (or are exceeded by) the Resident Holder’s adjusted cost base thereof and any reasonable costs of disposition. The tax treatment of any such capital gain (or capital loss) is described below under the heading “Taxation of Capital Gains and Capital Losses”.

The amount of any capital loss realized on the disposition or deemed disposition of an AYR SVS Share by a Resident Holder that is a corporation may be reduced by the amount of dividends received or deemed to have been received by it on the AYR SVS Share (or on a share for which such AYR SVS Share has been substituted), to the extent and in the circumstances prescribed by the Tax Act. Similar rules may apply where a corporation is a member of a partnership or a beneficiary of a trust that owns AYR AYR SVS Shares directly, or indirectly through a partnership or a trust. Resident Holders to which these rules may be relevant should consult their own tax advisors.

Taxation of Anti-Dilutive Warrants

Acquisition of Anti-Dilutive Warrants

A Resident Holder that receives an Anti-Dilutive Warrant pursuant to the Arrangement will not be required to include the value of such warrant in computing the Resident Holder’s income for purposes of the Tax Act. Anti-Dilutive Warrants received by a Resident Holder pursuant to the Arrangement will have an adjusted cost base of nil.

Exercise of Anti-Dilutive Warrants

The exercise of an Anti-Dilutive Warrant will not constitute a disposition of such warrant for purposes of the Tax Act and, accordingly, a Resident Holder will not realize a gain or loss on such exercise.

The aggregate cost to a Resident Holder of the AYR SVS Shares acquired on the exercise of an Anti-Dilutive Warrant will be equal to the amount of the exercise price for the AYR SVS Shares so acquired. The adjusted cost base to a Resident Holder at any time of AYR SVS Shares received on the exercise of Anti-Dilutive Warrants will be determined by averaging the cost of such AYR SVS Shares with the adjusted cost base of all other AYR SVS Shares of that class owned by the Resident Holder as capital property at that time.

Expiry of Anti-Dilutive Warrants

The expiry or termination of an unexercised Anti-Dilutive Warrant held by a Resident Holder will result in a capital loss to the Resident Holder equal to the adjusted cost base, if any, of the Anti-Dilutive Warrant immediately before its expiry or termination. Any such capital loss will be subject to the treatment described below under the heading “Taxation of Capital Gains and Capital Losses”.

Other Dispositions of Anti-Dilutive Warrants

A Resident Holder that disposes of or is deemed to dispose of an Anti-Dilutive Warrant (other than as a result of the exercise thereof) generally will realize a capital gain (or a capital loss) equal to the amount by which the proceeds of disposition of the Anti-Dilutive Warrant exceed (or are exceeded by) the aggregate of the Resident Holder’s adjusted cost base thereof and any reasonable costs of disposition. The tax treatment of any capital gain (or capital loss) realized on the disposition of an Anti-Dilutive Warrant (otherwise than by the exercise of such warrant) is described below under the heading “Taxation of Capital Gains and Capital Losses”.

Taxation of Capital Gains and Capital Losses

A Resident Holder will generally be required to include in computing its income for a taxation year one half of the amount of any capital gain (a “taxable capital gain”) realized by the Resident Holder in that taxation year. Subject to and in accordance with the provisions of the Tax Act, a Resident Holder will generally be required to deduct one-half of the amount of any capital loss realized by the Resident Holder in a taxation year from taxable capital gains realized by the Resident Holder in that taxation year (an “allowable capital loss”). Allowable capital losses in excess of taxable capital gains realized by a Resident Holder in a particular taxation year may be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against net taxable capital gains realized by the Resident Holder in any such taxation year, subject to and in accordance with the detailed rules contained in the Tax Act.

Capital gains realized by a Resident Holder that is an individual (other than certain trusts) may increase the Resident Holder’s liability for alternative minimum tax.

If a Resident Holder is subject to United States federal income tax on a gain realized in respect of a disposition of a Security, such gain may not be treated as income from a source in the United States for purposes of a foreign tax credit under the Tax Act, and such foreign tax credit under the Tax Act may not be available. Generally, a foreign tax credit in respect of a tax paid to a particular foreign country is limited to the Canadian tax otherwise payable in respect of income sourced in that country. Resident Holders should consult their own tax advisors with respect to the availability of a foreign tax credit or deduction, having regard to their own particular circumstances.

Additional Refundable Tax

A Resident Holder that is a “Canadian-controlled private corporation” (as defined in the Tax Act) or a “substantive CCPC” (as defined in the Tax Proposals) throughout a taxation year may be liable to pay an additional refundable tax on its “aggregate investment income” (as defined in the Tax Act) for the taxation year, including interest income and taxable capital gains.

Non-Residents of Canada

This portion of the summary is applicable to a Securityholder that at all relevant times, for purposes of the Tax Act and any applicable tax treaty or convention: (i) is neither resident nor deemed to be resident in Canada; and (ii) does not and is not deemed to use or hold the Securities in carrying on business in Canada (a “Non-Resident Holder”). Special rules, which are not discussed in this summary, may apply to a holder not resident in Canada that is an insurer that carries on business in Canada and elsewhere. In addition, this summary does not apply to a Non-Resident Holder of Senior Notes or New 2026 Exchange Notes in respect of a disposition of such notes to a holder resident or deemed to be resident in Canada for the purposes of the Tax Act with whom the Non-Resident Holder does not deal with at arm’s length for the purposes of the Tax Act, and such Non-Resident Holders should consult their own tax advisors.

The following portion of this summary is also not applicable to a Non-Resident Holder of Senior Notes or New 2026 Exchange Notes (and, where such Non-Resident Holder is a partnership, the partnership and each person who has a direct or indirect interest in the partnership) that is at any time a “specified shareholder” (as defined in subsection 18(5) of the Tax Act) of AYR or AYR Newco (each a “Note Issuer”) or that at any time does not deal at arm’s length for purposes of the Tax Act with a “specified shareholder” of the applicable Note Issuer. Generally, for this purpose, a “specified shareholder” is a person that owns, has a right to acquire or is otherwise deemed to own, either alone or together with persons with whom such person does not deal at arm’s length for purposes of the Tax Act, shares of the applicable Note Issuer’s capital stock that either (i) give the holders of such shares 25% or more of the votes that could be cast at an annual meeting of the shareholders or (ii) have a fair market value of 25% or more of the fair market value of all of the issued and outstanding shares of the applicable Note Issuer’s capital stock. Non-Resident Holders in such situations should consult and rely upon their own tax advisors.

Disposition of Senior Notes to AYR Newco pursuant to the Arrangement

A Non-Resident Holder of Senior Notes will not be subject to tax under the Tax Act in respect of any capital gain realized by such Non-Resident Holder on a disposition of a Senior Note pursuant to the Arrangement. Accordingly, the issuance of New AYR Exchange Shares and New 2026 Exchange Notes to Non-Resident Holders as consideration for Senior Notes pursuant to the Arrangement will not be subject to Canadian withholding tax.

The payment of interest accrued on the Senior Notes to the Effective Time will not be subject to Canadian withholding tax.

Holding and Disposing of New 2026 Exchange Notes

A Non-Resident Holder of New 2026 Exchange Notes will not be subject to Canadian withholding tax under the Tax Act in respect of amounts paid or credited by AYR Newco as, on account or in lieu of payment of, or in satisfaction of, interest, principal or premium on the New 2026 Exchange Notes.

Generally, there are no other Canadian federal income taxes that would be payable by a Non-Resident Holder as a result of holding or disposing of a New 2026 Exchange Note, including any capital gain realized by a Non-Resident Holder on a disposition of a New 2026 Exchange Note.

Holding and Disposing of AYR SVS Shares

Dividends on AYR SVS Shares

Dividends on AYR SVS Shares paid or credited, or deemed to be paid or credited, to a Non-Resident Holder will generally be subject to non-resident withholding tax under the Tax Act at a rate of 25%, subject to potential reduction under the provisions of an applicable income tax treaty or convention between Canada and the country where the Non-Resident Holder is resident. For example, under the Canada-United States Income Tax Convention (1980) (the “Treaty”), the withholding tax rate in respect of a dividend paid to a person who is the beneficial owner of the dividend and is resident in the United States for purposes of, and entitled to the full benefits under, the Treaty, is generally reduced to 15%. Non-Resident Holders are urged to consult their own tax advisors to determine their entitlement to relief under an applicable income tax treaty or convention.

Disposition of AYR SVS Shares

A Non-Resident Holder will not be subject to tax under the Tax Act in respect of any gain realized on a disposition of AYR SVS Shares unless the AYR SVS Shares disposed of constitute "taxable Canadian property" (as defined in the Tax Act) of the Non-Resident Holder and the Non-Resident Holder is not entitled to relief under an applicable income tax treaty or convention.

Generally, an AYR SVS Share will not be "taxable Canadian property" of a Non-Resident Holder at a particular time provided the AYR SVS Share is listed on a "designated stock exchange" (as defined in the Tax Act), which currently includes the CSE, unless, at any time during the 60-month period preceding the particular time, (a) the AYR SVS Share derived more than 50% of its fair market value directly or indirectly from one or any combination of real or immovable properties situated in Canada, "Canadian resource properties" or "timber resource properties" (each as defined in the Tax Act), or options in respect of, interests in, or civil law rights in, any of the foregoing, and (b) at such time 25% or more of the issued shares of any class or series of the Corporation’s shares were owned by one or any combination of (i) the Non-Resident Holder, (ii) persons with whom the Non-Resident Holder did not deal at “arm's length” (within the meaning of the Tax Act), and (iii) partnerships in which the Non-Resident Holder or a person described in (ii) held a membership interest directly or indirectly through one or more partnerships. A Non-Resident Holder's AYR SVS Shares can also be deemed to be taxable Canadian property in certain circumstances set out in the Tax Act.

Taxation of Anti-Dilutive Warrants

Acquisition of Anti-Dilutive Warrants

The issuance of Anti-Dilutive Warrants to a Non-Resident Holder pursuant to the Arrangement will not be subject to Canadian withholding tax.

Exercise of Anti-Dilutive Warrants

The exercise of an Anti-Dilutive Warrant by a Non-Resident Holder will not constitute a disposition of that warrant for purposes of the Tax Act and, consequently, a Non-Resident Holder will not realize a gain or loss on such exercise. The adjusted cost base to a Non-Resident Holder of the AYR SVS Shares acquired on the exercise of an Anti-Dilutive Warrant will be the same as described above with respect to a Resident Holder under the heading "Residents of Canada – Taxation of Anti-Dilutive Warrants – Exercise of Anti-Dilutive Warrants".

Expiry of Anti-Dilutive Warrants

A Non-Resident Holder will not be subject to tax under the Tax Act in respect of the expiry or termination of an unexercised Anti-Dilutive Warrant.

Other Dispositions of Anti-Dilutive Warrants

A Non-Resident Holder will not be subject to tax under the Tax Act in respect of any gain realized on a disposition of Anti-Dilutive Warrants unless the Anti-Dilutive Warrants disposed of constitute "taxable Canadian property" (as defined in the Tax Act) of the Non-Resident Holder and the Non-Resident Holder is not entitled to relief under an applicable income tax treaty or convention.

The Anti-Dilutive Warrants will generally only be "taxable Canadian property" of a Non-Resident Holder if the AYR SVS Shares to be issued upon the exercise of the Anti-Dilutive Warrants would be "taxable Canadian property" of the Non-Resident Holder, as described above under the heading "Disposition of AYR SVS Shares".

SUPPORT AGREEMENT

On October 31, 2023, the Corporation entered into the Support Agreement with the Supporting Senior Noteholders, which held collectively approximately 76% of the Senior Notes as of such date. Capitalized terms used in this section that are not otherwise defined have the meanings specified in the Support Agreement.

The following is a summary of the principal terms of the Support Agreement. This summary does not purport to be complete and is qualified in its entirety by reference to the Support Agreement, a copy of which is available under the Corporation’s profile on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov.

Covenants

Pursuant to the Support Agreement, and subject to the terms and conditions thereof, each Supporting Senior Noteholder agreed, among other things:

(2) tender its proxy for any such vote in compliance with the Interim Order prior to the applicable deadline set forth in the Interim Order;

Notwithstanding anything contained therein to the contrary, nothing in the Support Agreement shall in any way be construed to preclude a Supporting Senior Noteholder from acquiring or acquiring voting control over additional Senior Notes that are not otherwise subject to the Support Agreement; provided, however, that such Additional Notes shall automatically and immediately upon such acquisition by a Supporting Senior Noteholder be deemed to constitute Relevant Notes (and together with all accrued and unpaid interest and any other amount that such Supporting Senior Noteholder is entitled to claim in respect of the Additional Notes pursuant to the Trust Indenture or otherwise shall be deemed to constitute Debt) of the Supporting Senior Noteholder thereunder subject to the terms of the Support Agreement, and the Supporting Senior Noteholder agreed to provide prompt written (including email) notice of any such acquisition to the Corporation, Weil, and Stikeman, advising of (i) the acquisition by the Supporting Senior Noteholder of or of voting control over Additional Notes, and (ii) the principal amount of Additional Notes so acquired by the Supporting Senior Noteholder. Subject to Section 10 of the Support Agreement, following the Support Effective Date, upon written request (including by email) by the Corporation, Weil, or Stikeman, the Supporting Senior Noteholder agreed to promptly identify, in writing, to the Corporation, Weil, and Stikeman the nature and amount of any additional Claim or Interest held in relation to the Corporation by all entities represented by the Supporting Senior Noteholder in connection with the Corporation as of the date of such request.

Pursuant to the Support Agreement, and subject to the terms and conditions thereof, the Corporation and certain of its affiliates, as applicable, agreed, among other things:

Representations and Warranties

The parties to the Support Agreement made a number of customary representations and warranties regarding themselves, the Support Agreement and the Transaction.

Conditions to the Transaction

The Transaction shall be subject to the satisfaction of the following conditions prior to or at the time the Transaction is implemented, each of which is for the mutual benefit of the Companies, on the one hand, and the Supporting Senior Noteholders, on the other hand, and may be waived in whole or in part jointly by the Corporation and the Requisite Supporting Senior Noteholders (provided that such conditions shall not be enforceable by the Corporation or a Supporting Senior Noteholder, as the case may be, if any failure to satisfy such conditions results from an action, error or omission by or within the control of the Party seeking enforcement):

The obligations of the Companies to complete the Transaction and the other transactions contemplated by the Support Agreement are subject to the satisfaction of the following additional conditions prior to or at the Effective Date, each of which is for the benefit of the Companies and may be waived, in whole or in part, by the Corporation (provided that such conditions shall not be enforceable by the Companies if any failure to satisfy such conditions results from an action, error or omission by or within the control of the Companies):

The obligations of the Supporting Senior Noteholders to complete the Transaction and the other transactions contemplated by the Support Agreement are subject to the satisfaction of the following additional conditions prior to or at the Effective Date, each of which is for the benefit of the Supporting Senior Noteholders and may be waived, in whole or in part, by the Requisite Supporting Senior Noteholders (provided that such conditions shall not be enforceable by the Supporting Senior Noteholders if any failure to satisfy such conditions results from an action, error or omission by or within the control of the Supporting Senior Noteholder seeking enforcement):

Termination

The Support Agreement may be terminated by the Requisite Supporting Senior Noteholders, by providing written notice to AYR, delivered in accordance with Section 12 of the Support Agreement upon the occurrence of any of the following:

The Support Agreement may be terminated by the Corporation, on behalf of itself and the other Company Entities, by providing written notice to the Supporting Senior Noteholders, delivered in accordance with Section 12 of the Support Agreement, following the occurrence of any of the following events:

The obligations of the Companies under the Support Agreement may be terminated by the Companies as to a breaching Supporting Senior Noteholder only, by providing written notice to such Supporting Senior Noteholder, in exercise of its sole discretion, upon the occurrence and continuation of any of the following events (and the Breaching Noteholder shall thereupon no longer be a Supporting Senior Noteholder):

The Support Agreement may be terminated at any time by mutual written consent of the Companies and the Requisite Supporting Senior Noteholders. The Support Agreement shall terminate automatically on the Effective Date upon implementation of the Plan. Subject to Section 9(8) of the Support Agreement, the Support Agreement, upon its termination, shall be of no further force and effect and each Party hereto shall be automatically and simultaneously released from its commitments, undertakings, and agreements under or related to the Support Agreement. Each Party shall be responsible and shall remain liable for any breach of the Support Agreement by such Party occurring prior to the termination of the Support Agreement. Notwithstanding the termination of the Support Agreement pursuant to Section 9 thereof, the agreements and obligations of the Parties in Section 10 and Section 12 of the Support Agreement shall survive such termination and shall continue in full force and effect for the benefit of the Parties in accordance with the terms of the Support Agreement.

If the Transaction is not consummated pursuant to the Plan concurrently with the date of termination of the Support Agreement, nothing in the Support Agreement shall be construed as a waiver by any Party of any or all such Party’s rights and the Parties expressly reserve any and all of their respective rights. Pursuant to U.S. Federal Rule of Evidence 408 and any other applicable rules of evidence, the Support Agreement and all negotiations relating thereto shall not be admissible into evidence in any proceeding other than a proceeding to enforce its terms.

Fiduciary Duties

Nothing in the Support Agreement will require any directors or officers of any of the Companies, each in his or her capacity as a director or officer of any of the Companies, to take any action or to refrain from taking any action, in the event the Independent Committee of the Corporation reasonably determines, in good faith after consultation with and upon the advice of outside counsel, would be inconsistent with its fiduciary duties under applicable law in the event of an Alternative Transaction that: (i) when consummated will result in a higher or better outcome for both the Companies and holders of the Senior Notes; or (ii) repays in full in cash all obligations under the Senior Notes. Notwithstanding anything to the contrary in the Support Agreement, the Companies and their respective directors, officers, employees, investment bankers, attorneys, accountants, consultants, and other advisors or representatives shall have the right, in consultation with the Advisors, to consider and respond to unsolicited proposals or inquiries that the Independent Committee determines constitute or may be capable of constituting a Superior Proposal and, in connection therewith, (x) provide access to non-public information concerning any of the Companies in furtherance, pursuit, or respect of Superior Proposals; (y) engage in discussions or negotiations in furtherance, pursuit, or respect of Superior Proposals; and (z) otherwise cooperate with, assist, participate in, or facilitate any inquiries, proposals, discussions or negotiations in furtherance, pursuit, or respect of such Superior Proposals.

Effectiveness

The Support Agreement will become effective and binding (i) as to the Companies and Supporting Senior Noteholders, on the Support Effective Date; (ii) as to any Supporting Senior Noteholder that enters into a Joinder Agreement on or following the Support Effective Date, upon delivery to the Corporation and the Supporting Senior Noteholders of such validly completed Joinder Agreement; and (iii) as to any Permitted Transferee, upon delivery of a validly completed Joinder Agreement; provided that signature pages executed by Supporting Senior Noteholders will be delivered to (a) the Corporation, each of the other Supporting Senior Noteholders, and the Advisors in unredacted form that includes such Supporting Senior Noteholder’s holdings of the Senior Notes and (b) Weil, Stikeman, and Moelis in an unredacted form (to be held by Weil, Stikeman and Moelis on a “professional eyes only” basis).

SECURITIES LAW MATTERS

United States

The following discussion is a general overview of certain requirements of U.S. federal securities laws that may be applicable to Senior Noteholders in the United States in respect of New 2026 Notes and New AYR Shares received pursuant to the Transaction and to existing AYR Shareholders and existing holders of exchangeable shares that receive Anti-Dilutive Warrants. All securityholders are urged to consult with their own legal counsel to ensure that any subsequent resale of securities issued to them in connection with the Arrangement and corresponding Transaction complies with applicable securities legislation.

The following discussion does not address the Canadian securities laws that will apply to the issuance to or the resale by securityholders within Canada of securities of AYR. Securityholders reselling their securities in Canada must comply with Canadian securities laws, as outlined below under “Securities Law Matters – Canada”.

Exemption of the New 2026 Exchange Notes and New AYR Exchange Shares from the Registration Requirements of the U.S. Securities Act pursuant to Section 3(a)(10) of the U.S. Securities Act

The issuance and distribution of the New 2026 Exchange Notes and the New AYR Exchange Shares under the Plan have not been registered under the U.S. Securities Act. The New 2026 Exchange Notes and the New AYR Exchange Shares are being issued in reliance on the exemption from registration under the U.S. Securities Act pursuant to Section (3)(a)(10) of the U.S. Securities Act on the basis of the approval of the Court, which will consider, among other things, the fairness of the Arrangement to the persons affected and exemptions provided under the securities laws of each state of the United States in which applicable Senior Noteholders reside. The exemption provided pursuant to Section 3(a)(10) of the U.S. Securities Act exempts from registration the distribution of a security that is issued in exchange for outstanding securities, claims or property interests where the terms and conditions of such issuance and exchange are approved, after a hearing upon the fairness of such terms and conditions at which all persons to whom it is proposed to issue securities in such exchange have the right to appear, by a court or by a governmental authority expressly authorized by law to grant such approval. Accordingly, the Final Order will, if granted, constitute a basis for the exemption from the registration requirements of the U.S. Securities Act with respect to the New 2026 Exchange Notes and the New AYR Exchange Shares issued in connection with the Transaction. Holders of New 2026 Exchange Notes and New AYR Exchange Shares validly issued pursuant to Section 3(a)(10) of the U.S. Securities Act will generally not be subject to resale restrictions under the U.S. Securities Act. See “Securities Law Matters – United States – Restrictions on the Resale of Securities Constituting “Control Securities”” for further information with respect to securityholders that may hold “control securities” under the U.S. Securities Act.

Exemption of the Anti-Dilutive Warrants from the Registration Requirements of the U.S. Securities Act

The Anti-Dilutive Warrants will be issued to existing AYR Shareholders (excluding the recipients of the New AYR Exchange Shares and the Backstop Shares) and existing holders of exchangeable shares in order to reduce the dilutive effect of the New AYR Exchange Shares and the Backstop Funding Premium. AYR will not receive any consideration for the issuance of the Anti-Dilutive Warrants. Therefore, the issuance of the Anti-Dilutive Warrants is not expected to constitute a “sale,” as such term is defined in Section 2(a)(3) of the U.S. Securities Act and will not require registration under the U.S. Securities Act. The Anti-Dilutive Warrants will generally not be subject to resale restrictions under the U.S. Securities Act. Notwithstanding the foregoing, the Anti-Dilutive Warrants may only be exercised outside the United States pursuant to Regulation S under the U.S. Securities Act or inside the United States by Accredited Investors in compliance with the U.S. securities laws or in compliance with another exemption from the registration requirements of the U.S. Securities Act, and in each case, in compliance with any applicable local securities laws. Furthermore, the AYR SVS Shares underlying such Anti-Dilutive Warrants will be considered “restricted securities” under U.S. federal securities laws and subject to restrictions on transfer unless transferred under an available exemption from the registration requirements of the U.S. Securities Act or pursuant to an effective registration statement. In particular, during the 40-day period following distribution of the Anti-Dilutive Warrants, no offer or sale of the AYR SVS Shares underlying the Anti-Dilutive Warrants may be made to a U.S. Person or for the account or benefit of a U.S. Person. See “Securities Law Matters – United States - Restrictions on the Resale of Securities Constituting “Control Securities”” for further information with respect to securityholders that may hold “control securities” under the U.S. Securities Act. The Corporation will not be required to, and does not intend to, register the AYR SVS Shares under the U.S. Securities Act.

Exemption of the New 2026 Additional Notes and Backstop Shares from the Registration Requirements of the U.S. Securities Act pursuant to Section 4(a)(2) of the U.S. Securities Act

The New 2026 Additional Notes and the Backstop Shares shall be exempt from registration under the U.S. Securities Act and any other applicable United States securities law pursuant to Section 4(a)(2) of the U.S. Securities Act and/or Regulation D thereunder.

Persons who receive the New 2026 Additional Notes and the Backstop Shares pursuant to the exemption from registration set forth in Section 4(a)(2) of the U.S. Securities Act or Regulation D promulgated thereunder will hold “restricted securities” under U.S. federal securities laws. Such New 2026 Additional Notes and Backstop Shares may not be transferred except pursuant to an effective registration statement or under an available exemption from the registration requirements of the U.S. Securities Act. Holders of such restricted securities would, however, under certain conditions, be permitted to resell such New 2026 Additional Notes and/or Backstop Shares without registration if such holders are able to comply with the applicable provisions of Rule 144, Rule 144A or Regulation S under the U.S. Securities Act or any other registration exemption under the U.S. Securities Act. See “Securities Law Matters – United States – Restrictions on the Resale of Securities Constituting “Control Securities”” for further information with respect to securityholders that may hold “control securities” under the U.S. Securities Act.

Restrictions on the Resale of Securities Constituting “Control Securities”

Persons who receive New 2026 Notes, New AYR Shares or Anti-Dilutive Warrants (including the AYR SVS Shares underlying the Anti-Dilutive Warrants), as applicable, and who are “affiliates” of the Corporation or who have been affiliates of the Corporation within 90 days before the proposed resale of such securities will hold “control securities” under U.S. federal securities laws and will have additional limitations on resales of such securities, including volume limitations, public information requirements and manner and notice of sale requirements. Persons who may be deemed to be “affiliates” of an issuer generally include individuals or entities that control, are controlled by, or are under common control with, the issuer, whether through the ownership of voting securities, by contract or otherwise, and generally include executive officers and directors of the issuer as well as principal shareholders of the issuer. Any resale of such New 2026 Notes, New AYR Shares or Anti-Dilutive Warrants (including the AYR SVS Shares underlying the Anti-Dilutive Warrants), as applicable, by such an affiliate (or, if applicable, former affiliate) may be subject to the registration requirements of the U.S. Securities Act and applicable state securities laws, absent an exemption therefrom. Subject to certain limitations, such affiliates (and former affiliates) may be entitled to immediately resell such securities outside the United States without registration under the U.S. Securities Act pursuant to Regulation S under the U.S. Securities Act, or in certain cases, in accordance with Rule 144 under the U.S. Securities Act, if available. All securityholders are urged to consult with their own legal counsel to ensure that any subsequent resale of securities issued to them in connection with the Arrangement and corresponding Transaction complies with applicable securities legislation. The Corporation will not be required to, and does not intend to, register the AYR SVS Shares under the U.S. Securities Act.

Canada

The issuance of the: (i) AYR SVS Shares pursuant to the Transaction (including the New AYR Shares and the Backstop Shares), the Backstop Funding Premium, the exchange of the Backstop Shares (if applicable) and the exercise of the Anti-Dilutive Warrants; (ii) the New 2026 Notes; and (iii) the Anti-Dilutive Warrants, each will be exempt from the prospectus and registration requirements under Canadian securities laws. As a consequence of these exemptions, certain protections, rights and remedies provided by Canadian securities laws, including statutory rights of rescission or damages, will not be available in respect of such new securities to be issued pursuant to the Transaction.

Such AYR SVS Shares, New 2026 Notes and Anti-Dilutive Warrants will generally be “freely tradeable” under Canadian securities laws if the following conditions (as specified in National Instrument 45-102 – Resale of Securities) (“NI 45-102”) are satisfied: (i) the trade is not a “control distribution” (as defined in NI 45-102); (ii) no unusual effort is made to prepare the market or to create a demand for the shares that are the subject of the trade; (iii) no extraordinary commission or consideration is paid to a person or company in respect of the trade; and (iv) if the selling shareholder is an insider (as defined under Canadian securities laws) or officer of the issuer, the selling shareholder has no reasonable grounds to believe that the issuer is in default of securities legislation.

Notwithstanding the foregoing, the Anti-Dilutive Warrants may only be exercised outside the United States pursuant to Regulation S under the U.S. Securities Act or inside the United States by Accredited Investors in compliance with the U.S. securities laws or in compliance with another exemption from the registration requirements of the U.S. Securities Act, and in each case, in compliance with any applicable local securities laws.

ARRANGEMENT STEPS

The following is a summary of the principal steps in respect of the Plan. This summary does not purport to be complete and is qualified in its entirety by reference to the Plan, a copy of which is appended hereto as Appendix “B” and which is also available under the Corporation’s profile on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov.

Pursuant to the Plan, commencing at the Effective Time, the following events or transactions will occur, or be deemed to have occurred and be taken and effected, sequentially as set out below without any further authorization, act or formality, in each case, unless stated otherwise, effective as at five minute intervals commencing at the Effective Time. Capitalized terms used in this section that are not otherwise defined shall have the meanings specified in the Plan.

ANTI-DILUTIVE WARRANTS

Following the closing of the Arrangement, there will be an aggregate of 23,046,067 Anti-Dilutive Warrants outstanding, which will be held pro rata by the AYR Shareholders and AYR Exchangeable Shareholders, as of the close of business on the Warrant Record Date.

All Anti-Dilutive Warrants will become exercisable commencing on the closing of the Arrangement. Each Anti-Dilutive Warrant is exercisable to purchase one AYR SVS Share at a price of U.S.$2.12 per share, subject to the following adjustments. The warrant agency agreement with Odyssey Trust Company, as warrant agent (the “Warrant Agent”), in respect of the Anti-Dilutive Warrants (the “Warrant Agency Agreement”) will provide that the exercise price and number of AYR SVS Shares issuable on exercise of the Anti-Dilutive Warrants may be adjusted in certain customary circumstances, including in the event of a stock dividend, Extraordinary Dividend (as such term shall be defined in the Warrant Agency Agreement) or a recapitalization, reorganization, merger or consolidation. The Anti-Dilutive Warrants will not, however, be adjusted for issuances of AYR SVS Shares at a price below their exercise price.

The exercise of the Anti-Dilutive Warrants by any holder in the United States, or that is a U.S. Person, may only be effected in compliance with an exemption from the registration requirements of the U.S. Securities Act. See “Securities Law Matters – United States” for further information.

The holders of Anti-Dilutive Warrants will not have the rights or privileges of holders of shares or any voting rights until they exercise their Anti-Dilutive Warrants and receive the underlying AYR SVS Shares. After the issuance of corresponding AYR SVS Shares upon exercise of the Anti-Dilutive Warrants, each holder will be entitled to vote the AYR SVS Shares in accordance with their terms.

The Warrant Agent shall, on receipt of a written request of the Corporation or holders of not less than 25% of the aggregate number of Anti-Dilutive Warrants then outstanding, convene a meeting of holders of Anti-Dilutive Warrants upon at least 21 calendar days’ written notice to holders of Anti-Dilutive Warrants. Every such meeting shall be held in Toronto, Ontario or at such other place as may be approved or determined by the Warrant Agent. A quorum at meetings of holders of Anti-Dilutive Warrants shall be two persons present in person or represented by proxy holding or representing more than 20% of the aggregate number of Anti-Dilutive Warrants then outstanding.

From time to time, the Corporation and the Warrant Agent, without the consent of the holders of Anti-Dilutive Warrants, may amend or supplement the Warrant Agency Agreement for certain purposes including curing defects or inconsistencies or making any change that does not adversely affect the rights of any holder of Anti-Dilutive Warrants. Any amendment or supplement to the Warrant Agency Agreement that adversely affects the interests of the holders of Anti-Dilutive Warrants may only be made by an “extraordinary resolution”, which is defined in the Warrant Agency Agreement as a resolution either: (i) passed at a meeting of the holders of Anti-Dilutive Warrants by the affirmative vote of holders of Anti-Dilutive Warrants representing not less than two-thirds of the aggregate number of the then outstanding Anti-Dilutive Warrants represented at the meeting and voted on such resolution; or (ii) adopted by an instrument in writing signed by the holders of Anti-Dilutive Warrants representing not less than two-thirds of the aggregate number of the then outstanding Anti-Dilutive Warrants.

The Anti-Dilutive Warrants will expire at 5:00 p.m. (Eastern time) on the day that is two years after the closing of the Arrangement.

CURRENCY PRESENTATION AND EXCHANGE RATE INFORMATION

Unless the context otherwise requires, all references to “$” and “U.S.$” mean references to the lawful money of the United States. All references to “C$” refer to Canadian dollars. The following table sets forth, for each year indicated, the low and high exchange rates for U.S. dollars expressed in Canadian dollar terms, the exchange rate at the end of such year and the average of such exchange rates on the last day of each month during such year, based on the closing rate as reported by Bloomberg. The exchange rates set forth below demonstrate trends in exchange rates only.

The following table sets forth, for each of the last 10 months of 2023, the low and high exchange rates for U.S. dollars expressed in Canadian dollar terms and the exchange rate on the last day of each month based on the closing rate as reported by Bloomberg.

On November 14, 2023, the closing rate as reported by Bloomberg was U.S.$1.00 = CAD$1.3693; unless the context states or requires otherwise, for purposes of U.S. dollars and Canadian dollar conversions contained in this Circular (if any), the Corporation has assumed such an exchange rate.

NON-GAAP FINANCIAL PERFORMANCE MEASURES

Certain financial performance measures referenced in this Circular and/or the documents incorporated by reference herein are not prescribed by United States generally accepted accounting principles (“GAAP”). These non-GAAP measures are provided as additional information to complement GAAP measures by providing further understanding of the results of the operations of the Corporation from management’s perspective. Accordingly, these non-GAAP measures should not be considered in isolation, nor as a substitute for analysis of the Corporation’s financial information reported under GAAP. Non-GAAP measures used to analyze the performance of the Corporation include adjusted earnings before interest, tax, depreciation, and amortization (“Adjusted EBITDA”) and “Adjusted Gross Profit”. The Corporation believes that these non-GAAP financial measures may be useful to investors because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. These financial measures are intended to highlight trends in the Corporation’s core businesses that may not otherwise be apparent when solely relying on the GAAP measures. Please refer to the 2023 Interim MD&A for a reconciliation of Adjusted EBITDA to the most closely comparable GAAP measure.

PRIOR SALES

AYR SVS Shares

For the 12-month period before the date of this Circular, AYR issued the following AYR SVS Shares and securities exercisable or convertible into AYR SVS Shares.

Anti-Dilutive Warrants and New 2026 Notes

AYR did not issue any Anti-Dilutive Warrants or New 2026 Notes during the 12-month period before the date of this Circular.

TRADING PRICE AND VOLUME

The AYR SVS Shares are currently listed on the CSE and commenced trading under the symbol “AYR.A” on August 19, 2019 and quoted on the OTCQX under the symbol “AYRWF”. On November 14, 2023, being the last trading day completed prior to the date of this Circular, the closing price of the AYR SVS Shares on the CSE was C$2.69 and the closing bid price of the AYR SVS Shares on the OTCQX was $1.95. The following table ‎sets forth, for the periods indicated, the reported high and low prices and the aggregate volume of ‎trading of the AYR SVS Shares on the CSE, as quoted on the CSE.

DESCRIPTION OF SECURITIES

New 2026 Notes

The full text of the Amended and Restated Indenture, which will govern the New 2026 Notes, is attached hereto as Appendix “G”. A blackline of the Amended and Restated Indenture to the Existing Indenture is also attached hereto as Appendix “H”. Capitalized terms not otherwise defined in this section have the meanings given to them in the Amended and Restated Indenture. Holders are encouraged to read the entirety of the Amended and Restated Indenture and review the changes as compared to the Existing Indenture.

The New 2026 Notes will have a 13.0% cash interest rate and a maturity date of December 10, 2026. Interest will be payable semi-annually, in equal instalments, on December 31 and June 30 of each year the New 2026 Notes remain outstanding.

The obligations of AYR Newco under the Amended and Restated Indenture and the New 2026 Notes will be irrevocably and unconditionally guaranteed, jointly and severally, by AYR. As at the completion of the Arrangement and the issuance of the New 2026 Notes, all of AYR’s direct and indirect subsidiaries (other than Ayr Foundation Inc.) will have entered into Guarantees of AYR Newco’s obligations under the Amended and Restated Indenture.

The New 2026 Notes will be:

Optional Redemption

At any time and from time to time after the Issue Date, AYR Newco may redeem all or a part of the New 2026 Notes, upon not less than 15 nor more than 60 days’ notice, at a redemption price of 100% (subject to the rights of Holders on the relevant record date to receive accrued but unpaid interest up to but excluding the redemption date.

Change of Control Offer

Upon the occurrence of a Change of Control of AYR or AYR Wellness Holdings, the Issuer will be required to make an offer to each Holder to purchase such Holder’s New 2026 Notes at a purchase price in cash equal to but not less than 105% of the aggregate principal amount of the New 2026 Notes repurchased, plus accrued and unpaid interest, if any, on the New 2026 Notes repurchased up to but excluding the date of purchase.

Covenants

The covenants included in the Amended and Restated Indenture have been modified as compared to the covenants under the Existing Indenture. The Amended and Restated Indenture contains covenants restricting the ability of AYR and the Guarantors to, among other things:

In addition, AYR will be required to maintain (i) a consolidated unrestricted cash balance of not less than $20 million, which shall be tested on the last day of each month, beginning on January 31, 2024 and (ii) a Consolidated Net Leverage Ratio at the end of any period of four (4) consecutive fiscal quarters ending on certain prescribed dates to be greater than certain prescribed ratios set out in the Amended and Restated Indenture starting at the quarter ended September 30, 2024. The changes to the covenants included in the Amended and Restated Indenture as compared to the Existing Indenture can be reviewed in Appendix “H”.

Collateral

The Collateral will consist of all of AYR, AYR Newco, and the Guarantors’ personal property, real property and other assets, including, without limitation, all licenses, permits and other rights to operate a cannabis business, other than customary Excluded Assets.

Collateral Trustee

Odyssey Trust Company will act as Collateral Trustee for the New 2026 Notes. The Collateral Trustee holds, and will be entitled to enforce, Liens on the Collateral created by the Security Documents. Except as provided in the Amended and Restated Indenture, the Collateral Trustee will not act upon directions purported to be delivered to them by any holder, commence any exercise of remedies or any foreclosure actions or otherwise take any actions or proceedings against any of the Collateral.

To the extent that the Liens in favour of the Collateral Trustee in any Collateral are not perfected, the Collateral Trustee’s rights may only be equal to the rights of the general unsecured and unsubordinated creditors of the Corporation if it became subject to an Insolvency Proceeding. Further, Liens of certain Lien holders, such as holders of certain statutory or possessory Liens, judgment creditors, or any creditors who obtain a perfected Lien in any items of Collateral in which the Collateral Trustee’s Liens are unperfected or in which such unperfected Liens or the perfected Liens under applicable law have priority over the Collateral Trustee’s Lien, may take priority over the Collateral Trustee’s interest in the Collateral. Accordingly, there can be no assurance that the Property in which the Collateral Trustee’s Liens are unperfected will be available to satisfy the obligations under the New 2026 Notes.

Certain Insolvency Limitations

In addition to the limitations described elsewhere in the Amended and Restated Indenture and herein, the rights of the Indenture Trustee, the Collateral Trustee and the holders of the New 2026 Notes to enforce remedies are likely to be significantly impaired if AYR Newco, AYR or any Guarantor becomes subject to Insolvency Proceedings in Canada or the United States. For example, both the Bankruptcy and Insolvency Act (Canada) and the Companies’ Creditors Arrangement Act (Canada) contain provisions enabling an insolvent debtor to obtain a stay of proceedings against its creditors and others. Also, pursuant to proceedings under such legislation, an insolvent debtor may prepare and file a proposal or plan of arrangement for consideration by all or some of its creditors to be voted on by the various classes of its creditors affected thereby. Such a restructuring proposal, if accepted by the requisite majorities of each affected class of creditors and if approved by the relevant court, would be binding on creditors within any such class who may not otherwise be willing to accept it. Moreover, this legislation permits the insolvent debtor to retain possession and administration of its property, subject to court oversight, even though it may be in default under the applicable debt instrument. Further, in such proceedings, the court may, subject to certain conditions, create court-ordered charges on the assets of the debtor to secure new financing, professional fees, post-filing amounts owing to critical suppliers, statutory director liabilities or other amounts, in priority to the Liens that secure the New 2026 Notes. The Bankruptcy Laws of the United States create similar and significant limitations and impairments of the rights of the Indenture Trustee, the Collateral Trustee and the Holders of the New 2026 Notes, especially given that the business is related to cannabis.

AYR SVS Shares

The following is a brief summary of certain general terms and provisions of the AYR SVS Shares that will be issued pursuant to the Transaction. This summary does not purport to be complete.

Exercise of Voting Rights

The holders of each class of AYR SVS Shares will be entitled to receive notice of, to attend (if applicable, virtually) and to vote at all meetings of AYR Shareholders, except that they will not be able to vote (but will be entitled to receive notice of, to attend (if applicable, virtually) and to speak) at those meetings at which the holders of a specific class are entitled to vote separately as a class under the Business Corporations Act (British Columbia) (“BCBCA”), and except that holders of limited voting shares of AYR (“Limited Voting Shares”) will not be entitled to vote for the election of directors. The AYR SVS Shares and restricted voting shares (“Restricted Voting Shares”) of AYR carry one vote per share on all matters. The Limited Voting Shares carry one vote per share on all matters except the election of directors, as the holders of Limited Voting Shares do not have any entitlement to vote in respect of the election for directors of the Corporation. The AYR SVS Shares are “restricted securities” within the meaning of such term under applicable Canadian securities laws.

In connection with any Change of Control Transaction (as defined below) requiring approval of all classes of shares under the BCBCA, holders of SVS and multiple voting shares of the Corporation (“Multiple Voting Shares” and collectively with AYR SVS Shares, “Shares”) shall be treated equally and identically, on a per share basis, unless different treatment of the Shares of each such class is approved by a majority of the votes cast by the holders of outstanding AYR SVS Shares, Restricted Voting Shares and/or Limited Voting Shares, as applicable, in respect of a resolution approving such Change of Control Transaction, voting separately as a class at a meeting of the holders of that class called and held for such purpose.

For purposes herein, a “Change of Control Transaction” means an amalgamation, arrangement, recapitalization, business combination or similar transaction of the Corporation, other than an amalgamation, arrangement, recapitalization, business combination or similar transaction that would result in: (i) the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the continuing entity or its direct or indirect parent) more than fifty percent (50%) of the total voting power of the voting securities of the Corporation, the continuing entity or its direct or indirect parent, and more than fifty percent (50%) of the total number of outstanding shares of the Corporation, the continuing entity or its direct or indirect parent, in each case as outstanding immediately after such transaction; and (ii) the AYR Shareholders immediately prior to the transaction owning voting securities of the Corporation, the continuing entity or its direct or indirect parent immediately following the transaction in substantially the same proportions (vis-a-vis each other) as such AYR Shareholders owned the voting securities of the Corporation immediately prior to the transaction (provided that in neither event shall the exercise of any exchangeable shares of a subsidiary of the Corporation that are exchangeable into shares of the Corporation be taken into account in such determination).

Notwithstanding the foregoing, the holders of AYR SVS Shares, Restricted Voting Shares and Limited Voting Shares, as applicable, are each entitled to vote as a separate class, in addition to any other vote of AYR Shareholders that may be required, in respect of any alteration, repeal or amendment of the articles of the Corporation (the “Articles”), which would: (i) adversely affect the rights or special rights of the holders of AYR SVS Shares, Restricted Voting Shares and/or Limited Voting Shares, as applicable (including an amendment to the terms of the Articles which provide that any Multiple Voting Shares sold or transferred to a person that is not a Permitted Holder (as defined in the Articles) shall be automatically converted into AYR SVS Shares and/or Restricted Voting Shares, as applicable); (ii) affect the holders of the Shares differently, on a per share basis; or (iii) except as otherwise set forth in the Articles, as amended, create any class or series of shares ranking equal to or senior to the AYR SVS Shares, Restricted Voting Shares and/or Limited Voting Shares, as applicable; and in each case such alteration, repeal or amendment shall not be effective unless a resolution in respect thereof is approved by a majority of the votes cast by holders of outstanding AYR SVS Shares, Restricted Voting Shares and/or Limited Voting Shares, as applicable.

Dividends

Holders of AYR SVS Shares are entitled to receive, as and when declared by the Board, dividends in cash or property of the Corporation. No dividend will be declared or paid on any class of Shares unless the Corporation simultaneously declares or pays, as applicable, equivalent dividends (on a per share basis) on all classes of Shares then issued and outstanding. Each class of Restricted Shares shall rank equally with the other classes of Shares as to dividends on a share-for-share basis, without preference or distinction. In the event of the payment of a dividend in the form of shares, holders of AYR SVS Shares, Restricted Voting Shares and Limited Voting Shares shall receive AYR SVS Shares, Restricted Voting Shares and Limited Voting Shares, respectively, unless otherwise determined by the Board, provided an equal number of shares is declared as a dividend or distribution on a per-share basis, without preference or distinction, in each case.

Subdivision or Consolidation

No subdivision or consolidation of any class of AYR SVS Shares shall occur unless simultaneously, all other classes of Shares are subdivided or consolidated or otherwise adjusted in the same manner so as to maintain and preserve the relative rights of the holders of each of the classes of Shares.

Liquidation, Dissolution or Winding-Up

In the case of liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, or in the event of any other distribution of assets of the Corporation for the purposes of a dissolution or winding-up of the Corporation, the holders of AYR SVS Shares are entitled, subject to the prior rights of the holders of any shares of the Corporation ranking in priority to the AYR SVS Shares, to receive the Corporation’s remaining property and are entitled to share equally, on a share for share basis, with all other classes of Shares in all distributions of such assets.

Rights to Subscribe; Pre-Emptive Rights

The holders of AYR SVS Shares are not entitled to a right of first refusal to subscribe for, purchase or receive any part of any issue of shares, or bonds, debentures or other securities of the Corporation now or in the future.

Conversion

For the purposes of the AYR SVS Shares, (i) a “U.S. Person” means resident of the United States, and a “Non-U.S. Person” is any person who is not a U.S. Person, and (ii) “held of record” has the meaning set forth in Rule 12g5-1 of the 1934 Act. Under the Articles, where AYR SVS Shares are held of record, directly or indirectly, or jointly by: (i) one or more U.S. Persons; and (ii) one or more Non-U.S. Persons, such AYR SVS Shares shall be deemed to be held of record by a U.S. Person. At the request of the Corporation, beneficial AYR Shareholders and actual or proposed transferees are required to respond to enquiries regarding their status as U.S. Persons or Non-U.S. Persons, and are required to provide declarations or other documents with respect thereto, as may be necessary or desirable, in the discretion of the Corporation, failing which they would, in the Corporation’s discretion, be deemed to be U.S. Persons.

If, at any given time, the AYR SVS Shares are held of record by U.S. Persons, they will be automatically converted, without further act or formality, on a one-for-one basis into Restricted Voting Shares. If, at any given time, the Restricted Voting Shares or the Limited Voting Shares are held of record by Non-U.S. Persons, they will be automatically converted, without further act or formality, on a one-for-one basis into AYR SVS Shares.

Notwithstanding the foregoing, if, at any given time, the total number of Restricted Voting Shares represents a number equal to or in excess of the formulaic threshold set forth below (the “FPI Threshold”), then the minimum number of Restricted Voting Shares required to stay within the FPI Threshold will be automatically converted, without further act or formality, on a pro rata basis across all registered holders of Restricted Voting Shares (rounded up to the next nearest whole number of shares), on a one-for-one basis, into Limited Voting Shares:

If, at any given time, the total number of Restricted Voting Shares represents a number below the FPI Threshold, then a number of Limited Voting Shares will be automatically converted, without further act or formality, on a pro rata basis across all registered holders of Limited Voting Shares (rounded down to the next nearest whole number of shares), on a one-for-one basis, into Restricted Voting Shares, to the maximum extent possible such that the Restricted Voting Shares then represent a number of Shares that is one share less than the FPI Threshold.

The Corporation has received exemptive relief from the Canadian securities regulatory authorities such that, inter alia, each class of Restricted Shares may be aggregated for the purposes of certain securities law reporting thresholds, including in respect of certain take-over bid and issuer bid rules and the early warning requirements under NI 62-104.

If an offer is made to purchase any class of Shares (other than a class of Restricted Shares) and such offer is one which is required, pursuant to applicable securities legislation or the rules of a stock exchange on which such Shares that are subject to the offer are then listed, to be made to all or substantially all the holders of such Shares in a given province of Canada to which these requirements apply (assuming that the offeree was a resident in Ontario), each Subordinate Voting Share, Restricted Voting Share and/or Limited Voting Share shall become convertible, at the option of the holder, on a one-for-one basis, into such class of Shares that are subject to the offer, at any time while such offer is in effect until the date prescribed by applicable securities legislation for the offeror to take up and pay for such shares as are to be acquired pursuant to such offer. The conversion right may only be exercised in respect of AYR SVS Shares, Restricted Voting Shares and/or Limited Voting Shares, as applicable, for the purpose of depositing the resulting Shares pursuant to the offer, and for no other reason, including with respect to voting rights attached thereto, which are deemed to remain subject to the provisions concerning voting rights for AYR SVS Shares, Restricted Voting Shares and/or Limited Voting Shares, as applicable, notwithstanding their conversion. The transfer agent is required to deposit the resulting Shares pursuant to such offer on behalf of such holder.

Should the applicable Shares issued upon such conversion and tendered in response to such offer be withdrawn by AYR Shareholders or not taken up by the offeror, or should the offer be abandoned or withdrawn, then each Share resulting from such conversion shall be automatically reconverted, without any further act on the part of the Corporation or on the part of the holder, into one Subordinate Voting Share, Restricted Voting Share or Limited Voting Share, as applicable.

Constraints on Share Ownership

Subject to certain specified exceptions set out in the Articles, as amended, the AYR SVS Shares may only be owned or controlled by Non-U.S. Persons.

Renamed as Common Shares

At the effective time that there are no Multiple Voting Shares issued and outstanding (by the conversion of all Multiple Voting Shares, in accordance with their terms, into AYR SVS Shares or Restricted Voting Shares, as applicable), the AYR SVS Shares will henceforth be named and referred to as “Common Shares”. Unless earlier converted, the Multiple Voting Shares will convert to SVS or Restricted Voting Shares in May of 2024.

Anti-Dilutive Warrants

The Anti-Dilutive Warrants will be exercisable for two years following closing of the Transaction at U.S.$2.12 per share, representing a 40% premium to the 10-trading day volume weighted adjusted price of the New AYR Shares on October 31, 2023. For further information, see “Anti-Dilutive Warrants”.

STATE REGULATORY APPROVAL MATTERS

In connection with the New AYR Exchange Shares to be issued to the former Senior Noteholders along with the New 2026 Notes under the Arrangement, and to the extent applicable in each State in which the Corporation and its subsidiaries operate, each applicable licensed subsidiary of the Corporation will, prior to the closing of the Arrangement, submit a change of ownership application to the applicable State regulator (collectively, the “State Regulatory Approvals”). While the content of the application and the process varies depending on each applicable State, the same will typically include details on any holder whose ownership of AYR SVS Shares exceeds a certain threshold specified in the applicable regulations, as well as background checks and registration for all such holders.

State Regulatory Approvals may be required by the applicable regulators in each of the states in which the Corporation operates.

There can be no assurance as to the outcome of the State Regulatory Approval processes, including the undertakings and conditions that may be required for approval or whether the State Regulatory Approvals will be obtained. If not obtained, the Arrangement may not be completed.

RISK FACTORS

Senior Noteholders should carefully consider all of the information disclosed or referred to in this Circular prior to voting on the matters being put before them at the Meeting. In addition to the other information presented in this Circular, the following risk factors should be given consideration.

The completion of the Arrangement may not occur or may be delayed.

The Corporation will not be able to complete the Arrangement unless and until all conditions precedent to the Arrangement are satisfied or waived (where permitted). These conditions include certain items that are outside of the Corporation’s control, such as the state regulatory approvals and the requirement that the Court shall have determined that the Arrangement is fair and reasonable and granted the Final Order. Even if the Arrangement is not completed, it may not be completed on the timeline described in this Circular and/or provided for in the Support Agreement. Accordingly, Senior Noteholders participating in the Arrangement may have to wait longer than expected to receive their entitlements under the Plan. In addition, if the Arrangement is not completed on the schedule described in this Circular, the Corporation may incur additional expenses. If the Arrangement is not completed at all, the Corporation will more than likely face significant liquidity challenges in mid-2024 unless an alternative transaction can be completed.

The Support Agreement may be terminated.

Each of AYR and the Requisite Supporting Senior Noteholders have the right to terminate the Support Agreement in certain circumstances. Accordingly, there is no certainty, nor can AYR provide any assurance, that the Support Agreement will not be terminated by either AYR or the Supporting Senior Noteholders before the completion of the Arrangement. In addition, certain costs related to the Arrangement, such as legal and certain financial advisor fees, must be paid by AYR even if the Arrangement is not completed. If the Support Agreement is terminated and the Arrangement is not completed, the Corporation will more than likely face significant liquidity challenges starting in mid-2024 unless an alternative transaction can be completed.

Completion of the Arrangement is subject to receipt of required U.S. state regulatory approvals and approval of the Court.

The completion of the Arrangement is conditional on receiving the State Regulatory Approvals and approval of the Court that the Arrangement is fair and reasonable. There can be no certainty, nor can the Corporation provide any assurance, that such approvals will be obtained on a timely basis or at all.

If the Arrangement is not completed, the market price or value of the Senior Notes and/or of the AYR SVS Shares may decline.

If the Arrangement is not completed or its completion is materially delayed and/or the Support Agreement is terminated, then the market price or value of the Senior Notes and/or of the AYR SVS Shares may decline. The Corporation’s business, financial condition or results of operations could also be subject to various material adverse consequences, including in connection with, in particular, the upcoming maturity of certain Seller Notes and the December 2024 maturity of the Senior Notes. If the Support Agreement is terminated and the Arrangement is not completed, the Corporation will more than likely face significant liquidity challenges starting in mid-2024 unless an alternative transaction can be completed.

The State Regulatory Approvals may not be obtained or, if obtained, may not be obtained on a favorable basis.

To complete the Arrangement, the Corporation must make certain filings with and obtain certain consents and approvals from various U.S. State cannabis regulators. The State Regulatory Approvals have not yet been obtained. In some cases, U.S. states may prohibit shareholders of the Corporation from holding certain levels of direct or indirect interests in other cannabis businesses in the state. As a result, the Corporation and/or the Supporting Seller Noteholders may elect to divest or restructure their assets or holdings in such states. There can be no assurance that the Supporting Senior Noteholders will not resist any such divestitures and/or restructurings of interests in the Corporation and/or of other interests they may hold, or may be unable to achieve them, if required by U.S. state regulators. The regulatory approval processes and any such divestitures and/or restructurings may take a lengthy period of time to complete, which could delay completion of the Arrangement. If obtained, the State Regulatory Approvals may be conditioned, with the conditions imposed by the applicable governmental entity not being acceptable to the Corporation and/or the Supporting Senior Noteholders. There can be no assurance as to the outcome of the U.S. state regulatory approval processes, including the undertakings and conditions that may be required for approval, or whether the State Regulatory Approvals will be obtained. If required U.S. state regulatory approvals are not obtained, the Arrangement may not be completed. If the Arrangement is not completed, the Corporation will more than likely face significant liquidity challenges starting in mid-2024 unless an alternative transaction can be completed.

The uncertainty surrounding the Arrangement could negatively impact the Corporation’s current and future operations, financial condition and prospects.

As the Arrangement is conditional on receiving approval from the State Regulatory Approvals and approval of the Court that the Arrangement is fair and reasonable, its completion is uncertain. If the Arrangement is not completed for any reason, there are risks that the announcement of the Arrangement and the dedication of the Corporation’s resources to the attempted completion thereof could negatively impact current and future operations, financial condition and prospects of the Corporation. In addition, the Corporation has, and will continue to, incur significant transaction expenses in connection with the Arrangement, regardless of whether the Arrangement is completed. If the Arrangement is not completed, the Corporation may run out of liquidity in mid-2024 unless an alternative transaction can be completed.

The pending Arrangement may divert the attention of the Corporation’s management.

The pending Arrangement could cause the attention of the Corporation’s management to be diverted from the day-to-day operations. These disruptions could be exacerbated by a delay in the completion of the Arrangement and could have an adverse effect on the business, operating results or prospects of the Corporation regardless of whether the Arrangement is ultimately completed.

Despite the Corporation’s current level of indebtedness, the Corporation may be able to incur more debt following completion of the Arrangement. This level of indebtedness could further exacerbate risks to the Corporation’s financial condition.

The Corporation may be able to incur additional indebtedness in the future. Although the Amended and Restated Indenture will contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions. If the Corporation incurs any such additional indebtedness, it may have the effect of reducing the amount of proceeds distributed to its creditors and/or shareholders in connection with any future insolvency, liquidation, reorganization, dissolution or other winding-up proceeding involving the Corporation. If new debt is added to the Corporation’s current debt levels, the related risks that the Corporation and its subsidiaries now face could intensify.

The Arrangement may have adverse tax consequences on the Corporation.

The Corporation is a resident of Canada for Canadian federal income tax purposes, and is also treated as a U.S. corporation for U.S. federal income tax purposes, pursuant to section 7874(b) of the Internal Revenue Code, as amended (the “Code”), and is subject to U.S. federal income tax on its worldwide income. As a result, subject to an applicable tax treaty or convention, the Corporation is subject to taxation both in Canada and the U.S., which could have a material adverse effect on the Corporation’s business, financial condition and results of operations. Accordingly, Senior Noteholders should consult with their own tax advisors in this regard.

Depending on the future trading price or value of the New 2026 Notes and the AYR SVS Shares, the Corporation may suffer material “cancellation of debt income” under U.S. federal income tax laws which could give rise to material tax obligations which may have a material adverse effect on the Corporation. As a cannabis company, the Corporation is currently unable to deduct many expenses as a result of the application of section 280E of the Code.

The tax laws of any applicable country, province, state or territory (including Canadian and United States federal income tax laws), and the administrative application and interpretation of such laws, are subject to change. Any change in the tax laws that are applicable to the Corporation or the interest held by a Senior Noteholder in the Corporation, or the administrative application or interpretation of such laws, could have an adverse impact on such Senior Noteholder’s interests in the Corporation.

While the Corporation is confident in its tax filing positions in connection with the Arrangement, it has not sought or obtained from any tax authority advance confirmation of such positions (including an advance income tax ruling from the Canada Revenue Agency or a private letter ruling from the Internal Revenue Service), therefore it is possible that such positions may be successfully challenged by tax authorities, which could result in materially different tax consequences than anticipated. It is possible that the Canadian and/or

United States tax authorities could take positions or adopt interpretations regarding the applicable tax consequences to Senior Noteholders or AYR Shareholders that differ from those set out in this Circular. Senior Noteholders and AYR Shareholders should consult their own tax advisors.

Following the Arrangement, the Corporation may not be able to generate sufficient cash to service all of its indebtedness, including the New 2026 Notes, and may be forced to take other actions to satisfy its obligations under its indebtedness, which may not be successful.

The Corporation’s ability to make scheduled payments on or to refinance its debt obligations, including the New 2026 Notes and the Seller Notes (some of the maturity dates of which are subject to extension), depends on its financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond the Corporation’s control. The Corporation may be unable to maintain a level of cash flow from operating activities sufficient to permit it to pay the principal, premium, if any, and interest on its indebtedness, including the New 2026 Notes and the Seller Notes.

If the Corporation’s cash flows and capital resources are insufficient to fund its debt service obligations, the Corporation could face substantial liquidity problems and could be forced to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance its indebtedness. The Corporation may not be able to effect any such alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful, such alternative actions may not allow the Corporation to meet its scheduled debt service obligations.

The Corporation’s inability to generate sufficient cash flows to satisfy its debt obligations, or to refinance its indebtedness on commercially reasonable terms or at all, would materially and adversely affect the Corporation’s business, financial position and results of operations and its ability to satisfy its obligations under the New 2026 Notes and the Seller Notes.

The Support Agreement and Amended and Restated Indenture contain additional restrictive covenants

The Support Agreement contains interim operating covenants that are more restrictive than the covenants under the Existing Indenture and may limit the Corporation’s ability to respond to developments in its business or the broader economy prior to completion of the Transaction. Following completion of the Transaction, the Amended and Restated Indenture will contain covenants that restrict AYR’s ability to engage in certain transactions and may impair its ability to respond to changing business and economic conditions. These covenants restrict, among other things, AYR’s ability to pay dividends and make other payments, incur additional indebtedness, maintain a certain amount of unrestricted cash, maintain certain leverage ratios starting in the third quarter of 2024, make certain investments, and acquisitions and transfer and sell assets. Future indebtedness or other contracts could contain financial or other covenants more restrictive than those contained in the Amended and Restated Indenture.

The ability of AYR and its subsidiaries to comply with these provisions may be affected by general economic conditions, political decisions, industry conditions and other events beyond its control. As a result, AYR cannot assure New 2026 Noteholders that it and its subsidiaries will be able to comply with the covenants described above. The Corporation’s and its subsidiaries’ failure to comply with the covenants contained in their debt instruments, including failure as a result of events beyond their control, could result in an event of default, which could materially and adversely affect AYR’s consolidated operating results and financial condition.

In addition, if there were an event of default under one of such debt instruments, the holders of the defaulted debt could cause all amounts outstanding with respect to that debt to become due and payable immediately which may cause cross-defaults to other debt. AYR cannot assure holders of the New 2026 Notes that its consolidated assets or cash flow would be sufficient to fully repay borrowings under its outstanding debt instruments if accelerated upon an event of default, or that AYR would be able to repay, refinance or restructure the payments on those debt instruments.

There may not be sufficient collateral security to pay all or any of the New 2026 Notes.

No appraisal of the value of the collateral which will secure the New 2026 Notes has been made and the value of such collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. Consequently, liquidating the collateral securing the New 2026 Notes may not produce proceeds in an amount sufficient to pay any amounts due thereon.

The fair market value of the collateral expected to secure the New 2026 Notes is subject to fluctuations based on factors that include, among others, the condition of the United States cannabis industry, the ability to sell the collateral in an orderly sale, general economic conditions, the availability of buyers, other secured debt including certain Seller Notes and other factors. The amount to be received upon a sale of the collateral would be dependent on numerous factors, including, but not limited to, the actual fair market value of the collateral at such time and the timing and manner of the sale. By their nature, portions of the collateral may be illiquid and may have no readily ascertainable market value, or may be difficult to dispose of for regulatory reasons. Accordingly, there can be no assurance that the collateral could be sold in a short period of time or in an orderly manner. In the event of a foreclosure, liquidation, reorganization, bankruptcy or other insolvency proceeding, it cannot be assured that the proceeds from any sale or liquidation of the collateral will be sufficient to pay the Corporation’s obligations under the New 2026 Notes. In addition, in the event of any such proceeding, the ability of the holders of the New 2026 Notes to realize upon any of the collateral may be subject to United States bankruptcy and insolvency law limitations as a result of the Corporation operating a cannabis business.

Anti-Dilutive Warrants may only be exercised outside the United States pursuant to Regulation S or inside the United States by Accredited Investors in compliance with the U.S. securities laws or in compliance with another exemption from the registration requirements of the U.S. Securities Act; and the underlying AYR SVS Shares may be subject to restrictions on trading under U.S. securities laws.

The Anti-Dilutive Warrants may only be exercised outside the United States pursuant to Regulation S under the U.S. Securities Act or inside the United States by Accredited Investors in compliance with the U.S. securities laws or in compliance with another exemption from the registration requirements of the U.S. Securities Act, and in each case, in compliance with any applicable local securities laws. Further, the AYR SVS Shares underlying such Anti-Dilutive Warrants will be considered “restricted securities” under U.S. federal securities laws and subject to restrictions on transfer unless registered pursuant to an effective registration statement or transferred under an available exemption from the registration requirements of the U.S. Securities Act. In particular, during the 40-day period following distribution of the Anti-Dilutive Warrants, no offer or sale of the AYR SVS Shares underlying the Anti-Dilutive Warrants may be made to a U.S. Person or for the account or benefit of a U.S. Person. See “Securities Law Matters – United States” for further information regarding further U.S. securities law restrictions that may apply to the Anti-Dilutive Warrants, the AYR SVS Shares and the other securities issued in connection with the Arrangement and corresponding Transaction. The Corporation will not be required to, and does not intend to, register the AYR SVS Shares under the U.S. Securities Act. All securityholders are urged to consult with their own legal counsel to ensure that any subsequent resale of securities issued to them in connection with the Arrangement and corresponding Transaction complies with applicable securities legislation.

EXPERTS

Certain Canadian legal matters relating to matters described in this Circular are to be passed upon by Stikeman Elliott LLP on behalf of the Corporation. Certain U.S. securities law matters relating to matters described in this Circular are to be passed upon by Weil, Gotshal & Manges LLP on behalf of the Corporation. As at the date of this Circular, the partners and associates of Stikeman Elliott LLP, Weil, Gotshal & Manges LLP and Koger, each beneficially owned, directly or indirectly, less than 1% of the outstanding Senior Notes and AYR SVS Shares.

INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON

Except as described herein, no director or executive officer of the Corporation, or any person who has held such a position since the beginning of the last completed financial year end of the Corporation, nor any associate or affiliate of the foregoing persons, has any substantial or material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted on at the Meeting.

Jonathan Sandelman, the Executive Chair of the Corporation, indirectly holds approximately 3.7 million multiple voting shares of the Corporation. Lou Karger, a director of AYR, is the Sellers’ Representative for Green Partners Investor LLC and the other selling securityholders under the equity exchange agreement dated as of May 24, 2019, as amended, relating to the Corporation’s Massachusetts-based acquisition of Sira Naturals Inc. (the “EEA”). As announced in AYR’s press release dated May 12, 2023, the payment terms under the EEA, which were expected to result in a cash payment of U.S.$27.5 million on or before May 1, 2024, have been amended to be paid on the later of (i) the date that is ten calendar days following the maturity date of AYR’s 12.5% senior notes due December 10, 2024 (as may be amended or extended); or (ii) May 1, 2026, but in no event later than December 10, 2026. The unpaid portions of the EEA earn-outs will bear interest at a rate of 6% per annum with 10% annual amortization. Lou Karger is also the Manager of Green Partners Lender I LLC which owns approximately U.S.$0.85 million worth of certain Seller Notes, the maturity of which have not been extended.

PRINCIPAL HOLDERS OF SECURITIES

Following completion of the Transaction and following the issuance of the New AYR Shares and the Backstop Shares, to the knowledge of the Corporation, no person is expected to beneficially own, or control, directly or indirectly, 10% or more of the then outstanding AYR SVS Shares, other than Millstreet.

Millstreet has advised that, following the issuance of the New AYR Shares and the Backstop Shares, based on its current holdings, it expects that it would beneficially own, or control, directly or indirectly, approximately 14% of the then outstanding AYR SVS Shares or approximately 11.7% assuming the exercise in full of the Anti-Dilutive Warrants.

OTHER BUSINESS

The Special Committee is not aware of any matters intended to come before the Meeting other than those items of business set forth in the attached Notice of Meeting of Senior Noteholders accompanying this Circular. If any other matters properly come before the Meeting, it is the intention of the persons named in the Proxy to vote in respect of those matters in accordance with their judgment.

ADDITIONAL INFORMATION

Financial information for the Corporation’s most recently completed financial year is provided in the Corporation’s 2022 Financial Statement and 2022 MD&A, and the 2023 Interim Financials and related 2023 Interim MD&A. Copies of these documents, the 2022 AIF, the 2023 AGM Circular and this Circular are available upon request made via email to IR@ayrwellness.com and are also available electronically on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov.

APPROVAL OF THE SPECIAL COMMITTEE

The contents and sending of this Circular and its distribution to Senior Noteholders have been approved by the Special Committee.

DATED at Miami, Florida, this 15^th day of November, 2023.

AYR WELLNESS INC.

BY ORDER OF THE SPECIAL COMMITTEE

Brad Asher

Chief Financial Officer and Secretary

AYR Wellness Inc.

CONSENT OF KOGER

We hereby consent to the inclusion of our firm’s name and to the references to our firm’s opinion dated October 31, 2023 with respect to the fairness, from a financial point of view, of the Transaction (the “Fairness Opinion”), in the management information circular of AYR Wellness Inc. (the “Corporation”) dated November 15, 2023 (the “Circular”) and to the inclusion of the Fairness Opinion in its entirety and summaries thereof in the Circular and to the filings thereof, as necessary, by the Corporation with the CBCA Director and with the securities regulatory authorities in each province and territory of Canada. In providing our consent herein, we do not intend that any person other than the Special Committee of the Corporation shall rely upon such opinion.

APPENDIX A

ARRANGEMENT RESOLUTION

SPECIAL RESOLUTION OF THE HOLDERS
(the “Senior Noteholders”)

OF

12.50% SENIOR SECURED NOTES DUE DECEMBER 10, 2024

OF

AYR WELLNESS INC.
(the “Corporation”)

BE IT RESOLVED THAT:

APPENDIX B

PLAN OF ARRANGEMENT

Court File No. CV-23-00709606-00CL

ONTARIO
SUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)

IN THE MATTER OF AN APPLICATION UNDER SECTION 192 OF THE CANADA BUSINESS CORPORATIONS ACT, R.S.C. 1985, c. C-44, AS AMENDED, AND RULES 14.05(2) AND 14.05(3) OF THE RULES OF CIVIL PROCEDURE

AND IN THE MATTER OF A PROPOSED ARRANGEMENT OF AYR WELLNESS CANADA HOLDINGS INC., AND INVOLVING AYR WELLNESS INC., 242 CANNABIS LLC, AYR OHIO LLC, AYR WELLNESS HOLDINGS LLC, AYR WELLNESS NJ LLC, BP SOLUTIONS LLC, CSAC ACQUISITION IL CORP., CSAC ACQUISITION NJ CORP., CSAC ACQUISITION NV CORP., CSAC ACQUISITION TX CORP., CSAC HOLDINGS INC., CULTIVAUNA, LLC, DFMMJ INVESTMENTS LLC, DWC INVESTMENTS, LLC, GREEN LIGHT HOLDINGS, LLC, GREEN LIGHT MANAGEMENT, LLC, HERBAL REMEDIES DISPENSARIES, LLC, KLYMB PROJECT MANAGEMENT, INC., KYND-STRAINZ LLC, LEMON AIDE LLC, LIVFREE WELLNESS LLC, PA NATURAL MEDICINE LLC, PARKER SOLUTIONS NJ, LLC, TAHOE CAPITAL COMPANY, TAHOE HYDROPONICS COMPANY, LLC, TAHOE-RENO BOTANICALS, LLC, TAHOE-RENO EXTRACTIONS, LLC, CSAC ACQUISITION FL CORP., CSAC ACQUISITION INC., CSAC ACQUISITION MA II CORP., AMETHYST HEALTH LLC, CANNTECH PA, LLC, CSAC ACQUISITION CONNECTICUT LLC, MERCER STRATEGIES PA, LLC, CSAC ACQUISITION PA CORP., CSAC ACQUISITION PA II CORP., DOCHOUSE, LLC, SIRA NATURALS, INC., ESKAR LLC AND AYR NJ LLC, CSAC OHIO, LLC, MERCER STRATEGIES FL, LLC, PARKER RE MA, LLC, PARKER RE PA, LLC, PARKER SOLUTIONS IL, LLC, PARKER SOLUTIONS OH, LLC, PARKER SOLUTIONS PA, LLC, PARKER SOLUTIONS FL, LLC, MERCER STRATEGIES MA, LLC, PARKER SOLUTIONS MA, LLC

PLAN OF ARRANGEMENT

November 15, 2023

TABLE OF CONTENTS

Page

ARTICLE 1
INTERPRETATION

In this Plan, unless otherwise stated:

“2024 Notes” means the 12.5% senior notes due December 10, 2024 issued by Ayr pursuant to the Existing Indenture;

“2024 Notes Claims” means all outstanding liabilities, debts and obligations, including without limitation principal and interest, any make whole, any prepayment, redemption or similar premiums, reimbursement obligations, fees, penalties, damages, guarantees, indemnities, costs, expenses or otherwise, and any other liabilities, debts or obligations, whether direct or indirect, absolute or contingent, known or unknown, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the 2024 Notes Documents, owing by any Person (whether as issuer, guarantor or otherwise) as at the Effective Date;

“2024 Noteholders” means Holders of 2024 Notes;

“2024 Note Documents” means, collectively, the Existing Indenture, the 2024 Notes, the Existing Guarantees and all security and other documentation related to the 2024 Notes;

“2024 Noteholders Arrangement Resolution” means the resolution of the 2024 Noteholders, inter alia, approving the Arrangement to be considered and voted upon at the 2024 Noteholders Meeting, substantially in the form attached as Appendix “A” to the Circular;

“2024 Noteholders Meeting” means the meeting of 2024 Noteholders as of the Meeting Record Date called and held pursuant to the Interim Order for the purpose of considering and voting on the 2024 Noteholders Arrangement Resolution and to consider and vote on such other matters as may properly come before such meeting, and includes any adjournment(s) or postponement(s) of such meeting;

“Amended and Restated Trust Indenture” means the Amended and Restated Trust Indenture, in form and substance satisfactory to AYR and the Applicant and the Requisite Supporting Senior Noteholders, to be entered into among Ayr, the Applicant, the Existing Guarantors, the New Guarantors and the Indenture Trustee on the Effective Date, which shall amend and restate the Existing Indenture and govern the 2024 Notes and New 2026 Notes, upon this Plan becoming effective on the Effective Date, as it may be further amended, restated, modified and/or supplemented in accordance with its terms from time to time after the Effective Date;

“Anti-Dilutive Warrants” means 23,046,067 warrants to purchase Ayr SVS Shares for a period of 2 years from the Effective Date at an exercise price per share of U.S.$2.12 issued on the Effective Date pursuant to the Warrant Agency Agreement and this Plan to existing Ayr Shareholders and Ayr Exchangeable Shareholders as of the Warrant Record Date;

“Applicant” means Ayr Wellness Canada Holdings Inc., a direct, wholly-owned subsidiary of Ayr;

“Applicant Assignment and Subordination Agreement” means an agreement among Ayr, the Applicant and the Indenture Trustee, in a form acceptable to the Applicant, Ayr and the Requisite Supporting Senior Noteholders, wherein (a) the Applicant assigns to the Indenture Trustee, by way of security for its obligations under and relating to the Amended and Restated Trust Indenture, all of its right, title and interest in the 2024 Notes and other 2024 Note Documents; and (b) Ayr and the Applicant each acknowledge and agree, inter alia, that (i) the 2024 Notes shall be subordinated in all respects, including (without limitation) in right of payment, to the New 2026 Notes, and no payment shall be made by Ayr in respect of the 2024 Notes while any amount owing in respect of the New 2026 Notes remain outstanding; (ii) the 2024 Notes shall be unsecured obligations of Ayr; (iii) the Applicant shall be prohibited from assigning, encumbering (except to and in favour of the Indenture Trustee as security for the Applicant’s obligations under and relating to the Amended and Restated Trust Indenture) or otherwise dealing with the 2024 Notes; and (iv) such agreement shall remain in full force and effect until such time as the Parent-Issuer Merger (as defined in the Amended and Restated Trust Indenture) occurs and the 2024 Notes are cancelled as a result thereof, whereupon the agreement shall deemed terminated and security granted in respect of the 2024 Notes shall be deemed released;

“Arrangement” means the arrangement under section 192 of the CBCA on the terms and subject to the conditions set out in this Plan, subject to any amendments, modifications and/or supplements made thereto in accordance with the terms of this Plan or made at the discretion of the Court in the Final Order with the prior written consent of Ayr, the Applicant and the Requisite Supporting Senior Noteholders, each acting reasonably;

“Articles of Arrangement” means the articles of arrangement of the Applicant in respect of the Arrangement, in form and substance satisfactory to the Applicant and the Requisite Supporting Senior Noteholders, that are required to be filed with the CBCA Director in order for the Arrangement to become effective on the Effective Date;

“Ayr” means Ayr Wellness Inc.;

“Ayr Entities” means, collectively, Ayr, the Applicant, and each other direct or indirect subsidiary of Ayr, and “Ayr Entity” means any of them;

“Ayr Exchangeable Shares” means the exchangeable shares in the capital of a subsidiary of Ayr, exchangeable for Ayr SVS Shares;

“Ayr Exchangeable Shareholders” means the Holders of Ayr Exchangeable Shares;

“Ayr MVS Shares” means the multiple voting shares in the capital of Ayr;

“Ayr Shareholders” means collectively the Holders of Ayr MVS Shares and Ayr SVS Shares;

“Ayr SVS Shares” means the subordinate voting, limited voting and restricted voting shares of Ayr;

“Backstop Commitment Letter” means the backstop commitment letter dated as of October 31, 2023 entered into by Backstop Provider, pursuant to which the Backstop Provider agreed to, among other things, purchase any of the New 2026 Additional Notes not otherwise purchased by the Supporting Senior Noteholders;

“Backstop Funding Premium” means the Put Option Premium (as defined in the Backstop Commitment Letter) payable to the Backstop Provider in accordance with the Backstop Commitment Letter;

“Backstop Provider” means the Backstop Party (as defined in the Backstop Commitment Letter);

“Backstop Shares” means (i) 5,947,980 Ayr SVS Shares, or (ii) at the option of the Backstop Provider, non-voting exchangeable shares of CSAC Acquisition NV Corp. that (A) in the event that the Backstop Provider sells such shares to an unrelated person, subject to obtaining any required regulatory approvals, will automatically be exchanged for 5,947,980 Ayr SVS Shares, and (B) will, subject to obtaining any required regulatory approvals, automatically be exchanged for 5,947,980 Ayr SVS Shares;

“Business Day” means any day, other than a Saturday, Sunday or a statutory or civic holiday, on which banks are generally open for business in Toronto, Ontario and Miami, Florida;

“Canadian Securities Administrators” means, collectively, the applicable securities commissions or regulatory authorities in each of the provinces and territories of Canada;

“Canadian Securities Laws” means, collectively, and, as the context may require, the applicable securities laws of each of the provinces and territories of Canada, and the respective regulations and rules made under those securities laws together with all applicable instruments, blanket orders and rulings of the Canadian Securities Administrators and all discretionary orders or rulings, if any, of the Canadian Securities Administrators made in connection with the transactions contemplated by the Plan, as the context may require;

“CBCA” means the Canada Business Corporations Act, R.S.C. 1985, c. C-44, as amended;

“CBCA Director” means the Director appointed under section 260 of the CBCA;

“CBCA Proceedings” means the proceedings commenced by the Applicant under the CBCA on November 13, 2023 in connection with this Plan;

“CDS” means CDS Clearing and Depository Services Inc. and its nominees, successors and assigns;

“Certificate of Arrangement” means the certificate giving effect to the Arrangement, to be issued by the CBCA Director pursuant to section 192(7) of the CBCA upon receipt of the Articles of Arrangement in respect of the Applicant in accordance with section 262 of the CBCA;

“Circular” means the management information circular of Ayr and the Applicant dated November 15, 2023, including all appendices thereto, as it may be amended, modified and/or supplemented from time to time, subject to the terms of the Interim Order or other Order of the Court;

“Claim” means any right or claim of any Person that may be asserted or made in whole or in part against the applicable Persons, or any of them, in any capacity, whether or not asserted or made, in connection with any indebtedness, liability or obligation of any kind whatsoever, and any interest accrued thereon or costs payable in respect thereof, whether at law or in equity, including by reason of the commission of a tort (intentional or unintentional), by reason of any breach of contract or other agreement (oral or written), by reason of any breach of duty (including, any legal, statutory, equitable or fiduciary duty), by reason of any right of setoff, counterclaim or recoupment, or by reason of any equity interest, right of ownership of or title to property or assets or right to a trust or deemed trust (statutory, express, implied, resulting, constructive or otherwise), and together with any security enforcement costs or legal costs associated with any such claim, and whether or not any indebtedness, liability or obligation is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, unsecured, perfected, unperfected, present or future, known or unknown, by guarantee, warranty, surety or otherwise, and whether or not any right or claim is executory or anticipatory in nature, including any claim made or asserted against the applicable Persons, or any of them, through any successor, assignee, affiliate, subsidiary, associated or related Person, or any right or ability of any Person to advance a claim for an accounting, reconciliation, contribution, indemnity, restitution or otherwise with respect to any matter, grievance, action (including any class action or proceeding before an administrative or regulatory tribunal), cause or chose in action, whether existing at present or commenced in the future;

“Court” means the Ontario Superior Court of Justice (Commercial List);

“Depositary” means Odyssey Trust Company or any other trust company, bank or equivalent financial institution agreed to in writing by the Applicant and the Requisite Supporting Senior Noteholders and appointed to carry out any of the duties of the Depositary hereunder;

“DRS” means Direct Registration System;

“DRS Advice” means an advice issued by the Transfer Agent, the Warrant Agent or the Indenture Trustee evidencing the securities held by a Holder of Ayr MVS Shares, Ayr SVS Shares, or other Ayr Entity securities (including, for greater certainty, the New Ayr Shares, the Backstop Shares, and the shares held by Ayr Exchangeable Shareholders), Anti-Dilutive Warrants, 2024 Notes and/or New 2026 Notes, as applicable, in lieu of a physical certificate;

“Effective Date” means the date shown on the Certificate of Arrangement issued by the CBCA Director;

“Effective Time” means such time on the Effective Date as may be specified by the Applicant as the time at which the Arrangement implementation steps set forth in Section 2.2 shall be deemed to commence;

“Existing Guarantees” means the guarantees delivered pursuant to the Existing Indenture guaranteeing the indebtedness and obligations under the Existing Indenture and the 2024 Notes;

“Existing Guarantors” means collectively, the Applicant, CannaPunch of Nevada LLC, CSAC Acquisition IL Corp., CSAC Acquisition MA II Corp., CSAC Acquisition NJ Corp., CSAC Acquisition PA Corp., CSAC Acquisition PA II Corp., CSAC Holdings Inc., CSAC Ohio, LLC, DocHouse LLC, DWC Investments, LLC, Mercer Strategies PA, LLC, Parker Solutions MA LLC, Parker Solutions PA, LLC, Sira Naturals, Inc., CSAC Acquisition Inc., CSAC Acquisition FL Corp., AYR Wellness Holdings LLC, Tahoe-Reno Botanicals, LLC, Tahoe-Reno Extractions, LLC, Kynd-Strainz LLC, Lemon Aide LLC, DFMMJ Investments, LLC, Parker RE MA LLC, CannTech PA, LLC, 242 Cannabis, LLC;

“Existing Indenture” means the trust indenture dated as of December 10, 2020 among Ayr and the Indenture Trustee, as amended, restated, and/or supplemented up to the date hereof;

“Final Order” means the Order of the Court approving the Arrangement under section 192 of the CBCA, which shall include such terms as may be necessary or appropriate to give effect to the Arrangement and this Plan, in form and substance satisfactory to the Applicant, Ayr and the Requisite Supporting Senior Noteholders, as such Order may be amended from time to time in a manner acceptable to the Applicant, Ayr and the Requisite Supporting Senior Noteholders;

“Governmental Entity” means any government, regulatory authority, governmental department, agency, commission, bureau, official, minister, Crown corporation, court, board, tribunal or dispute settlement panel or other law, rule or regulation-making organization (including any stock exchange and the Canadian Investment Regulatory Organization) or entity: (i) having or purporting to have jurisdiction on behalf of any nation, province, territory or state or any other geographic or political subdivision of any of them; or (ii) exercising, or entitled or purporting to exercise any administrative, executive, judicial, legislative, policy, regulatory or taxing authority or power;

“Holder” means a Person in whose name a note, warrant or share is registered, as the context requires;

“Indenture Trustee” means Odyssey Trust Company as trustee under the Existing Indenture and the Amended and Restated Trust Indenture, and its successors and assigns;

“Interim Order” means the interim Order of the Court granted on November 15, 2023, pursuant to section 192 of the CBCA, which, among other things, approves the calling of, and the date for, the 2024 Noteholders Meeting, and as may be amended from time to time in a manner acceptable to the Applicant, Ayr and the Requisite Supporting Senior Noteholders;

“Interest Payment Date” has the meaning ascribed thereto in the Existing Indenture;

“Intermediary” means a broker, custodian, investment dealer, nominee, bank, trust company or other intermediary;

“Law” means any law, statute, constitution, treaty, convention, code, injunction, order, decree, consent decree, judgment, rule, regulation, ordinance or other pronouncement having the effect of law whether in Canada, the United States, or any other country, or any domestic or foreign state, county, province, territory, city or other political subdivision or of any Governmental Entity, and includes any applicable rules or regulations of any applicable securities regulator, the Canadian Investment Regulatory Organization or the Canadian Securities Exchange;

“Letter of Transmittal” means the letter of transmittal in connection with the Arrangement forwarded by Ayr to registered 2024 Noteholders holding physical certificate(s) representing 2024 Notes;

“Meeting Record Date” means November 8, 2023 as may be amended by Ayr in accordance with the Interim Order;

“New 2026 Additional Notes” means the New 2026 Notes in the aggregate principal amount of U.S.$50,000,000 (inclusive of original issue discount), issued to the New 2026 Notes Purchasers pursuant to the Amended and Restated Trust Indenture in accordance with this Plan;

“New 2026 Exchange Notes” means the New 2026 Notes in the aggregate principal amount of U.S.$243,250,000, issued to the 2024 Noteholders pursuant to the Amended and Restated Trust Indenture in accordance with this Plan;

“New 2026 Notes” means the new 13% senior notes due December 10, 2026, to be issued by the Applicant, as Substituted Issuer, and to be guaranteed by Ayr and the Existing Guarantors and the New Guarantors, in each case, pursuant to the Amended and Restated Trust Indenture and this Plan, which notes will be denominated in U.S. Dollars and constitute a new series under the Amended and Restated Trust Indenture. For greater certainty, the New 2026 Notes are comprised of the New 2026 Exchange Notes and the New 2026 Additional Notes;

“New 2026 Notes Documents” means, collectively, the Amended and Restated Trust Indenture, the New 2026 Notes, the New Guarantees and the guarantees to be provided by Ayr and the Existing Guarantors and the New Guarantors pursuant to the Amended and Restated Trust Indenture, the Applicant Assignment and Subordination Agreement, and the new security agreements (as applicable) to be entered into by the Existing Guarantors and the New Guarantors, and all other documents and agreements related thereto, in each case, in a form acceptable to the Applicant, Ayr and the Requisite Supporting Senior Noteholders;

“New 2026 Notes Purchasers” means, collectively, the purchasers of the New 2026 Additional Notes;

“New Ayr Exchange Shares” means a total of 29,040,140 Ayr SVS Shares to be issued to the 2024 Noteholders based upon their respective Pro Rata Share in accordance with this Plan;

“New Ayr Shares” means (i) the New Ayr Exchange Shares, and (ii) the Backstop Shares if issued as Ayr SVS Shares.

“New Guarantees” means the new guarantees of the New 2026 Notes to be provided by the New Guarantors, including, for greater certainty, all general, collateral and other security agreements entered into by the New Guarantors;

“New Guarantors” means the Ayr Entities other than the Applicant, Ayr, the Existing Guarantors and Ayr Foundations Inc.;

“Order” means any order entered by the Court in the CBCA Proceedings;

“Person” means any individual, firm, corporation, partnership, limited or limited liability partnership, limited or unlimited liability company, joint venture, fund, association, organization, trust, trustee, executor, administrator, legal personal representative, estate, group, unincorporated association or organization, Governmental Entity or any agency, instrumentality or political subdivision of a Governmental Entity, or any other entity or body, whether or not having legal status;

“Plan” means this plan of arrangement and any amendments, restatements, modifications and/or supplements hereto made in accordance with the terms hereof;

“Proxy, Information and Exchange Agent” means Carson Proxy Advisors Ltd. or any other Person appointed by Ayr for such purpose;

“Pro Rata Share” means, in respect of a 2024 Noteholder, (i) the total principal amount of 2024 Notes held by that 2024 Noteholder as at the Effective Date, divided by (ii) the aggregate principal amount of 2024 Notes held by all 2024 Noteholders as at the Effective Date;

“Release Carve-Outs” has the meaning given thereto in Section 4.1;

“Released Claims” has the meaning given thereto in Section 4.1;

“Released Parties” means, collectively, (i) the Ayr Entities and each of their respective current and former directors, officers, principals, members, affiliates, limited partners, general partners, managers of accounts or funds, fund advisors, employees, shareholders, financial and other advisors, legal counsel and agents, including the Proxy, Information and Exchange Agent and the Indenture Trustee each in their capacity as such, and (ii) the Supporting Senior Noteholders and their respective current and former directors, officers, principals, members, affiliates, limited partners, general partners, managers of accounts or funds, fund advisors, employees, shareholders, financial advisors, legal counsel and agents, each in their capacity as such;

“Requisite Supporting Senior Noteholders” has the meaning ascribed thereto in the Support Agreement;

“Support Agreement” means the support agreement entered into by, among others, Ayr, the Applicant and the Supporting Senior Noteholders in connection with this Plan on October 31, 2023, as amended, restated, modified and/or supplemented from time to time pursuant to the terms thereof;

“Subordination Agreements” means the subordination agreements entered into by, among others, Ayr, the Indenture Trustee and certain seller noteholders pursuant to which the vendor take-back notes held by the seller noteholders were subordinated to the 2024 Notes;

“Subordinate Creditors” means any Person whose indebtedness owing by Ayr or other Ayr Entities is subordinated to the 2024 Notes pursuant to the Subordination Agreements;

“Supporting Senior Noteholders” has the meaning ascribed thereto in the Support Agreement;

“Supporting Senior Noteholders Advisors” means Goodmans LLP, Paul Hastings LLP and Ducera Partners LLC;

“Tax Act” means the Income Tax Act (Canada) as amended and all regulations thereunder;

“Taxes” means all income taxes, capital taxes, stamp taxes, charges to tax withholdings, sales and use taxes, value added taxes, goods and services taxes, and all penalties, interest and other payments thereon or in respect thereof, including a payment under the Tax Act, the U.S. Code, or any other federal, provincial, territorial, state, municipal, local or foreign tax law, in each case, as amended;

“Transfer Agent” means Odyssey Trust Company, in its capacity as the transfer agent and registrar of Ayr;

“U.S. Code” means the United States Internal Revenue Code of 1986;

“U.S. Securities Act” means the United States Securities Act of 1933, as amended;

“Warrant Agency Agreement” means the warrant agency agreement between Ayr and the Warrant Agent to be entered into on the Effective Date, in form and substance satisfactory to Ayr and the Requisite Supporting Senior Noteholders, each acting reasonably;

“Warrant Agent” means Odyssey Trust Company, in its capacity as warrant agent under the Warrant Agency Agreement; and

“Warrant Record Date” means the date that is seven (7) Business Days prior to the Effective Date.

For the purposes of this Plan:

This Plan shall be governed by and construed in accordance with the laws of Ontario and the federal laws of Canada applicable therein. All questions as to the interpretation or application of this Plan and all proceedings taken in connection with this Plan and its provisions shall be subject to the exclusive jurisdiction of the Court.

Unless otherwise stated, all references in this Plan to sums of money are expressed in, and all payments provided for herein shall be made in, U.S. Dollars.

If the date on which any action is required to be taken hereunder by a Person is not a Business Day, such action shall be required to be taken on the next succeeding day which is a Business Day.

Time shall be of the essence in this Plan. Unless otherwise specified, all references to time expressed in this Plan and in any document issued in connection with this Plan mean local time in Toronto, Ontario and Miami, Florida, and any reference to an event occurring on a Business Day shall mean prior to 5:00 p.m. on such Business Day.

The Arrangement will become effective at, and be binding at and after, the Effective Time on (i) the Applicant, Ayr, the Existing Guarantors, the New Guarantors and the other Ayr Entities, (ii) all current and former 2024 Noteholders, Ayr Shareholders and Ayr Exchangeable Shareholders; (iii) all current and former beneficial holders of 2024 Notes, Ayr Shares and Ayr Exchangeable Shares, (iv) the Backstop Provider, (v) the Indenture Trustee, (vi) the Warrant Agent, (vii) the Transfer Agent, (viii) the Depositary, and (ix) CDS.

ARTICLE 2
THE ARRANGEMENT

The adoption, execution, delivery, implementation and consummation of all matters contemplated under this Plan involving corporate action of any of the Applicant, Ayr or the other Ayr Entities will occur and be effective as of the Effective Date (or such other date as the Applicant, Ayr, the other Ayr Entities and the Requisite Supporting Senior Noteholders may agree, acting reasonably), and will be authorized and approved under this Plan and by the Court, where appropriate, as part of the Final Order, in all respects and for all purposes and without any requirement, except as expressly provided herein, of further action by the 2024 Noteholders, the Ayr Shareholders, the Ayr Exchangeable Shareholders or by the directors or officers of the Applicant, Ayr, the Existing Guarantors, the New Guarantors or any other Ayr Entity.

Following the Court granting the Final Order, but prior to the Effective Time, (a) the New Guarantors may enter into the New Guarantees guaranteeing the indebtedness and obligations under the Existing Indenture in respect of the 2024 Notes and, following the Effective Time, the indebtedness and obligations under the Amended and Restated Trust Indenture in respect of the New 2026 Notes; and (b) the Existing Guarantors may enter into confirmations regarding the Existing Guarantees or new guarantees guaranteeing the indebtedness and obligations under the Existing Indenture in respect of the 2024 Notes and, following the Effective Time, the indebtedness and obligations under the Amended and Restated Trust Indenture in respect of the New 2026 Notes.

At the Effective Time, the following events or transactions will occur, or be deemed to have occurred and be taken and effected, sequentially as set out below without any further authorization, act or formality, in each case, unless stated otherwise, effective as at five minute intervals commencing at the Effective Time:

All calculations made by the Applicant, Ayr or Indenture Trustee pursuant to this Plan, absent manifest error, shall be conclusive, final and binding on all Persons affected by this Plan.

ARTICLE 3
EXCHANGE OF 2024 NOTES AND ISSUANCE OF NEW 2026 NOTES, NEW AYR SHARES, BACKSTOP SHARES AND ANTI-DILUTIVE WARRANTS

On the Effective Date, CDS (or its nominee) as a registered 2024 Noteholder on behalf of certain 2024 Noteholders shall surrender, or cause the surrender of, the 2024 Notes it holds in exchange for the portion of the consideration payable to it as a 2024 Noteholder pursuant to Section 2.3. At the Effective Time, each 2024 Noteholder whose 2024 Notes are represented by a DRS Advice shall be deemed to have surrendered and transferred (free and clear of all liens and encumbrances), without any further action by the 2024 Noteholder, the 2024 Notes represented by DRS Advice to the Applicant in exchange for the portion of the consideration payable to it as a 2024 Noteholder pursuant to Section 2.3. On the Effective Date, each 2024 Noteholder holding a certificate representing 2024 Notes shall surrender, or cause the surrender of, the certificate(s) representing its respective 2024 Notes to the Depositary (with a duly completed Letter of Transmittal) in exchange for the portion of the consideration payable to it as a 2024 Noteholder pursuant to Section 2.3.

On the Effective Date, Ayr shall deliver: (i) a direction to the Warrant Agent instructing the Warrant Agent to issue the Anti-Dilutive Warrants, to be distributed under this Plan; and (ii) a reservation order to the Transfer Agent such that the number of Ayr SVS Shares issuable upon exercise of the Anti-Dilutive Warrants are reserved for issuance in the capital of Ayr. Thereafter, the Warrant Agent shall distribute the Anti-Dilutive Warrants (x) through the facilities of CDS who, in turn, will make delivery of the Anti-Dilutive Warrants to the ultimate beneficial recipients thereof pursuant to standing instructions and customary practices of CDS, as applicable, and/or (y) by providing DRS Advices or confirmations in the name of the applicable recipient thereof (or its Intermediary) that are registered as an Ayr Shareholder or Ayr Exchangeable Shareholder in Ayr’s records which are maintained by the Transfer Agent. The Anti-Dilutive Warrants will only be exercisable outside the United States pursuant to Regulation S under the U.S. Securities Act or inside the United States by Accredited Investors in compliance with the U.S. securities laws or in compliance with another exemption from the registration requirements of the U.S. Securities Act, and in each case, in compliance with any applicable local securities laws.

At the time of mailing the Circular or as soon as practicable thereafter, Ayr shall forward the Letter of Transmittal to registered 2024 Noteholders holding certificate(s) representing 2024 Notes in accordance with the Interim Order.

In the event any certificate which immediately prior to the Effective Time represented one or more 2024 Notes that were to be surrendered pursuant to Section 3.2, shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such certificate to be lost, stolen or destroyed, the Indenture Trustee may issue in exchange for such lost, stolen or destroyed certificate, a certificate or DRS Advice representing New 2026 Exchange Notes and the New Ayr Exchange Shares deliverable in accordance with such holder’s Letter of Transmittal. When authorizing such payment in exchange for any lost, stolen or destroyed certificate, the Person to whom any such certificate or DRS Advice is to be delivered shall as a condition precedent to the delivery of same, give a bond satisfactory to Ayr, the Applicant, the Indenture Trustee and the Transfer Agent in such sum as Ayr may direct, acting reasonably, or otherwise indemnify Ayr, the Applicant, the Indenture Trustee and the Transfer Agent in a manner satisfactory to Ayr against any claim that may be made against Ayr, the Applicant, the Indenture Trustee or the Transfer Agent with respect to the certificate alleged to have been lost, stolen or destroyed.

Other than as required by the Backstop Commitment Letter, the Applicant, Ayr, the Indenture Trustee, the Transfer Agent, the Warrant Agent and the Intermediaries shall be entitled to deduct and withhold from any consideration or other amount deliverable or otherwise payable to any Person hereunder such amounts as they may be required to deduct or withhold with respect to such payment under the Tax Act, U.S. Code, or any provision of any applicable federal, provincial, state, local or foreign tax law or treaty, in each case, as amended, provided that any such right to deduct or withhold shall not otherwise change or modify their obligations in respect of withholding taxes under the terms of the Existing Indenture or Amended and Restated Trust Indenture and any and all other documents. To the extent that Taxes or other amounts are so deducted or withheld, such deducted or withheld amounts shall be treated for all purposes hereof as having been paid to the relevant Person in respect of which such deduction and withholding was made. Such deducted or withheld amounts shall be remitted to the appropriate Governmental Entity.

ARTICLE 4
RELEASES

As of the Effective Date, each of the Released Parties shall be released and discharged from all actions, causes of action, damages, judgments, executions, obligations, liabilities and Claims of any kind or nature whatsoever arising on or prior to the Effective Date in connection with the 2024 Notes, the 2024 Notes Documents, New Ayr Exchange Shares, the Backstop Shares, the Anti-Dilutive Warrants, the Support Agreement, the Arrangement, the Plan, the CBCA Proceedings and any other proceedings commenced with respect to or in connection with the Plan, the transactions contemplated hereunder, and any other actions or matters related directly or indirectly to the foregoing (collectively, the “Released Claims”), provided that nothing in this paragraph shall release or discharge the following (collectively, the “Release Carve-Outs”): (i) any of the Released Parties from or in respect of their respective obligations under the Plan, the New 2026 Notes (including the Amended and Restated Trust Indenture and the other New 2026 Notes Documents solely as they relate to the New 2026 Notes), the New Guarantees, the Warrant Agency Agreement, the Anti-Dilutive Warrants, or any Order or document ancillary to any of the foregoing, (ii) any director or officer of Ayr or the Applicant or any other Ayr Entity of their right to indemnity, insurance claims, and employment related rights or claims, (iii) any inter-company obligations between or among Ayr, the Applicant or any other Ayr Entity on or before the Effective Date, or any 2024 Notes held by the Applicant thereafter, (iv) the Backstop Commitment Letter in the event that the Applicant does not receive subscription proceeds for the New 2026 Additional Notes in the aggregate amount of U.S.$40,000,000; (v) the Applicant’s right to seek repayment of the 2024 Notes solely as against Ayr and the Existing Guarantors (and, for greater certainty, such right to seek repayment shall not extend to the other Released Parties); or (vi) any act or omission arising out of any Released Party’s gross negligence, actual and intentional fraud, willful misconduct, or criminal acts (as determined by a final non-appealable order from a court of competent jurisdiction). The foregoing release shall not be construed to prohibit a party in interest from seeking to enforce the terms of this Plan or any contract or agreement entered into pursuant to, in connection with or contemplated by this Plan.

All Persons are permanently and forever barred, estopped, stayed and enjoined, on and after the Effective Date, with respect to any and all Released Claims, from: (i) commencing, conducting or continuing in any manner, directly or indirectly, any action, suits, demands or other proceedings of any nature or kind whatsoever of any Person against the Released Parties, as applicable; (ii) enforcing, levying, attaching, collecting or otherwise recovering or enforcing by any manner or means, directly or indirectly, any judgment, award, decree or order against the Released Parties; (iii) creating, perfecting, asserting or otherwise enforcing, directly or indirectly, any lien or encumbrance of any kind against the Released Parties or their property; or (iv) taking any actions to interfere with the implementation or consummation of this Plan or the transactions contemplated hereunder; provided, however, that the foregoing shall not apply to the enforcement of any obligations under this Plan or any document, instrument or agreement executed to implement this Plan or issue the New 2026 Notes, the New Ayr Shares, the Backstop Shares and/or the Anti-Dilutive Warrants.

ARTICLE 5
CONDITIONS PRECEDENT and ImPLEMENTATION

The implementation of this Plan and the occurrence of the Effective Date shall be conditional upon the fulfilment, satisfaction or waiver (to the extent permitted by Section 5.2) of the following conditions:

Ayr, the Applicant and the Requisite Supporting Senior Noteholders may at any time and from time to time jointly waive the fulfilment or satisfaction, in whole or in part, of the conditions set out in Section 5.1 to the extent and on such terms as they may agree, provided however that the condition set out in Section 5.1(a) cannot be waived.

This Plan shall become effective in the sequence described in Section 2.2 on the filing of the Articles of Arrangement and the issuance of the Certificate of Arrangement and shall, from and after the Effective Time, be binding on and enure to the benefit of the Persons described in Section 1.7, the Released Parties, and all other Persons named or referred to in, or subject to, this Plan and their respective successors and assigns and their respective heirs, executors, administrators and other legal representatives, and their respective successors and assigns. The Articles of Arrangement shall be filed and the Certificate of Arrangement shall be issued in each case with respect to the Arrangement in its entirety. The Certificate of Arrangement shall be conclusive evidence that the conditions in Section 5.1 have been satisfied or waived, the Arrangement has become effective and that each of the provisions in Section 2.2 has become effective in the sequence set forth therein. No portion of this Plan shall take effect with respect to any party or Person until the Effective Time.

If the Effective Date does not occur on or before the valid termination of the Support Agreement in accordance with its terms, unless Ayr, the Applicant and the Requisite Supporting Senior Noteholders agree in writing, then (a) this Plan shall be null and void in all respects; (b) any settlement or compromise embodied in this Plan, and any document or agreement executed pursuant to this Plan shall be deemed null and void; and (c) the obligations of Ayr and the Existing Guarantors with respect to the 2024 Notes, the 2024 Notes Documents and the 2024 Notes Claims shall remain unchanged and nothing contained in this Plan shall constitute or be deemed to constitute a waiver or release of any 2024 Notes Claims or otherwise.

ARTICLE 6
GENERAL

Notwithstanding anything to the contrary in this Plan and for the avoidance of doubt, nothing herein, including the issuance of the New 2026 Notes, shall modify or affect the agreements and terms set forth in the Subordination Agreements or release, discharge, or waive any Claims thereunder as against Subordinate Creditors. From and after the consummation of the transactions contemplated hereunder, including the issuance of the New 2026 Notes, the Subordination Agreements shall remain in full force and effect in accordance with their terms.

From and after the Effective Time, all Persons named or referred to in, or subject to, this Plan shall be deemed to have consented and agreed to all of the provisions of this Plan in its entirety. Without limiting the foregoing, from and after the Effective Time, all Persons shall be deemed to have:

For greater certainty, nothing in this Plan shall release or waive Claims in respect of the Release Carve-Outs.

The Applicant has the right to waive strict compliance with any election or other deadlines pursuant to this Plan (with the prior consent of the Requisite Supporting Senior Noteholders, which shall not be unreasonably withheld or delayed), and shall be entitled to waive any deficiencies with respect to any forms or other documentation submitted pursuant to this Plan.

From and after the Effective Date, any conflict between this Plan and the covenants, warranties, representations, terms, conditions, provisions or obligations, expressed or implied, of any contract, mortgage, security agreement, indenture, trust indenture, guarantee, subordination agreement, loan agreement, commitment letter, by-laws or other agreement, written or oral, and any and all amendments or supplements thereto existing between one or more of the 2024 Noteholders and any one or more of Ayr, the Applicant and/or the Existing Guarantors with respect to the 2024 Note Documents as at the Effective Date shall be deemed to be governed by the terms, conditions and provisions of this Plan and the Final Order, which shall take precedence and priority. In the event of any conflict between this Plan and the 2026 Notes Documents, the 2026 Notes Documents shall take precedence and priority.

In this Plan, the deeming provisions are not rebuttable and are conclusive and irrevocable.

Any notice or other communication to be delivered hereunder must be in writing and refer to this Plan and may, as hereinafter provided, be made or given by personal delivery, prepaid mail or email addressed to the respective parties as follows:

c/o Ayr Wellness Inc.

2601 South Bayshore Drive, Suite 900

Miami, Florida 33133

Attention: Chief Financial Officer

with a copy (which shall not be deemed notice) to:

Stikeman Elliott LLP

5300 Commerce Court West,
199 Bay Street
Toronto, Ontario M5L 1B9

Attention: Stikeman Elliott LLP
E-mail: SEProjectDior@stikeman.com

and

Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153

Attention: Ray C. Schrock, David J. Cohen and Merritt Johnson
E-mail: Ray.Schrock@weil.com; DavidJ.Cohen@weil.com; Merritt.Johnson@weil.com

Goodmans LLP

Bay Adelaide Centre - West Tower
333 Bay Street, Suite 3400
Toronto, ON  M5H 2S7

Attention: Brendan O’Neill and Bradley Wiffen

E-mail: boneill@goodmans.ca; bwiffen@goodmans.ca

and

Paul Hastings LLP
200 Park Avenue
New York, New York 10166

Attention: Erez Gilad and Alex Cota
E-mail: erezgilad@paulhastings.com; alexcota@paulhastings.com

Odyssey Trust Company

Stock Exchange Tower

1230 – 300 5th Avenue SW

Calgary AB T2P 3C4

Attn: Corporate Trust

or to such other address as any party above may from time to time notify the others in accordance with this Section 6.8. In the event of any strike, lock-out or other event which interrupts postal service in any part of Canada or the United States, all notices and communications during such interruption may only be given or made by personal delivery, courier or by email and any notice or other communication given or made by prepaid mail within the five (5) Business Day period immediately preceding the commencement of such interruption, unless actually received, shall be deemed not to have been given or made. Any such notices and communications so given or made, in the case of notice by way of personal delivery, courier or email, shall be deemed to have been given or made and to have been received on the day of delivery, couriering or of emailing, as applicable, if received on a Business Day before 5:00 p.m. (local time), or on the next following Business Day if received after 5:00 p.m. (local time) on a Business Day or at any time on a non-Business Day. Otherwise, such communication shall be deemed to have been given and made and to have been received on the fifth Business Day following the date on which such notice or other communication is mailed or couriered. The unintentional failure by the Applicant to give a notice contemplated hereunder to any particular 2024 Noteholder shall not invalidate this Plan or any action taken by any Person pursuant to this Plan.

For the purposes of this Plan, any matter requiring the agreement, waiver, consent or approval of the Supporting Senior Noteholders or Requisite Supporting Senior Noteholders shall be deemed to have been agreed to, waived, consented to or approved by the Supporting Senior Noteholders or Requisite Supporting Senior Noteholders, as applicable, if such matter is agreed to, waived, consented to or approved in writing (which can be by way e-mail) by any of the Supporting Senior Noteholders Advisors on behalf of the Supporting Senior Noteholders or the Requisite Supporting Senior Noteholders, as applicable, provided that such Supporting Senior Noteholders Advisors confirms in writing (which can be by way of e-mail) that it is providing such agreement, consent, waiver or approval on behalf of the Supporting Senior Noteholders or the Requisite Supporting Senior Noteholders, as applicable.

Notwithstanding that the transactions and events set out herein will occur and be deemed to occur in the order set out in this Plan without any further act or formality (except as provided herein), each of the Persons named or referred to in, affected by or subject to, this Plan will make, do and execute, or cause to be made, done and executed, all such further acts, deeds, agreements, transfers, assurances, instruments or documents as may reasonably be required by Ayr, the Applicant or the Requisite Supporting Senior Noteholders to carry out the full intent and meaning of this Plan and to give effect to the transactions contemplated herein.

APPENDIX C

FORM OF PROXY

APPENDIX D
NOTICE OF APPLICATION

	Court File No.:   ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST)

IN THE MATTER OF AN APPLICATION UNDER SECTION 192 OF THE CANADA BUSINESS CORPORATIONS ACT, R.S.C. 1985, C. C-44, AS AMENDED  

AND IN THE MATTER OF RULES 14.05(2) and 14.05(3) OF THE RULES OF CIVIL PROCEDURE

AND IN THE MATTER OF A PROPOSED ARRANGEMENT OF AYR WELLNESS CANADA HOLDINGS INC., AND INVOLVING AYR WELLNESS INC., 242 CANNABIS LLC, AYR OHIO LLC, AYR WELLNESS HOLDINGS LLC, AYR WELLNESS NJ LLC, BP SOLUTIONS LLC, CSAC ACQUISITION IL CORP., CSAC ACQUISITION NJ CORP., CSAC ACQUISITION NV CORP., CSAC ACQUISITION TX CORP., CSAC HOLDINGS INC., CULTIVAUNA, LLC, DFMMJ INVESTMENTS LLC, DWC INVESTMENTS, LLC, GREEN LIGHT HOLDINGS, LLC, GREEN LIGHT MANAGEMENT, LLC, HERBAL REMEDIES DISPENSARIES, LLC, KLYMB PROJECT MANAGEMENT, INC., KYND-STRAINZ LLC, LEMON AIDE LLC, LIVFREE WELLNESS LLC, PA NATURAL MEDICINE LLC, PARKER SOLUTIONS NJ, LLC, TAHOE CAPITAL COMPANY, TAHOE HYDROPONICS COMPANY, LLC, TAHOE-RENO BOTANICALS, LLC, TAHOE-RENO EXTRACTIONS, LLC, CSAC ACQUISITION FL CORP., CSAC ACQUISITION INC., CSAC ACQUISITION MA II CORP., AMETHYST HEALTH LLC, CANNTECH PA, LLC, CSAC ACQUISITION CONNECTICUT LLC, MERCER STRATEGIES PA, LLC, CSAC ACQUISITION PA CORP., CSAC ACQUISITION PA II CORP., DOCHOUSE, LLC, SIRA NATURALS, INC., ESKAR LLC AND AYR NJ LLC, CSAC OHIO, LLC, MERCER STRATEGIES FL, LLC, PARKER RE MA, LLC, PARKER RE PA, LLC, PARKER SOLUTIONS IL, LLC, PARKER SOLUTIONS OH, LLC, PARKER SOLUTIONS PA, LLC, PARKER SOLUTIONS FL, LLC, MERCER STRATEGIES MA, LLC, PARKER SOLUTIONS MA, LLC

AYR WELLNESS CANADA HOLDINGS INC.

Applicant

NOTICE OF APPLICATION

TO THE RESPONDENT

A LEGAL PROCEEDING HAS BEEN COMMENCED by the Applicant. The claim made by the Applicant appears on the following page.

THIS APPLICATION will come on for a hearing

by Zoom, on December 19, 2023, at 10:00 a.m.

IF YOU WISH TO OPPOSE THIS APPLICATION, to receive notice of any step in the application or to be served with any documents in the application, you or an Ontario lawyer acting for you must forthwith prepare a notice of appearance in Form 38A prescribed by the Rules of Civil Procedure, serve it on the Applicant’s lawyer or, where the Applicant does not have a lawyer, serve it on the Applicant, and file it, with proof of service, in this court office, and you or your lawyer must appear at the hearing.

IF YOU WISH TO PRESENT AFFIDAVIT OR OTHER DOCUMENTARY EVIDENCE TO THE COURT OR TO EXAMINE OR CROSS-EXAMINE WITNESSES ON THE APPLICATION, you or your lawyer must, in addition to serving your notice of appearance, serve a copy of the evidence on the Applicant’s lawyer or, where the Applicant does not have a lawyer, serve it on the Applicant, and file it, with proof of service, in the court office where the application is to be heard as soon as possible, but at least two days before the hearing.

IF YOU FAIL TO APPEAR AT THE HEARING, JUDGMENT MAY BE GIVEN IN YOUR ABSENCE AND WITHOUT FURTHER NOTICE TO YOU. IF YOU WISH TO OPPOSE THIS APPLICATION BUT ARE UNABLE TO PAY LEGAL FEES, LEGAL AID MAY BE AVAILABLE TO YOU BY CONTACTING A LOCAL LEGAL AID OFFICE.

APPLICATION

3.     THE FOLLOWING DOCUMENTARY EVIDENCE WILL BE USED AT THE HEARING OF THE APPLICATION:

APPENDIX E
INTERIM ORDER

Court File No.: CV-23-00709606-00CL

IN THE MATTER OF AN APPLICATION UNDER SECTION 192 OF THE CANADA BUSINESS CORPORATIONS ACT, R.S.C. 1985, C. C-44, AS AMENDED AND IN THE MATTER OF RULES 14.05(2) AND 14.05(3) OF THE RULES OF CIVIL PROCEDURE AND IN THE MATTER OF A PROPOSED ARRANGEMENT OF AYR WELLNESS CANADA HOLDINGS INC., AND INVOLVING AYR WELLNESS INC., 242 CANNABIS LLC, AYR OHIO LLC, AYR WELLNESS HOLDINGS LLC, AYR WELLNESS NJ LLC, BP SOLUTIONS LLC, CSAC ACQUISITION IL CORP., CSAC ACQUISITION NJ CORP., CSAC ACQUISITION NV CORP., CSAC ACQUISITION TX CORP., CSAC HOLDINGS INC., CULTIVAUNA, LLC, DFMMJ INVESTMENTS LLC, DWC INVESTMENTS, LLC, GREEN LIGHT HOLDINGS, LLC, GREEN LIGHT MANAGEMENT, LLC, HERBAL REMEDIES DISPENSARIES, LLC, KLYMB PROJECT MANAGEMENT, INC., KYND-STRAINZ LLC, LEMON AIDE LLC, LIVFREE WELLNESS LLC, PA NATURAL MEDICINE LLC, PARKER SOLUTIONS NJ, LLC, TAHOE CAPITAL COMPANY, TAHOE HYDROPONICS COMPANY, LLC, TAHOE-RENO BOTANICALS, LLC, TAHOE- RENO EXTRACTIONS, LLC, CSAC ACQUISITION FL CORP., CSAC ACQUISITION INC., CSAC ACQUISITION MA II CORP., AMETHYST HEALTH LLC, CANNTECH PA, LLC, CSAC ACQUISITION CONNECTICUT LLC, MERCER STRATEGIES PA, LLC, CSAC ACQUISITION PA CORP., CSAC ACQUISITION PA II CORP., DOCHOUSE, LLC, SIRA NATURALS, INC., ESKAR LLC AND AYR NJ LLC, CSAC OHIO, LLC, MERCER STRATEGIES FL, LLC, PARKER RE MA, LLC, PARKER RE PA, LLC, PARKER SOLUTIONS IL, LLC, PARKER SOLUTIONS OH, LLC, PARKER SOLUTIONS PA, LLC, PARKER SOLUTIONS FL, LLC, MERCER STRATEGIES MA, LLC, PARKER SOLUTIONS MA, LLC

INTERIM ORDER

THIS MOTION made by the Ayr Wellness Canada Holdings Inc. (the “Applicant” and together with Ayr Wellness Inc., “Ayr”) for an interim order (this “Interim Order”) in connection with an arrangement (the “Arrangement”) pursuant to section 192 of the Canada Business Corporations Act, R.S.C. 1985, c. C-44, as amended, (the “CBCA”) was heard this day by judicial videoconference via Zoom.

ON READING the Notice of Motion, the Notice of Application issued on November 14, 2023 and the affidavit of Brad Asher, sworn November 13, 2023, (the “Asher Affidavit”), including the Plan of Arrangement attached as Appendix B (as amended, restated, supplemented, the “Plan”) to the draft management information circular of Ayr (the “Information Circular”), which is attached as Exhibit A to the Asher Affidavit, and on hearing the submissions of counsel for Ayr and counsel for certain holders of the 12.5% senior notes due December 10, 2024 issued by Ayr Wellness Inc. (the “2024 Notes” and holders of such 2024 Notes, the “2024 Noteholders”) party to the Support Agreement dated October 31, 2023, including all schedules attached thereto (the “Support Agreement”) among Ayr, certain affiliates of Ayr, and the 2024 Noteholders party thereto (the “Supporting Senior Noteholders”), and on being advised that the Director appointed under the CBCA (the “Director”) does not consider it necessary to appear.

Definitions

1.            THIS COURT ORDERS that all definitions used in this Interim Order shall have the meanings ascribed thereto in the Information Circular or otherwise as specifically defined herein.

The Meeting

2.            THIS COURT ORDERS that Ayr is permitted to call, hold and conduct a special meeting (the “Meeting”) of the 2024 Noteholders to be held at the offices of Stikeman Elliott LLP at 5300 Commerce Court West; 199 Bay Street; Toronto Ontario M5L 1B9 on December 15, 2023 at 10:00 a.m. (Toronto time) for the 2024 Noteholders to consider and, if determined advisable, pass a special resolution authorizing, adopting and approving the Arrangement and the Plan (collectively, the “Arrangement Resolution”).

3.            THIS COURT ORDERS that the Meeting shall be called, held and conducted in accordance with the CBCA, the notice of meeting of 2024 Noteholders, which accompanies the Information Circular (the “Notice of Meeting”) and the trust indenture dated December 10, 2020 among Ayr and the indenture trustee, Odyssey Trust Company (the “Indenture Trustee”), as amended, restated, and/or supplemented (the “Existing Indenture”), subject to what may be provided hereafter and subject to further order of this court.

4.            THIS COURT ORDERS that the record date (the “Record Date”) for determination of the 2024 Noteholders entitled to notice of, and to vote at, the Meeting shall be 5:00 p.m. (Toronto time) on November 8, 2023.

5.            THIS COURT ORDERS that the only persons entitled to attend or speak at the Meeting shall be:

6.            THIS COURT ORDERS that Ayr may transact such other business at the Meeting as is contemplated in the Information Circular, or as may otherwise be properly before the Meeting.

Chair and Quorum

7.           THIS COURT ORDERS that any officer or director of Ayr may act as chair of the Meeting (the “Chair”).

8.            THIS COURT ORDERS that the Chair of the Meeting shall be determined by Ayr and that the quorum at the Meeting shall be not less than 25% of the principal amount of the 2024 Notes entitled to be voted at the Meeting by 2024 Noteholders, whether present in person or represented by proxy. If a quorum is not present at the Meeting, the Meeting may be adjourned to the second business day following the original scheduled date of the Meeting, at the same time and place, and no notice shall be required to be given in respect of such adjourned Meeting. At the adjourned Meeting, the 2024 Noteholders present in person or by proxy shall form a quorum.

Amendments to the Arrangement and Plan

9.            THIS COURT ORDERS that, subject to the terms of the Support Agreement, Ayr is authorized to make, subject to paragraph 10, such amendments, modifications or supplements to the Arrangement and the Plan as it may determine without any additional notice to the 2024 Noteholders or others entitled to receive notice under this Interim Order, provided that such amendments, modifications or supplements (a) are to correct clerical errors, (b) would not, if disclosed, reasonably be expected to affect a 2024 Noteholder’s voting decision in respect of the Arrangement Resolution, or (c) are authorized by subsequent order of the Court, and the Arrangement and Plan, as so amended, modified or supplemented, shall be the Arrangement and Plan to be submitted to the 2024 Noteholders at the Meeting and shall be the subject of the Arrangement Resolution. Amendments, modifications or supplements to the Arrangement or the Plan may be made following the Meeting, but shall be subject to the terms of the Support Agreement and the Plan and, if appropriate, further direction by this Court at the hearing for the final order approving the Arrangement (the “Final Order”).

10.            THIS COURT ORDERS that, if any amendments, modifications or supplements to the Arrangement or Plan are made after initial notice is provided as contemplated in paragraph 14 herein, and such amendments, modifications or supplements would, if disclosed, reasonably be expected to affect a 2024 Noteholder’s voting decision in respect of the Arrangement Resolution, notice of such amendment, modification or supplement shall be distributed, subject to further order of this Court, by press release, newspaper advertisement, prepaid ordinary mail, or by the method most reasonably practicable in the circumstances, as Ayr may determine.

Amendments to the Information Circular

11.            THIS COURT ORDERS that Ayr is authorized to make such amendments, revisions and/or supplements to the draft Information Circular as it may determine and the Information Circular, as so amended, revised and/or supplemented, shall be the Information Circular to be distributed in accordance with this Interim Order.

Adjournments and Postponements

12.            THIS COURT ORDERS that Ayr, if it deems advisable, is specifically authorized to adjourn or postpone the Meeting on one or more occasions, without the necessity of first convening the Meeting or first obtaining any vote of the 2024 Noteholders respecting the adjournment or postponement, and subject to paragraph 7, notice of any such adjournment or postponement shall be given by such method as Ayr may determine is appropriate in the circumstances.

13.            THIS COURT ORDERS that any adjournment or postponement of the Meeting shall not have the effect of modifying the Record Date for 2024 Noteholders entitled to receive notice of or to vote at the Meeting.

Notice of Meeting

14.           THIS COURT ORDERS that to effect notice of the Meeting, Ayr shall send, or cause to be sent, the Information Circular (including the Notice of Application and this Interim Order), the Notice of Meeting, the form of proxy and the letter of transmittal, along with such amendments or additional documents as Ayr may determine are necessary or desirable and are not inconsistent with the terms of this Interim Order (collectively, the “Meeting Materials”), as follows:

and that compliance with this paragraph shall constitute sufficient notice of the Meeting.

15.            THIS COURT ORDERS that Ayr is hereby directed to provide notice to the Ayr Shareholders and Ayr Exchangeable Shareholders and beneficial holders of SVS Shares by (a) posting on SEDAR+ the Notice of Application and this Interim Order (collectively, the “Court Materials”) and the letter to Ayr Shareholders and Ayr Exchangeable Shareholders in substantially the form attached as Exhibit “G” to the Asher Affidavit (the “Shareholder Letter”); (b) issuing a press release in respect of obtaining this Interim Order and the hearing to obtain the Final Order; and (c) distributing the Shareholder Letter to them by any method permitted under paragraph 14 of this Interim Order, as soon as reasonably practicable following the distribution of the Meeting Materials.

16.            THIS COURT ORDERS that accidental failure or omission by Ayr, the Indenture Trustee, CDS, Intermediaries or other applicable agents to give notice of the meeting or to distribute the Meeting Materials to any person entitled by this Interim Order to receive notice, or any failure or omission to give such notice as a result of events beyond the reasonable control of Ayr, or the non-receipt of such notice, shall not constitute a breach of this Interim Order nor shall it invalidate any resolution passed or proceedings taken at the Meeting. If any such failure or omission is brought to the attention of Ayr, it shall use its best efforts to rectify it by the method and in the time most reasonably practicable in the circumstances.

17.            THIS COURT ORDERS that, subject to the terms of the Support Agreement, Ayr is hereby authorized to make such amendments, revisions or supplements to the Meeting Materials and Court Materials as Ayr may determine (“Additional Information”), and that notice of such Additional Information may, subject to paragraph 10, above, be distributed by press release, newspaper advertisement, pre-paid ordinary mail, or by the method most reasonably practicable in the circumstances, as Ayr may determine.

18.            THIS COURT ORDERS that distribution of the Meeting Materials, Court Materials and Shareholder Letter pursuant to paragraphs 14 and 15 of this Interim Order shall constitute notice of the Meeting and good and sufficient service of the within Application upon the persons described in paragraphs 14 and 15 and that those persons are bound by any orders made on the within Application. Further, no other form of service of the Meeting Materials, Court Materials or Shareholder Letter or any portion thereof need be made, or notice given or other material served in respect of these proceedings and/or the Meeting to such persons or to any other persons, except to the extent required by paragraph 10 above.

Solicitation and Revocation of Proxies

19.            THIS COURT ORDERS that Ayr is authorized to use the proxies substantially in the form of the drafts accompanying the Information Circular, with such amendments and additional information as Ayr may determine are necessary or desirable. Ayr is authorized, at its expense, to solicit proxies, directly or through its officers, directors or employees, and through such agents or representatives as they may retain for that purpose, and by mail or such other forms of personal or electronic communication as it may determine.

20.            THIS COURT ORDERS that in order to cast a vote at the Meeting, a beneficial holder of 2024 Notes must submit its voting instructions to its Intermediary in accordance with instructions provided by the Intermediary such that proxies are received at or prior to 5:00 pm (Toronto time) on December 13, 2023 or, in the event that the Meeting is adjourned or postponed, not later than 5:00 p.m. (Toronto time) on the second business day before the date of any adjournment or postponement of the Meeting (the “Voting Deadline”). Beneficial holders of 2024 Notes shall be entitled to revoke their voting instructions in accordance with the instructions provided by their Intermediary, provided all revocations of proxies shall be received by the Voting Deadline.

21.            THIS COURT ORDERS, subject to the terms of the Support Agreement, Ayr may waive or extend the time limits set out herein or in the Information Circular for the deposit or revocation of voting instructions (including, without limitation, the Voting Deadline) with the consent of the Requisite Supporting Senior Noteholders, not to be unreasonably withheld.

Voting

22.            THIS COURT ORDERS that the only persons entitled to vote in person or by proxy on the Arrangement Resolution, or such other business as may be properly brought before the Meeting, shall be those 2024 Noteholders who hold Notes as of the close of business on the Record Date. Illegible votes, spoiled votes, defective votes and abstentions shall be deemed to be votes not cast. Proxies solicited by Ayr that are properly signed and dated but which do not contain voting instructions shall be voted in favour of the Arrangement Resolution.

23.            THIS COURT ORDERS that votes shall be taken at the Meeting on the basis of one vote per U.S.$1.00 of principal amount of 2024 Notes held by the applicable 2024 Noteholder as of the Record Date. In order for the Arrangement Resolution to have been considered to have been approved at the Meeting, the Arrangement Resolution must be passed at the Meeting by an affirmative vote of at least two-thirds (66 2∕3%) in value of the votes cast in respect of the Arrangement Resolution at the Meeting, in person or by proxy, by the 2024 Noteholders. Such votes shall be sufficient to authorize Ayr to do all such acts and things as may be necessary or desirable to give effect to the Arrangement and the Plan on a basis consistent with what is provided for in the Information Circular without the necessity of any further approval by the 2024 Noteholders, subject only to the granting of the Final Order by the Court and the satisfaction or waiver of the conditions to the Plan pursuant to its terms.

24.            THIS COURT ORDERS that in respect of matters properly brought before the Meeting pertaining to items of business affecting Ayr (other than in respect of the Arrangement Resolution), each Noteholder is entitled to one vote for each U.S.$1.00 of principal amount of 2024 Notes held by such 2024 Noteholder as of the Record Date.

Hearing of Application for Approval of the Arrangement

25.            THIS COURT ORDERS that, upon and subject to approval of the Arrangement Resolution at the Meeting in the manner set forth in this Interim Order, Ayr may apply to this Court for the Final Order.

26.            THIS COURT ORDERS that distribution of the Notice of Application, the Interim Order in the Information Circular, and the Shareholder Letter, when sent in accordance with this Interim Order, shall constitute good and sufficient service of the Notice of Application, this Interim Order and the Final Order to be sought by Ayr, and no other form of service need be effected and no other material need be served unless a Notice of Appearance is served in accordance with paragraph 27.

27.            THIS COURT ORDERS that any Notice of Appearance served in response to the Notice of Application shall be served on the solicitors for Ayr, with a copy to counsel for the Supporting Senior Noteholders, as soon as reasonably practicable and, in any event, no less than two days before the hearing of this Application at the following addresses:

28.            THIS COURT ORDERS that, subject to further order of this Court, the only persons entitled to appear and be heard at the hearing of the within application shall be:

29.            THIS COURT ORDERS that any materials to be filed by Ayr in support of the within Application for final approval of the Arrangement may be filed up to one (1) day prior to the hearing of the Application without further order of this Court.

30.            THIS COURT ORDERS that in the event the Application for the Final Order does not proceed on the date set forth in the Notice of Application, and is adjourned, only those persons who served and filed a Notice of Appearance in accordance with paragraph 27 shall be entitled to be given notice of the adjourned date.

Service and Notice

31.            THIS COURT ORDERS that the Applicant and its counsel are at liberty to serve or distribute this Order and any other materials and orders as may be reasonably required in these proceedings, including any notices, or other correspondence, by forwarding true copies thereof by electronic message to interested parties and their advisors. For greater certainty, any such distribution or service shall be deemed to be in satisfaction of a legal or juridical obligation, and notice requirements within the meaning of clause 3(c) of the Electronic Commerce Protection Regulations, Reg. 81000-2-175 (SOR/DORS).

Stay of Proceedings

32.            THIS COURT ORDERS from 12:01 a.m. (Toronto time) on the date of this Interim Order until the earlier of (i) the effective time of the Arrangement, and (ii) further order of this Court, no right, remedy or proceeding, including, without limitation, any right to terminate, demand, accelerate, set off, amend, declare in default or take any other action under or in connection with any loan, note, commitment, indenture, instrument, contract, licence, permit or other agreement of any kind of nature whatsoever, whether written or oral (an “Agreement”), at law or under contract, may be exercised, commenced or proceeded with by: (i) any 2024 Noteholder; (ii) the Indenture Trustee, or (iii) any other person party to or a beneficiary of any Agreement with Ayr or any subsidiary or affiliate of Ayr (each a “Ayr Entity” and collectively, the “Ayr Entities”), against or in respect of the Ayr Entities or any of the present or future property, assets, rights or undertakings of the Ayr Entities, of any nature and wherever located, by reason or as a result of:

(collectively, the “Specified Events”), in each case except with the prior written consent of Ayr or leave of this Court, provided that, for greater certainty, nothing in this Interim Order shall operate to stay the Indenture Trustee or the 2024 Noteholders from exercising any rights or remedies against Ayr or any other Ayr Entity as a result of the occurrence of a default or event of default, other than the Specified Events, under the Existing Indenture or any related guarantee or security document.

Precedence

33.            THIS COURT ORDERS that, to the extent of any inconsistency or discrepancy between this Interim Order and the terms of any instrument creating, governing or collateral to the 2024 Notes, the CBCA, the articles of incorporation, by-laws or other constating documents of Ayr, this Interim Order shall govern.

Extra-Territorial Assistance

34.            THIS COURT HEREBY REQUESTS the aid and recognition of any court, tribunal, regulatory or administrative body having jurisdiction in Canada, the United States, or any other foreign jurisdiction, to give effect to this Interim Order and to act in aid of and to assist this Court and Ayr and its respective agents in carrying out the terms of this Interim Order. All courts, tribunals, regulatory and administrative bodies are hereby respectfully requested to make such orders and to provide such assistance to Ayr as may be necessary or desirable to give effect to this Interim Order, to grant representative status to Ayr in any foreign proceeding, or to assist Ayr and its respective agents in carrying out the terms of this Interim Order.

Indenture Trustee

35.            THIS COURT ORDERS that the Indenture Trustee is authorized and directed to take all such actions as set out in this Interim Order and the Indenture Trustee shall not incur any liability as a result of carrying out or observing the provisions of this Interim Order or the Existing Indenture or the taking of any action incidental hereto, save and except for any gross negligence or wilful misconduct on its part.

Variance

36.            THIS COURT ORDERS that Ayr shall be entitled to seek leave to vary this Interim Order upon such terms and upon the giving of such notice as this Court may direct.

APPENDIX F

FAIRNESS OPINION

KOGER VALUATIONS INC.

Business Valuation and

Litigation Support

45 Coalport Dr.

Toronto, Ontario

M1N 4B5

Bus/Fax 416-690-7717

Res. 416-694-4633

email: tkvaluator@aol.com

PRIVATE & CONFIDENTIAL

October 31, 2023

The Special Committee of the Board of Directors

-and-

The Board of Directors

of

Ayr Wellness Inc.

Dear Sirs / Mesdames:

Ayr Wellness Inc. (‘Ayr’), acting though a Special Committee of the Board of Directors of Ayr (the ‘Special Committee’), retained Koger to provide an opinion as to the fairness from a financial point of view (the ‘Fairness Opinion’) of the proposed Transaction. This Fairness Opinion has been prepared in accordance with the standards of the Canadian Institute of Chartered Business Valuators and was presented to the Special Committee.

All amounts in this fairness opinion are in US dollars unless indicated otherwise.

CREDENTIALS OF KOGER

Koger is a business valuation firm in its thirty-third year of operation. The firm has broad based experience in providing valuations fairness opinions and other services to both private and public companies operating in a variety of different industries.

ENGAGEMENT OF KOGER BY THE SPECIAL COMMITTEE

The Special Committee formally retained Koger by letter dated May 10, 2023, to provide this Fairness Opinion. Pursuant to the terms of this engagement Ayr has agreed to pay Koger a fee based on estimated hours for providing this Fairness Opinion. No portion of the fee payable to Koger is contingent on the completion of the Exchange Transaction or on the conclusions reached herein.

Koger consents to providing this Fairness Opinion in its entirety to shareholders of Ayr, holders of the Senior Notes, to the courts and to regulatory authorities in connection with the Exchange Transaction, which will be accomplished by including the Fairness Opinion in the Circular.

INDEPENDENCE OF KOGER

The analyses and research used in preparing the Fairness Opinion were carried out solely by Thomas A. Koger, the President of Koger, as an independent and neutral expert. No one has put any restriction on the scope of his work, opinion or conclusions. We, and Mr. Koger in his personal capacity, also confirm that we are independent for the purposes of this engagement and, without limiting the foregoing, have no financial interest or future expected financial interest in any entity involved in the Exchange Transaction.

AYR

Ayr is listed is listed on the CNSX as a publicly traded Canadian company. It has a market capitalization (undiluted) of just over $CDN100 million as of the date hereof. The headquarters of the Company is located in Miami, Florida.

The Exchange Transaction is Ayr’s latest move to address debt issues. Earlier in 2023 the Company contingently deferred paying $69 million in debt obligations.

TERMS OF THE EXCHANGE TRANSACTION

The old 12.5% Senior Notes will be swapped for 13% New Senior Notes with the same principal amount, namely $243 million, with a target closing date of December 31, 2023. The additional terms of the Exchange Transaction are as follows:

In conjunction with the Exchange Transaction the May 2019 LivFree Wellness promissory note is being amended. It was originally issued for $20 million with maturity in five years. Under the amendment Ayr will make a $3 million principal repayment and defer the remaining $17 million of principal and $5 million of accrued paid-in-kind interest until May 2026. The interest rate on the LivFree note will be increased from 6% to 10% annually and converted from paid-in-kind interest to monthly cash interest.

With the Exchange Transaction, Ayr will extend approximately $82 million of debt obligations in total (inclusive of the LiveFree note amendment) under the seller notes for two (2) years as well.

SCOPE OF REVIEW

Prior to preparing our Fairness Opinion we reviewed the terms of the Exchange Transaction. We subsequently met with the Special Committee and assessed, among other things, whether the terms of the Exchange Transaction are fair from a financial point of view to the shareholders of Ayr and the holders of Senior Notes. In carrying out this assignment, among other things, we were provided with all documents we requested which was supplemented with additional research on Ayr and the Cannabis Industry. We reviewed and relied on the following information (among other items):

QUALIFICATIONS AND RESTRICTIONS

Koger understands that the Fairness Opinion will be contained in the Circular being sent to the holders of the Senior Notes of Ayr. We do not assume any responsibility to the parties to the Exchange Transaction or to third parties if this Fairness Opinion is used in ways other than for its intended purpose. We reserve the right (but will be under no obligation) to review our Fairness Opinion in the light of any new facts, trends, or changing conditions subsequently brought to our attention and which may have existed at the date of this Fairness Opinion.

ASSUMPTIONS

In preparing this Fairness Opinion, we have assumed that all the information supplied to us by the management of Ayr is accurate and complete. We have further assumed that all significant factors, contracts or agreements in effect at the date hereof that would have an impact as to the conclusions arrived at in this report have been disclosed to us and there are no material undisclosed liabilities. We have further assumed that all licenses, consents and required authorizations to complete the Exchange Transaction will be obtained and that all existing licenses are in force for Ayr. We have also assumed that Ayr does not have any material contingent liabilities other than those disclosed in its financial statements and/or by management and that no undisclosed material litigation is pending or threatened which may have an impact on this Fairness Opinion.

APPROACH TO FAIRNESS