High Times plans to launch delivery of cannabis from dispensaries in California beginning in July, a service designed to accommodate the need for social distancing that has accelerated the shift to e-commerce across the retail sector.
Formally known as Hightimes Holding Corp., the company will begin with coverage areas spanning Los Angeles and the Bay Area, with plans to quickly expand service across the rest of the state.
The news comes a few weeks after High Times entered a purchase agreement to buy 13 active and planned retail dispensaries from Harvest Health and Recreation, Inc. for $80 million in cash and stock, giving the company an almost instant foothold in California’s cannabis market.
High Times plans to take advantage of its expertise and brand – the most well known in the industry – to convert the Harvest locations into High Times shops, complete with the company’s logo and aesthetic theme.
“During this time of increased social distancing, retail delivery is one of the safest, quickest and most effective ways to obtain products of any type – and cannabis is no different.” Hightimes Holding Corp.’s Chief Executive Officer Peter Horvath said. “The world has seen the retail model flipped on its head as the ongoing shift in consumer preference from physical stores to mobile (delivery and click and collect) just accelerated a decade in just a few weeks. We have always contemplated mobile as an essential component of our business, and today we are excited to get started in California, a large, robust, and sophisticated cannabis market.”
The dispensaries, which continue to operate as essential services in California during the lockdown, should help High Times thrive even as other parts of its business are temporarily impacted by social distancing rules. The dispensaries are also important as High Times continues with its recent pivot into a “People’s Choice Edition” of the Cannabis Cup, which takes place online rather than in person. The dispensary ownership makes it easy for High Times to handle large quantities of marijuana submitted for the contests and High Times could even sell winning strains in the new dispensaries.
“For clarification, in regard to our recently announced acquisition of California dispensaries, it’s never been about delivery or retail – We believe in a customer centric view where the customer shops from their phone, in a physical store, and transacts wherever it’s most convenient,” Mr. Horvath said. “Customers are channel agnostic, and we are committed to building a business that supports this better than our competitors with a seamless experience regardless of where a transaction begins and ends.”
High Times, whose other businesses include various media assets such as the famous magazine and conferences, appears to have timed its move into cannabis retail wisely. Earlier entrants to the space, including MedMen Enterprises Inc., Medicine Man Technologies, Inc., and Terra Tech Corp. have struggled and seen their share prices plummet.
High Times itself is on the cusp of listing its shares on a national stock exchange. The company has over 27,000 investors who have subscribed to an offering of up to $50 million which remains open. Some of the shares sold have generated cash that won’t appear on the company’s balance sheet until the stock begins to trade.
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