Lucy Scientific Discovery, a psychotropic innovator, yesterday announced the acquisition of the intellectual property (IP) of High Times, one of the most recognizable and iconic brands in the cannabis industry.
The acquisition provides a stream of high-margin licensing and royalty income from the well-regarded High Times, Cannabis Cup and 420.com brands, including the respective domain names.
Lucy will 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.
Additionally, Lucy will license the right to operate retail stores and manufacture and sell THC products in the United States back to High Times, in return for a license fee of $1 million per year, increasing to $2 million per year upon Federal legalization.
The transaction is subject to customary closing conditions and is expected to close within two weeks.
Lucy will be acquiring brand rights with plans to monetize the 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.
Lucy expects the acquisition of High Times IP, including the 18 licensing agreements across various product categories it will acquire, to add at least $10 million of revenue and $5 million of EBITDA to its 2024 results and provide a solid foundation of growth as cannabis becomes legal around the world.
Lucy is a Nasdaq-listed company with holdings and operations in a variety of psychotropic businesses.
High Times was founded 46 years ago and has grown to be one of the world’s most well-known cannabis brands. From humble beginnings as a counterculture lifestyle publication, High Times has evolved into growing a network of cannabis dispensaries and the creator of events like the Cannabis Cup.
In 2020, High Times began acquiring retail dispensaries, for the first time directly touching the plant. The brand owns eight retail stores, as well as several cannabis brands.