Moxie Archives - Green Market Report

Debra BorchardtNovember 7, 2022
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4min9922

Hightimes Holding Corp. and HT Red LLC, a wholly owned subsidiary of Hightimes, bought MXY Holdings Inc., also known as Moxie Holdings, in an all-stock deal. Moxie is known for cultivating, producing, manufacturing, distributing, and selling cannabis products in the state of California.

The deal grants 1,363,654 shares of Hightimes voting common stock to the Moxie organization and includes Moxie’s 11,000-square-foot manufacturing facility as well as 46,000 square feet of flowering canopy cultivation, which is capable of producing up to 3,500 pounds of dry flower and more than 25,000 pounds of fresh frozen cannabis for High Times and its associated branded products each year.

Hightimes stock does not trade publicly nor is there a market for trading the private stock at this time. The company has planned to go public for years but has yet to do so. Hightimes also states in its stock offering that the stock could potentially never trade. The shares were given a par value of $0.001, which would make the value of this deal $1,363.65.

“With our current platform of stores, we believe this acquisition will be synergistic in nature for the Moxie brands and provide a good home for their branded products in California,” Paul Henderson, the chief executive officer of High Times, noted. “Additionally, it will provide High Times with a cultivation and production team that has won dozens of previous Cannabis Cups and other awards across the country.”

“Moxie has been a leading brand in recreational and medical cannabis since our founding, which made it non-negotiable that any acquisition agreement was done with an organization that shares our commitment to creating the highest-quality cannabis products that are trusted by consumers and regulators,” said Jordan Lams, CEO and founder of Moxie. “We believe these values are essential, especially in our current economic climate, for maintaining a strong and prosperous industry. High Times is one of the most recognizable brands in cannabis, and we have the utmost confidence in their ability to continue Moxie’s upward trajectory in California. This combination creates a vertically integrated business model that allows for more control and provides High Times with the freedom to make product-driven decisions that we know will help the industry and provide recreational and medical cannabis users with the highest quality cannabis products.”

In addition, Hightimes entered into separate management services agreements with each of Pure CA, MXY, Sapphire, and Calaveras under which Hightimes agreed to manage those businesses, pending the final closing of the transactions contemplated by the purchase agreements and upon receipt of regulatory approvals. Hightimes will pay all of the expenses of these entities. In consideration of such services, Hightimes will receive all of the revenues and profits, if any, from such businesses during the term of such management services agreements.

Financial Peril

High Times is making an acquisition at a time when the company has quit paying its debt. It is in default on the debt surrounding the company’s original acquisition five years ago.

High Times also is involved in numerous lawsuits, the most recent of which was the claim that the previous sellers owed the company $10 million saying it wasn’t truthful during the acquisition negotiations. That group, led by Eleanora Kennedy, actually sued High Times first for not paying what it owed on the acquisition of the magazine.


Debra BorchardtJuly 9, 2019
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5min970

Cannabis retailer Green Growth Brands Inc. (CSE: GGB)(OTCQB: GGBXF) is acquiring MXY Holdings LLC also known as Moxie in an all-stock deal valued at $310 million. The deal is expected to close within six months.

Moxie

Moxie is located in three states at this time, California, Nevada, and Pennsylvania. Michigan is set to be the fourth state. The products are in 250 dispensaries, which is a retail relationship that GGB would like to leverage.  Moxie provides customers with high-quality recreational and medical cannabis products.  Moxie offers live resin vape cartridges, CBD vape cartridges, liquid Moxie vape cartridges, and pre-rolled joints.

Green Growth said that the combination of Moxie and GGB would create one of the first cannabis companies to provide consumers a comprehensive product offering, including both CBD and tetrahydrocannabinol (THC) product lines and distribution that run from mainstream retail to cannabis dispensaries, all led by management with decades of expertise and credibility.

“In the short time since we began operations, we have built a business comprised of highly experienced management and merchant teams and cannabis experts, who have created successful CBD and MSO businesses. The coming together of Moxie and Green Growth Brands is anticipated to complete the circle,” said Peter Horvath, CEO of Green Growth Brands.  “As a ‘360 degree’ cannabis company, we expect to bring an expertise to each segment of the combined business: cannabis dispensaries, vertically-integrated and wholesale CBD and wholesale cannabis consumer products.”

Terms

A new Ontario limited partnership will be formed and GGB will be the general partner who will acquire the operating companies of GGB and the issued and outstanding units of Moxie, an arm’s length third party, in an all-equity interest transaction.  As part of the deal, GGB will also be directly acquiring shares of MXY C, INC. and MXY D, INC. Delaware entities within the Moxie structure, and interests in two entities, PurePenn LLC and Pure CA, LLC, with which Moxie has current acquisition agreements.

If Moxie terminates the deal, there is a $10 million fee. If GGB terminates the deal, there is a $17.5 million fee.

“The pairing between Moxie and Green Growth Brands is anticipated to accelerate growth for both businesses that results in a differentiated and expansive business model,” said Jordan Lams, Co-Founder and CEO of Moxie. “Moxie’s success comes from keeping our promise of delivering premium quality products to our consumers that creates an emotional connection with Moxie across multiple geographies. Both companies have proven track records of building customer loyalty through authenticity, and together, we are going to focus on taking steps to rapidly grow America’s mainstream cannabis brands.”

Green Growth’s Growth Plans

The Moxie acquisition is part of GGB’s focused growth strategy.  GGB is rapidly building its cannabidiol (CBD) business, including recently securing additional distribution through Designer Brands Inc., the parent company of DSW shoe stores (NYSE: DBI) and Abercrombie & Fitch Co. (NYSE: ANF), and is expanding its footprint of Seventh Sense Botanical Therapy shops from the current 61 to an expected 200+ by the end of calendar year 2019.  GGB is also building its MSO network, which now includes the potential for up to 47 dispensary licenses in three key states.

Moxie is recognized by its peers in cannabis, winning close to 100 industry awards over the years, including Brand of the Year at the 2018 California Cannabis Association Awards. Moxie’s newest product, the DART vaporizer, won first place at the recent 2019 High Times SoCal Cannabis Cup with its Piña Colada flavor. Jordan Lams was named 100 Most Influential People In Cannabis by High Times two years running,


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