Lucy Scientific Discovery Inc. (NASDAQ: LSDI) has entered into an all-stock transaction to acquire the wellness company BlueSky Wellness Inc. and expand its footprint by adding more psychotropic products to its menu.
The company said on Tuesday that its recent acquisition of intellectual property and brand assets from High Times promises to revolutionize customer acquisition, as they embark on cross-marketing campaigns and enhanced user experiences.
By monetizing this intellectual property, Lucy is eyeing expansion into new legal markets, strengthening its position in the industry. This collaboration unites the expansive reach of Hightimes.com with BlueSky’s expertise in product design, formulation and online marketing.
Under the agreement, BlueSky shareholders will get 3.5 million shares of Lucy’s stock as well as an annual earn-out payment based on multiple annual EBITDAs in each of the next five years.
After closing the High Times and BlueSky acquisitions, the company expects to have 25 million shares issued and outstanding. It projects the two transactions will provide a minimum of $30 million of revenue and $10 million of EBITDA for the first twelve months after closing.
BlueSky Wellness is a portfolio of plant-based wellness brands including Keoni, Keoni Sport, Blush Wellness and AMMA Healing. The company has generated over $20 million in each of its last two years and sells a collection of products including full-spectrum oils to edibles.
“This exciting partnership marks a significant step forward in our company’s journey and we are thrilled to work together with both the High Times and Lucy teams to unlock the value of the brands,” BlueSky CEO Fraser Macdougall said in a statement.
“Through the launch of products in Canada and other countries, as well as other direct-to-consumer opportunities that exist for us to explore in the US market, the possibilities for growth are abundant.”
Read more: Lucy Scientific Discovery acquires High Times IP, expects $10M of revenue growth in 2024
Read more: Lucy Scientific Discovery launches sleep aid with Amanita muscaria and Reishi mushrooms
“The addition of the BlueSky portfolio and its team allows us to capitalize on revenue opportunities. Coupled with our High Times acquisition, this strategically positions us for substantial near and long-term growth,” Lucy Scientific Discovery CEO Richard Nanula said in a statement.
“This acquisition is a testament to our commitment to expand and grow our business, adding revenue that diversifies our company and should deliver significant value to our Lucy Scientific shareholders.”
Lucy holds a controlled drugs and substances dealer’s license granted by Health Canada’s Office of Controlled Substances. The company is authorized to develop, sell, deliver and manufacture pharmaceutical-grade active pharmaceutical ingredients (APIs) used in controlled substances and their raw material precursors.
Last July, Lucy launched a unique blend of Amanita muscaria and Reishi mushrooms combined with other nootropics to improve sleep quality.
Company stock has grown by 20 per cent in the past 5 days to $0.72 on the Nasdaq Exchange.
natalia@mugglehead.com
