Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Climate change impacting economic factors such as prices and supply chain disruption, as well as governmental response through laws or regulations regarding greenhouse gas emissions
• Uncertainty regarding the application of U.S. state and federal law to U.S. cannabis products and the scope of any regulations by the U.S. Food and Drug Administration, the U.S. Drug Enforcement Administration, the U.S. Federal Trade Commission, the U.S. Patent and Trademark Office, the U.S. Department of Agriculture and any state equivalent regulatory agencies over U.S. cannabis products
• Risks related to the Company’s cash flows from operations
• Risks related to limited market data and difficulty to forecast results
• The risk of natural hazards related to severe and extreme weather and climate events
• Product liability claims related to the products the Company cultivates, produces, and sells
• The risk of significant pricing pressures which are often market specific and can be caused by an oversupply of cannabis in the market and may be transitory from period to period

Mitigation Strategies

• Strengthened its controls over Information Technology General Controls by (i) enhancing logical access and change management policies (ii) implemented processes to capture evidence of documentation on the execution of logical access and change management policies and (iii) designed a process to review users who have access to key financial systems

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• extreme weather and climate events

Transition Risks

• regulatory changes

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Climate change impacting economic factors such as prices and supply chain disruption, as well as governmental response through laws or regulations regarding greenhouse gas emissions
• Restricted access to banking in the United States and Canada due to the illegality of cannabis under federal law.
• Intense competition in the cannabis industry from larger and better-financed competitors.
• Negative publicity or consumer perception affecting business success.
• Regulatory scrutiny of Ayr’s industry negatively impacting its ability to raise additional capital.
• Difficulties in attracting and retaining personnel.
• Risks related to maintaining cash deposits in excess of federally insured limits.
• Vulnerability to currency exchange fluctuations.
• Exposure to changes in interest rates and high levels of inflation.
• Significant environmental regulations and risks.
• Adverse effects of climate change and climate change regulations.
• Risks associated with fraudulent or illegal activity by employees, contractors, and consultants.
• Risks related to information technology systems, including cyber-attacks and security breaches.
• Risks related to violations of corruption and anti-bribery laws.
• High bonding and insurance coverage requirements.
• Transportation risks.
• Vulnerability to rising energy costs.
• Risks inherent in the agricultural sector, including product contamination.
• Difficulties in managing growth.
• Risks associated with leverage.
• Co-investment risk in terms of control over Ayr’s investments.
• Reliance on service agreements that could adversely affect prospects and results.
• Liabilities arising from Ayr’s website accessibility.
• Costs of being a public company.
• Limited remedies for errors or omissions by the Board and officers.
• Difficulty enforcing judgments and effecting service of process on directors and officers.

Mitigation Strategies

• Implementing regular compliance reviews to ensure compliance with applicable State and local cannabis rules and regulations.
• Addressing debt maturity profile through debt restructuring.
• Continued cost-savings and efficiency optimization efforts.
• Utilizing future proceeds from an employee retention credit.
• Seeking to take advantage of future potential financing opportunities.
• Maintaining insurance to protect against certain risks.
• Implementing and improving operational and financial systems.
• Expanding, training, and managing its employee base.
• Implementing a cross-functional approach to assessing, identifying and managing material cybersecurity threats and incidents.
• Implementing technical safeguards to protect information systems.
• Establishing and maintaining incident response, business continuity, and disaster recovery plans.
• Maintaining a risk-based approach to managing cybersecurity threats from third parties.
• Providing mandatory training for all employees regarding cybersecurity threats.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• extreme weather
• storms
• hurricanes
• floods
• droughts

Transition Risks

• environmental taxes
• charges
• regulatory schemes
• assessments
• penalties