High Times Ties Up with Lucy Scientific in Going-Public Transaction on Nasdaq
-High Times Holdings Corp. to exchange core IP assets for 19.9% stake in Lucy Scientific Discovery (NASDAQ: LSDI) plus milestone payments
-Transaction creates liquidity opportunity for High Times shareholders who receive Lucy stock and chance for new public shareholders to invest in High Times
-Deal comes a few years after High Times raised money in a Reg A+ offering available to all investors
-Thousands of High Times investors will now own shares in Lucy which will continue to trade on Nasdaq
By Daniella Parra of IPO Edge
High Times Holding Corp., the 46-year old company that owns the eponymous magazine, famous Cannabis Cup events and 420.com brands, agreed to sell its core intellectual property to Lucy Scientific Discovery (NASDAQ: LSDI), effectively taking High Times public.
The deal provides High Times investors with 19.9% of the outstanding shares in Lucy, along with semi-annual milestone payments based on profit growth metrics related to the High Times assets.
“We are so excited to be the first global cannabis brand to go public on the U.S. exchanges,” Executive Chairman Adam Levin told IPO Edge in an interview. “This transaction will allow Lucy and High Times shareholders to benefit from the non-plant touching side of the business, while still allowing HTH shareholders to retain the rights to all US plant-touching activities for a minimum of the next 50 years.”
The deal is structured to comply with domestic listing rules that can make it difficult for cannabis companies to go public. High Times does own retail dispensary assets but they’ll effectively be carved out of the deal so Lucy won’t own them directly. Instead, Lucy will license the right to operate retail stores and manufacture THC products in the U.S. and sell them back to High Times in return for fees.
This transaction offers stakeholders, customers, and investors the opportunity to directly invest in the High Times brand, marking a strategic shift in Lucy’s approach to acquiring brands in the psychotropic and cannabinoid community, it said. Lucy Scientific Discovery, led by CEO Richard Nanula, is a leader in the psychotropic and cannabis industries, with its sights set on global growth.
“I’ve known Adam for years and have been around High Times, but I look forward to seeing what we can do in using both of our previous experiences to grow this business to heights that we can’t yet even imagine,” Lucy Chairman and CEO Richard Nanula told IPO Edge.
Lucy expects the acquisition of High Times IP, including the 18 licensing agreements across various product categories it will acquire, to add at least $10M of revenue and $5M of EBITDA to its 2024 results and provide a solid foundation of growth as cannabis becomes legal around the world, the company said.
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