The iconic cannabis brand, High Times, has been acquired by psychotropic innovator Lucy Scientific.
After being a leading voice for cannabis across the globe for nearly 50 years, Lucy Scientific will be acquiring the High Times brand along with its Cannabis Cup and 420.com brands.
High Times was founded 46 years ago, beginning as a counterculture lifestyle publication. Since evolving into a network of cannabis dispensaries, the brand is now also host and creator of events like the Cannabis Cup, and produces globally distributed merchandise.
The brand began acquiring retail dispensaries in 2020, and now owns eight retail stores, as well as several cannabis brands.
Described as a move to increase value for shareholders and drive high-margin revenue quickly, the all-stock transaction will see Lucy Scientific license the right to operate retail stores, as well as manufacture and sell THC products in the United States, back to High Times in return for a license fee of $1.0 million per year.
This will increase to $2 million per year following Federal legalisation.
CEO and Executive Chairman at Lucy Scientific Discovery Inc., Richard Nanula, stated: “Lucy expects this acquisition to drive high-margin revenue quickly and sustainably across the cannabis sector around the world. This is a great opportunity to grow the market presence of the nearly 50-year-old High Times brand globally through licensing and online distribution.
“We are confident that this opportunity can add significant value for our shareholders.”
Lucy will also issue 19.9% of its outstanding stock to High Times and make payments semi-annually for the next five years based on EBITDA generated from the acquired IP, which can be settled with either stock or cash at Lucy’s option.
The company has also stated it plans to monetise High Times’ IP through current and planned royalty agreements by further extending and enhancing the existing domestic and international licensing arrangements currently held by High Times, including consumer products and merchandise. The Company intends to preserve the essence of the High Times, Cannabis Cup, and 420.com brands while identifying new avenues for growth and development.
CEO of High Times, Adam Levin, added: “Over the past few years, we have been building the consumer products offerings for High Times and there is no better partner than Lucy to drive our iconic brand forward.
“This transaction will open up tremendous new opportunities to grow and expand the High Times brand led by Richard Nanula, who has decades of experience with some of the biggest consumer brands and companies in the world.
“We are delighted to become large Lucy shareholders.”
In an interview with Forbes, Levin explained that, as plant-touching cannabis businesses are currently unable to list on a U.S. Exchange, the acquisition was the “only viable solution to provide a true liquidity option to High Times shareholders.”
The Company expects the acquisition of High Times IP, including, the 18 licensing agreements across various product categories it will acquire, to add at least $10M of revenue and $5M of EBITDA to its 2024 results and provide a solid foundation of growth as cannabis becomes legal around the world.