Hightimes Holding Corp. Revises Dispensary Purchase Agreement with Harvest Health & Recreation
Hightimes Holding Corp., owner of popular pot publication High Times magazine, has amended a previously announced deal with Harvest Health & Recreation that includes the ownership transfer of several California cannabis dispensaries.
Under the new agreement, Hightimes will acquire 10 operational and planned marijuana retail locations from the Arizona-based multi-state operator in a deal now valued at $67.5 million.
Hightimes had previously agreed to an $80 million cash-and-stock deal for 13 dispensaries and negotiated the option to acquire two additional locations. In exchange, Harvest Health would have received $5 million in cash, a $7.5 million promissory note with 10% interest, and $67.5 million in series A preferred stock from Hightimes.
Now, Hightimes will pay Harvest Health $1.5 million in cash, and transfer $61.5 million in series A preferred shares. The Los Angeles-based media company, which is in the midst of pivoting to a plant-touching business model, has also agreed to issue a $4.5 million promissory note with 10% interest.
“We’re extremely excited to plan to close this deal and take over what will be one of many High Times branded dispensaries,” Hightimes executive chairperson Adam Levin said via a news release. “This, coupled with our upcoming delivery launch next month, positions our company to thrive even during this tumultuous time.”
In a separate release, Harvest said it would retain four operating California dispensaries, located in Grover Beach, Napa, Palm Springs, and Venice.
The company also said it would “select licenses for potential retail locations in California following completion of this planned divestment.”
The updated deal with Harvest comes just days after Hightimes announced it would spend a combined $500,000 and trade 15 million shares of common stock for two cannabis stores in Northern California.
It also follows the closing of a nearly $26 million transaction with Red White & Bloom Brands (RWB).
Under the terms of that deal, RWB will turn 18 planned and operational marijuana dispensaries throughout Michigan (where it controls 22% of the cannabis retail market), Illinois and Florida into High Times stores. It will also commercialize High Times-branded cannabis products in those three states, and CBD products throughout the U.S.
In exchange, Hightimes will receive $15 million worth of RWB shares and a minimum cash royalty payment of $10.75 million during the first 18 months of the arrangement.
The moves in the Midwest and California are aimed at repositioning the popular pot publication as a trusted producer and seller of branded cannabis products.
Hightimes is currently trying to raise $50 million from both accredited and non-accredited investors via a regulation A+ IPO campaign that’s been active for nearly two years. As of May 7, the company had raised more than $20 million from upwards of 30,000 backers.
The crowdfunding campaign is slated to end on June 30, 2020, however Hightimes has already extended the multiple times.