Debra BorchardtNovember 7, 2022
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.
