Yahoo Finance As marijuana economy grows, High Times aims to be more than a magazine
The image many Americans have of High Times is a magazine that symbolizes counterculture, sitting in the corner of a dorm room, maybe on a beanbag chair. Inside its pages: closeup shots depicting sparkling, sticky nuggets of marijuana.
But with marijuana now legal in four states and Washington D.C., and medicinal marijuana permitted in 24 states, High Times is highly focused on being an integral part of the marijuana economy, which is now estimated at nearly $3 billion in sales (where legal, that is) but expected to balloon to 10 times that size by 2020.
The 42-year-old company has expanded beyond a monthly magazine into digital content, video production, and live events. Its parent company, privately owned Trans-High Corp (or THC—get it?), appointed a new CEO in September: David Kohl, a former executive of Nokia and Viacom (VIA) who helped launch digital video platform Vevo. This month, THC added a COO, Larry Linietsky, who comes from iHeartMedia, Napster, and Universal Music Group.
While the magazine continues to publish stories in print and online, like an interview with presidential candidate Rand Paul about his views on legalization, Kohl has bigger goals in mind. They include establishing a High Times seal of approval for marijuana -- a la Good Housekeeping -- “something that will sit outside of High Times and has very strict standards,” he says. The industry also needs “a consumer reports platform,” in Kohl’s estimation, so High Times is launching a Wine Spectator-style ratings and review section this year for cannabis strains and edibles. In December, it came out with its first Trail Blazers list of the 50 most influential individuals in the cannabis industry. “That could be a celebrity, or a businessman,” Kohl says, “or it could be a grandmother in Oregon who makes the best edibles in the state.”
Kohl's experience from Vevo was a clear factor in his hire, as he will expand the company's video team at a time when the digital media landscape is changing rapidly. Just like any other news operation, High Times will need to innovate to keep up.
An entrepreneurial spirit
And that’s just the content. The company’s Cannabis Cup, a 20-year-old trade show and festival it relaunched in 2010, boasts a bevy of big-name artists this year like The Roots, Wiz Khalifa, and Method Man (an Oakland paper, East Bay Express, called it “a Coachella of chronic”). Kohl also wants to hold a cannabis business conference later this year for CEOs of marijuana startups. “Let’s be really expansive,” he says, “and think about all the business possibilities in this space. Imagine a chamomile ginger tea infused with THC, at a super-low dosage that helps you sleep or relax. Think about the next time you go for a massage, a cannabis-infused oil that seeps into your muscles and helps your muscles relax. There are so many products that can be infused with cannabis that, at a low dosage, will help you in a mild way.”
Kohl appears eager to shift the magazine’s image by shifting its readership—from stoners to entrepreneurs. "This isn't Cheech and Chong anymore, the industry has gone from that stoner image to something much more mainstream," he says. For that reason, Kohl has even taken up the charge of asking his staff not to use the word “recreational,” a common term for non-medicinal marijuana use in legalized states. Instead, he calls it “adult use,” arguing that calling it recreational, “is completely wrong—it’s adult use, because it’s for 21 and older. Let’s shift the industry to use the word adult, so that everyone understands it. The word ‘recreation’ doesn’t apply.” (The argument is a bit of a stretch.)
All of this—the new content planned, the expansion of video, the live events—is Kohl’s way of reaching out to the “canna-curious,” as he calls them—people who had little interest in marijuana in the past, but now “they’re seeing legalization happen, and the medicinal space, and adult use, and they’re wondering, ‘What does this mean for me?’” Kohl wants to create a sub-brand aimed at these people and at women, “a softer version” of High Times, as he puts it, “that might be a little more female-skewing for women age 18-35, because that audience typically hasn’t come to the High Times platform.” (Readership is 65% male.)
The only problem: With legalization came competition in coverage. High Times, with 5 million unique visitors per month coming to its site, isn’t the only joint in town, so to speak, offering marijuana media. More cannabis blogs have proliferated, and mainstream outlets with bigger audiences are covering the business more frequently. Vice writes often about edibles on its food vertical, Munchies. The Denver Post hired a marijuana editor and launched an entire brand within the paper called The Cannabist. The section has won journalism awards and, like High Times, is starting to look more like a multi-platform business than just a publication. It is looking to hire a general manager.
Legal complications
Meanwhile, business owners in the cannabis industry face one major financial headache that High Times can’t do much about: the major banks, from Bank of America to JPMorgan and across the board, have refused to give them bank accounts. They can't help it: Even as more states legalize, marijuana is still illegal under federal law, and none of these giants wants to be the first to find out whether regulators would punish them for offering financial services to marijuana companies. So if you're cannabis-based business, "you essentially can’t get a legal bank account in the state of operation," says Kohl.
Some business owners have found a backdoor way to enter the banking system, in many cases by being part of a parent company—but when banks figure out the true business, they dump the customer. The New York Times reported that the BECU credit union in Washington shut down some 20 accounts in the past three years after they found out they were marijuana businesses.
High Times launched an investment arm for this purpose in 2014, the High Times Growth Fund (currently inactive, relaunching this year) but it can't change the big banks' decisions. What it can do is "address the issue," Kohl says, by being an advocate. To that end, it is launching a political platform in March called High Times Road to the White House, which will interview all candidates for their view on legalization and regulation.
Some of the pressure to change how the industry is perceived is on the companies themselves. Kohl says that those selling marijuana or marijuana-infused products need to achieve better transparency by showing detailed ingredients, like THC levels; they don't all do this. Think of it like nutritional facts on a cereal box. "That needs to happen in short order," says Kohl, "to prove to the American public that we are doing the right thing."
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Daniel Roberts is a writer at Yahoo Finance, covering sports, media and technology.
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