Debra Borchardt
Long-time cannabis media company High Times is launching an equity crowdfunding program under the SEC’s Reg. A+ process. The company had made plans in 2017 to go public following a merger with Origo Acquisition company, but so far the deal hasn’t closed. With the crowdfunding campaign, High Times will offer investors a chance to buy shares before the delayed initial public offering.
The Reg. A+ stock is to be priced at $11 a share and the company is saying that this will be a 10% discount to its planned price on NASDAQ. The shares are available for purchase at hightimes.com/invest. For some reason, the company statement says that “Investors can buy one of the first Cannabis-related stocks expected to go public.” Yet, there are already hundreds of cannabis-related stocks that are publicly traded.
“It was important to me that this offering be open to anyone who wants to join this historic moment, not just those with big brokerage accounts,” said CEO Adam Levin. “We’re becoming one of the first Cannabis-focused companies publicly traded on the Nasdaq. We got here in no small part because of our incredible audience, who have been supporting High Times for decades. As interest in cannabis grows and legalization spreads, so too will High Times.”
However, Cronos Group (CRON) recently listed on NASDAQ, plus there are several biotech companies listed on NASDAQ that use cannabis for their compounds like GW Pharmaceuticals (GWPH), so this is a really odd comment to make. Plus, NASDAQ has made numerous attempts to delist Origo Acquisition, which is doing the deal with High Times, so it isn’t certain that the shares will ever truly list on the exchange. A company spokesman said that extensions have been made and preliminary approval from NASDAQ has been granted.
In addition to the crowdfunding program, High Times announced that it is adding the former President of Mexico Vicente Fox Quesada to its board of directors. Fox was once the President of Coca-Cola Latin America. He later served as governor of the Mexican state of
Guanajuato, before becoming President of Mexico from 2000 to 2006. Fox has been a prominent public speaker and writer and a popular social media presence, all while overseeing development of the Vicente Fox Center of Studies, Library, and Museum.
“Vicente Fox Quesada brings international relationships and decades of experience in business, politics, and policy,” said Levin. “He is a proven leader and global statesman whose unique experience, perspectives and connections will be invaluable for High Times as we expand overseas, online, and into so many new areas. We’re fortunate he has decided to join our leadership team.”
“At a time when nearly two-thirds of the United States have legalized some form of cannabis, and the U.S. Congress is considering giving all states control over legalization decisions, this is the right time to invest in the business of cannabis,” said Fox. “The ‘Green Rush,’ as it’s been called, will be one of the largest wealth creators of our generation. And as we move out of the shadows, real businesses in this sector will prosper in a way most industries only dream of.”
Debt Problems Remain
High Times said back in January that it was going to try to raise money. In order to meet the NASDAQ listing requirements, High Times will need $14.7 million from this offering. The company has said that it has 400 new investors from the new Reg. A process. The company also said that the new ownership has expanded it online reach with digital impressions topping 275 million per month an increase of 425%.
In addition to raising money, High Times said it would also address its debt obligations. High Times had extended a loan payment that it owed to ExWorks from August 2017 to August 2018 for a principal amount of $11.5 million. This has been extended to August 2019 with the option to extend to 2020 or convert to stock. It made a down payment of $2.7 million but has been staring at this huge looming payment due in months. The merger with Origo Acquisition that was expected to be closed months ago would have solved many problems. Instead, the merger has dragged on for months and the clock has been ticking away.
It was rumored that a different party had offered to purchase the company’s debt, but this was never confirmed. A move of this sort would have saved the company by paying off the impending debt payment but then it would also have reduced the valuation of the company dramatically.
In addition to the financial struggles, the company was running an advertisement on Indeed for a new Chief Financial Officer. The company said it was only seeing what talent was available on the market. Green Market Report also learned that Levin has also approached other individuals to become the company’s Digital Editor-In-Chief and it was offered to Sean Cooley.
Editors Note: Green Market Report is a partner with High Times Television and is providing financial videos for the business channel.
