Hightimes Holding Corp. to Buy 2 California Dispensaries, License Name to Red, White & Bloom Brands
Hightimes Holding Corp., which owns the popular High Times Magazine founded in 1974, has negotiated a pair of deals that advance the company’s pivot toward a plant-touching business model.
On Tuesday, the California-based cannabis company said it would acquire two marijuana dispensaries in the Golden State for a combined $500,000 in cash and 15 million shares of Hightimes common stock.
That announcement came just days after Hightimes and Toronto-based Red, White & Bloom Brands (RWB) revealed a nearly $26 million licensing arrangement that will include the rebranding of several recreational and medical marijuana dispensaries in three states.
Under the terms of the deal with RWB, 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.
In exchange, RWB will turn 18 planned and operational retail locations throughout Michigan (where it controls 22% of the cannabis retail market), Illinois and Florida into High Times stores. The company was also granted the ability to commercialize High Times-branded cannabis products in those three states, and CBD products throughout the U.S.
In a news release, recently appointed Hightimes CEO Peter Horvath pointed to the brand’s immense amount of recognition and credibility across the world” as a key component of the deal.
“Licensing the High Times name, advising on dispensary operations, and providing input on product development allows the company to drive significant revenue from licensing fees without assuming the complexity associated with owning and operating dispensaries and scaled cultivation and manufacturing facilities nationwide,” he said.
For his part, RWB chairperson and CEO Brad Rogers called the partnership with Hightimes a “real honor” and said his company would use licensing arrangements to push the company forward.
“We will look to leverage this and other licensing partnerships to support our existing retail and cultivation dominance as well as further foundationalize our positioning for future plans,” he said.
RWB has 660 employees and currently operates 468,000 sq. ft. of cannabis cultivation. It has plans to add another 1.4 million sq. ft. of cannabis cultivation and owns the world’s largest indoor CBD cultivation site – a 3.6 million sq. ft. operation in Illinois.
Elsewhere, Hightimes struck smaller deals with Northern California dispensary operators J@G Enterprises, Inc. – which does business as Synergy -- and 530 Collective. The two stores are located in Redding and Shasta Lake, respectively, and will add a combined $10 million in annual revenue to the Hightimes business.
Both transactions are expected to close in the next 60 days.
“Effective market penetration in the world’s largest cannabis market, California, has been a core focus for us since we’ve announced our plant-touching plans,” Hightimes executive chairperson Adam Levin said via a release. “The acquisition of these stores will provide us with not only greater coverage area within the state, but with a well-oiled machine to grow as we expand our operations.”
The transactions with RWB, 530 Collective and Synergy come about six weeks after Hightimes said it would acquire more than a dozen planned and operational California dispensaries from Arizona-based Harvest Health & Recreation in a cash-and-stock deal valued at $80 million.
That deal is expected to close this month.
Last month, Hightimes’ proposed acquisition of California-based cannabis cultivator Humboldt Heritage was mutually terminated.
Links to news releases and public filings containing additional information can be found below.