As Green Rush Momentum Grows, High Times Aligns to Come Public
Hemp, often referred to as marijuana’s cousin, is front-and-center in the media with Congress’ passage of the 2018 U.S. Farm Bill to legalize commercial production of the plant after more than 80 years of prohibition. This is just the latest in a spate of news related to marijuana reformation that is sweeping the globe as consumers and lawmakers change their view on all things cannabis, including New Zealand now deciding to leave it up to voters to make marijuana legal and N.Y. Governor Andrew Cuomo’s 2019 agenda emphasizing a push for legal recreational marijuana.
The movement has picked up tailwinds, including 10 states and Washington D.C. now allowing recreational use of marijuana and 33 states legalizing medical marijuana. A 2018 survey by Pew Research showed that 62% of Americans support legal marijuana, exactly double the percentage of people that did in 2000. In October, Canada made adult-use legal from coast-to-coast and Mexico’s Supreme Court ruled that marijuana prohibition is unconstitutional, setting the stage for the country to follow Canada’s lead.
Globally, more than 30 countries, covering nearly 1 billion people, have legalized marijuana in some form, with expectations that more are coming onboard in what could blossom into a $200 billion industry.
Against that backdrop, High Times Holdings Corp., the parent of High Times magazine, easily the most recognizable brand in the cannabis industry, is taking the opportunity to become a public entity through a Regulation A+ initial public offering to the general population. The company is seeking to raise up to $50 million at $11 per share at a market valuation of $225 million. High Times plans to trade on the Nasdaq exchange.
According to the High Times investor site, investors can buy as little as $99 worth of the stock.
Since 1974, High Times has been leading efforts for the legalization of marijuana, an advocacy position that it retains today with 8.5 million social media followers and approximately 10 million monthly visitors to its website. Owing to the fact that federal laws prohibit advertising cannabis products on Google or Facebook, High Times’ reach and influence fill a great need for advertisers looking to get their products in front of consumers. The company is able to generate about 150 million ad impressions per month through its platform.
High Times says that while ad sales are growing, a burgeoning revenue source is from their events, namely the highly acclaimed Cannabis Cup, and that it intends to bolster the top and bottom lines with increased licensing initiatives going forward. In 2019, the company will host 21 events in five different countries. These events have been a part of total revenue rising from $14.5 million in 2017 to a company forecast of $23.0 million this year and $53.7 million in 2019.
CEO Adam Levin says in an investor webinar that for now High Times is strictly a media company, but as the industry continues to mature, management will evaluate all opportunities
to leverage its high-profile brand, including dispensaries and touching the plant. To that point, the plan for use of proceeds from the IPO is to invest in growth across all its business platforms.
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