Getting higher in the cannabis industry is starting to look a lot like getting rich.
High Times, founded in 1974 as HIGH TIMES® magazine, was acquired earlier this year by an investor group led by Adam Levin. Now called High Times Holding Corp, Levin’s new firm, Oreva Capital, partnered with Damian Marley’s newly-public company Stony Hill, Ean Seeb, the founder of Denver Relief Consulting, a Colorado dispensary, and 17 other partners.
Levin’s group acquired a 60% controlling stake which valued the company at about $70 million. Once Oreva Capital, a special purpose acquisition company (SPAC), completes the merger transition that will result in High Times becoming a public company, the entity will have a valuation of $250m and a “milti-platform business model,” according to SEC filings.
As a side note, it’s going to be interesting to see where Rolling Stones trades. The owners/founders of the iconic music and culture media company has announced plans to sell the brand. Like two ocean lines passing in the night, will High Times’ tailwinds propel it to a higher valuation than Rolling Stone?
In a press release from July 27, 2017, Oreva stated it will, “utilize its public company status, diversified revenue streams, established and trusted brand name, and deep grassroots following to capitalize on the ongoing, orderly conversion of the U.S. marijuana black market to a legal and regulated national industry.”
“This is a market that is growing at a 27 percent annual growth rate,” said Troy Dayton, chief executive officer of the Arcview Group, a cannabis investment and research firm. The market is expected to exceed $22.6 billion in revenue in 2021, up from $6.7 billion in 2016, according to Arcview.
High Times Business Overview (according to the company)
High Times is a diversified media, information services and live entertainment company focused on creating and distributing authoritative and engaging cannabis-related content. High Times is an iconic culture brand encompassing a venerated magazine, a website that is a cultural and e-commerce destination, as well as a respected news outlet, mobile applications and well-attended Cannabis Cup trade shows. High Times was founded in 1974 as a magazine and recently celebrated its 500th print issue. High Times’ expanding product and licensing deals will allow it to translate viewer passion into product sales with real-time transactions fueling fan engagement.
Moreover, the ever-growing list of states legalizing the use of marijuana for medicinal and recreational purposes has increased demand for educational and social events such as High Times’ Cannabis Cup events. Historically, High Times has been under-capitalized and unable to take advantage of broad opportunities in cannabis-related digital media, e-commerce, branding and licensing. However, in 2017 Oreva Capital, which is led by Adam Levin, gained control of High Times and began to position the company to better capitalize on its robust future growth. We believe that the merger with Origo will substantially improve High Times’ balance sheet and provide additional future growth capital. High Times operates through three primary segments, each of which is expected to achieve revenue growth in 2017. Events: large-scale festivals and tradeshows targeting consumers and businesses in the cannabis space.
High Times hosts multiple events on an annual basis throughout the U.S. where cannabis is legal. Cannabis Cup is a large-scale music and product festival with judged product competitions, the winners of which are awarded a Cannabis Cup, a coveted award in the cannabis industry. Additionally, High Times organizes other events such as concerts, trade shows and cruises. As legalization continues to open new, larger and expanded markets for Cannabis Cup, management is planning select, larger-scale events in new and existing geographies. Licensing: branded content, merchandise and apparel utilizing High Times’ recognizable IP.
Current opportunities involve broader media projects outside of High Times’ traditional media space, clothing and branded accessories and cannabis-related accessories. Media: print and digital/social. Print: as High Times’ initial product offering in 1974, the High Times Magazine has become the definitive resource for all things cannabis, from cultivation and legalization to entertainment and culture. Currently, High Times generates print media revenue through subscriptions, newsstand purchases and ad sales. Digital/social: High Times has developed an in-depth digital media strategy consisting of an online magazine, video content, e-commerce platforms and social media engagement.
Given the rapidly expanding acceptance and legalization of cannabis, High Times believes access to capital and an elevated profile via its anticipated public company listing will enable it to expand its brand, and fund new business opportunities that leverage nationwide medical and recreational usage initiatives. High Times’ growth strategy includes the following: Leveraging the High Times brand name by offering licensing and branding opportunities to events, dispensaries, lounges/hotels, retail stores, seed companies and consumer product companies. Aggregating and monetizing new and existing enthusiast content using High Times’ marquee-branded, affinity-based digital platforms offering e-commerce, social media, advertising and data collection. Expanding High Times-branded events and Cannabis Cup competitions, with dates planned in both new and existing geographies. Utilizing traditional media as a continuity play, driving consumers to High Times online and enhancing branded licensed products. Creating the definitive destination for cannabis knowledge through the development of education and distance learning. Pursuing accretive acquisitions that enhance cash flow, increase site traffic and content, and extend branding opportunities.
Adam Levin, chief executive officer of High Times, stated: “High Times is one of few household names in the cannabis industry. We believe that the barriers to entry are substantial, given the respect and trust associated with our brand that comes from informing and entertaining people for over 40 years. As a leading authority in a rapidly growing and evolving industry, we believe the public market is the best vehicle for capturing and funding substantial market opportunities and championing the innovations emerging across the globe in this industry.”
Edward J. Fred, chief executive officer of Origo, stated: “We believe High Times has an important mix of qualities essential for success. High Times is a highly-recognized brand in a rapidly growing industry that has a very engaged base and increasing opportunities to leverage that following.” High Times’ management team, led by Levin, will continue to run the combined company post-transaction.