It appears High Times will be taking over the dispensary coming to the former John Varvatos space in Union Square, but the company’s recent track record does not inspire high confidence.
Old-school stoner magazine High Times looked like it would be living high on the hog three years ago when a group of L.A.-based investors bought the magazine for $70 million, but since then, High Times the company has fallen on hard times. Their planned pivot toward live “Cannabis Cup”-style events has been at best a mixed bag, as last-minute cancellations with no warnings and botched attempts at event permits have left ticket buyers high and dry. Their cancellation of Reggae on the River in Humboldt County last summer held true to the company’s pattern of thoroughly pissing off local officials, and of course, there are no events of any kind likely to happen this summer. The company’s attempt to IPO has been a comical disaster, and at this point is pretty much just a glorified GoFundMe effort that has no tradable shares nearly two years into the effort.
We are pleased to announce our deal with @HarvestHOC to acquire their 13 dispensaries in California. Upon completion of this deal High Times will, for the first time ever, legally sell you cannabis! https://t.co/bHOdW61f5n— High Times (@HIGH_TIMES_Mag) April 28, 2020
So it comes as quite a shock that the Associated Press reports that parent company Hightimes Holding Corp. is acquiring 13 retail cannabis dispensaries in California “which includes dispensaries in Oakland, San Francisco and Los Angeles.” That report does not say which SF dispensary this involves, nor does the official press release, nor does High Times’ company announcement of the deal. But from the small amount of information in these reports and press releases, it appears to be the recently approved Union Square dispensary in the former John Varvatos space. (And that may be subject to the SF Office of Cannabis approving the deal.)
High Times’ tweet above says “We are pleased to announce our deal with @HarvestHOC,” so local pot shoppers might assume this means High Times is taking over the dispensaries formerly known as Harvest on Geary and Harvest off Mission. This does not appear to be the case. Both of those SF Harvest dispensaries have recently changed their names to Urbana, and there is no love lost between the two rival Harvest companies, as evidenced by their years-long trademark lawsuit.
The Harvest whose dispensaries High Times acquired is Arizona-based Harvest Health & Recreation, and they do not even have a dispensary in San Francisco. But last month they acquired the Seattle mega-chain dispensary Have a Heart, which is the dispensary that the Planning Commission approved for Union Square in February. (SF Office of Cannabis records show Have a Heart has another proposed retail application at 5600 Geary Blvd. whose application is listed as "Processing," though that location is also included in the SEC filings for this acquisition.)
The Associated Press calls High Times’ acquisition a “cash and stock deal valued at $80 million,” a claim that absolutely does not pass the smell test. High Times stock does not yet even exist in tradable form. The above screenshot is from the kind of emails High Times sends out pretty much every goddamned day, begging for money but framing it as “Have you invested in the most well-known brand in cannabis to assist us on this mission yet? If not, what are you waiting for??” High Times’ two-years-and-still-running attempt to go public was originally supposed to be on the NASDAQ, but they couldn’t get the money together, and they finally settled on a penny-stock platform called the OTCQX. Those shares still are not trading according to Yahoo Finance, but the “Invest Today!” emails still show up regularly, and are something of a running joke within the cannabis industry.
It seems a stretch that a company that emails people every day begging for money for a stock that essentially does not even exist yet has just completed a deal to buy 13 dispensaries primarily with that non-existent stock. Further, trade publication Marijuana Business Daily reports that “High Times Holding said it will redesign and rebrand the stores under the High Times logo,” an arrangement that would surely not please the Union Square merchants who’d worked with Have a Heart to strike an agreement on tasteful signage and branding. Consider also that the SF Office of Cannabis may not be on board with aspects of the deal, and that High Times does not have a good history of working with local officials and regulators. There are many aspects to this supposed High Times-owned SF dispensary that just seem highly unlikely.
Note: This post has been updated to reflect that the companies involved have a second retail application pending.
Top image: High Times magazine