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Wednesday, Jun 19, 2024
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

Cannabis

Lucy Scientific Discovery acquires High Times IP, expects $10M of revenue growth in 2024

Lucy also expects to add $5 million of EBITDA to its financial results next year from the deal

Lucy Scientific Discovery acquires High Times IP, expects $10M of revenue growth in 2024
High Times Market (dispensary), San Bernardino, California. Photo via Hightimes Holding Corp.

British Columbia’s psychedelic drug developer Lucy Scientific Discovery Inc. (NASDAQ: LSDI) will be acquiring intellectual property (IP) from the world’s oldest cannabis publication for 20 per cent of its shares and a series of payments.

The company announced the acquisition of Hightimes Holding Corp. (HHC) IP on Thursday, which will include rights to a stream of licensing and royalty income from its High Times, 420.com and Cannabis Cup brands and their domain names.

Lucy will be providing HHC with semi-annual payments for five years based on earnings before income, taxes, depreciation and amortization (EBITDA) generated from the acquisition. The company will have the option to make those payments with cash or stock.

Following the IP acquisition, which is expected to close within the next two weeks, Lucy will also provide High Times with the right to run retail outlets and distribute THC products from the aforementioned brands in the United States in exchange for a $1 million annual license fee, which will increase to $2 million per year once cannabis has been legalized federally in the country.

Lucy plans to use the brand rights obtained from HHC to generate revenue by expanding and improving its 18 currently established licensing deals, both in the U.S. and throughout the globe, for things like consumer products and merchandise.

Read more: Avextra starts exporting cannabis-based products to Switzerland and Austria

Read more: Aurora Cannabis partners with Brazilian firm to expand CBD portfolio

High Times is now publicly traded as a result of the acquisition

Lucy expects the deal to add over $10 million of revenue to its financial results next year and $5 million of EBITDA.

“This transaction will open up tremendous new opportunities to grow and expand the High Times brand led by Richard Nanula, who has decades of experience with some of the biggest consumer brands and companies in the world,” said Adam Levin, Executive Chairman of HHC.

Levin says High Times is delighted to become a major shareholder of Lucy Scientific Discovery, which completed its initial public offering and Nasdaq listing of 1,875,000 shares in February at $4.00 a piece.

“Lucy expects this acquisition to drive high-margin revenue quickly and sustainably across the cannabis sector around the world,” said the B.C. company’s CEO Richard Nanula.

Lucy recently launched the sleep aid product Twilight, which contains amanita muscaria and reishi mushrooms.

The company also partnered with Wesana Health Holdings Inc. (CSE: WESA) (OTCQB: WSNAF) in March to develop the CBD and psilocybin-based drug SANA-013 for the treatment of migraines, cluster headaches, major depressive disorder and other conditions.

High Times was established in 1974 and has featured work from famous writers such as Truman Capote and Hunter S. Thompson.

Since 1988, the publication’s Cannabis Cup has been the world’s most renowned competition for pot. It has had judges such as Snoop Dogg, Joe Rogan, Tommy Chong and several other renowned figures in the cannabis space.

Lucy shares rose by nearly 16 per cent to US$0.68 on the Nasdaq exchange Friday but have declined by over 77 per cent in the past year.

 

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