High Times Buys DOPE Media for $11.2 Million Ahead of IPO
High Times is putting its money where the smoke is.
High Times Holding, parent of the eponymous magazine and organizer of legendary Cannabis Cup events, has agreed to acquire DOPE Media for $11.2 million in cash and stock. DOPE is a competing cannabis publication with a strong presence in eight regional markets, where it targets consumers who legally consume marijuana for both medicinal and recreational purposes.
The deal comes on the heels of High Times’s recent acquisition of CULTURE, another regional publication, as the company conducts a Regulation A+ IPO of up to $50 million open to all investors. The offering has been extended through October and is available at the company’s investing portal here.
A push into narrow geographical markets is an unusual move in the media sector. In recent years, countless regional publishers have collapsed or consolidated, with the likes of McClatchy, Gannett, and Lee Enterprises all seeing sharp share-price declines. Such publications were walloped when readers shifted to digital alternatives and advertising revenue fell into steady decline.
But cannabis is a different animal. Many cannabis-industry advertisers operate on a local basis due to state legislation surrounding marijuana. What’s more, Facebook and Google are reluctant to take marijuana-related advertisements, which leads many marketers to seek industry-specific publications to reach their audience.
“We are the 800-pound gorilla on a national level and now we have local,” High Times CEO Adam Levin told IPO Edge in an interview. “Localized media works. There’s no other way to reach that audience.”
He also said that it’s possible to track people on the Internet based on location, providing a “huge supply of digital traffic.” While it’s not usually possible to identify individual people, Internet users generally volunteer their IP address, which indicates geography.
Also, a company with a license to operate a marijuana business in one state may be unable to expand to another state. In some cases, laws require the business owner to be a resident of the state where he or she operates.
The publications High Times has acquired recently are only about 20% print by revenue. Indeed, the High Times print publication is a small fraction of the parent company’s business, with digital assets and the Cannabis Cup events generating the vast majority of sales.
Regional publications can also bolster event attendance. DOPE hosts its largest Dope Cup events in Seattle and Portland, prime locations for High Times to target.
And in areas where there isn’t yet a Cannabis Cup or Dope Cup, High Times will acquire a captive audience of readers. That opens a clear path to hosting new regional events.
“This is the perfect marriage of two like-minded businesses. As the largest cannabis consumer media company, High Times offers immense visibility across the country, and globe, like no one else in the space,” said George Jage, CEO of DOPE. “Utilizing their expertise we will be able to rapidly expand our footprint across the country and offer state-specific advertising solutions at a speed that wouldn’t have been possible before.”
The High Times IPO comes with investor fervor at a peak. Canadian producer Tilray’s stock has rocketed since its recent IPO while beer company Constellation Brands just poured several billion dollars into Canopy Growth.
John Jannarone, Editor-in-Chief