iHeartMedia Does $10M Pot Deal With High Times

iHeartMedia Inc. will trade up to $10 million worth of advertising inventory for a roughly 5% stake in the publisher of High Times, the 44-year-old marijuana magazine, offering the biggest U.S. radio broadcaster access to the nation’s growing number of cannabis consumers.

According to The Wall Street Journal, the deal, in which no cash is to change hands with Hightimes Holding Corp., provides the publisher with access to the media giant’s creative services and digital and radio advertising inventory as it gears up to sell shares to the public. High Times announced the transaction in a filing with Securities and Exchange Commission.

High Times leads in a sector “increasingly of interest to both iHeart listeners and the population in general,” said Joe Robinson, president of iHeartMedia Ventures.

“Cannabis at the end of the day is mainstream,” said High Times Chief Executive Adam Levin. “And iHeart has a huge mainstream appeal.”

Because of regulatory challenges at the federal level, big-brand association with cannabis has long been taboo. The deal with iHeart—along with Constellation Brands Inc.’s $4 billion investment into Canadian marijuana grower Canopy Growth Corp. this summer—signals that might be changing as more companies see the opportunity in connecting with a growing audience of cannabis users.

High Times is offering the public shares via a regulatory shortcut known as Regulation A+, which lets companies sell limited amounts of stock before listing it on a national exchange. Buyers of the shares can be both accredited and unaccredited investors, and companies typically face less stringent reporting requirements than in a typical IPO. High Times, seeking to offer its fan base ownership in its growing enterprise, already has $12.5 million committed from more than 9,000 investors.