Interesting news. Lucy Scientific Discovery Inc, a Canadian psychotropic company, is acquiring iconic cannabis brand High Times’ intellectual property. Also included in this deal are existing licensing agreements for the brand High Times and the event Cannabis Cup, which includes their respective domain names.
However, this is not a full-on acquisition as High Times itself will retain cannabis production, sales and retail.
According to terms of the agreement, Lucy will license the right to operate retail stores as well as manufacture and sell THC products in the U.S. back to High Times, in return for a license fee of $1 million per year. This sum will increase to $2 million per year upon federal legalization.
Also, Lucy will issue 19.9% of its outstanding stock to High Times and make semi-annual payments for the next five years based on EBITDA generated from the acquired IP.
The transaction is expected to close within two weeks.
Adam Levin, CEO of High Times, expressed considerable enthusiasm over the transaction, especially the part involving Lucy stock being issued to High Times shareholders.
“As plant touching can’t list on a U.S. Exchange today , this was the only viable solution to provide a true liquidity option to High Times shareholders,” he said. “Being compliant in a still prohibitive environment is a moving target, but it’s something we take seriously. Legislation today requires segmentation even interstate, let alone internationally, so this took more work than it would have if we sold tomatoes, for example. That said, we believe based on the way we’ve structured this agreement that we will maximize value for both organizations shareholders.”
Although the brand has a new owner, the company expressly does not, underscored Levin.
“In the short term, High Times looks forward to launching new products and events across the globe, but long term our goal is and has always been to be the undisputed leader in the cannabis world,” he said. “We’ve got a good head start, with decades on our nearest competitor, but a new world of opportunities open every time a new country comes online, and we’re excited to capitalize on all of those opportunities.”
Founded in 1974, High Times has become one of the world’s most well-known cannabis brands.
In 2020, High Times began acquiring retail dispensaries. Today the brand owns eight retail stores, as well as several cannabis brands.