Earlier this month, Hightimes Holding Corp., parent of High Times, revealed that it has abandoned its efforts to list on the NASDAQ, a goal it had been pursuing for since mid-2017. The company launched an offering two years ago at $11 per share through the Reg A+ process, and it reported that it would extend its Reg A+ capital raise until 4.545 million shares had been sold or until March 31st. It disclosed in an SEC filing that it recently sold 363,636 shares at $5.50 in a private placement to Ontario-based Rayray Investments (Raymond Leach, an original investor in MedReleaf), a 50% discount to where it has been selling shares.
In a shareholder letter released yesterday, Executive Chairman Adam Levin suggested that the company will continue to raise capital through the Reg A+ offering while it awaits a listing on the OTCQX rather than the NASDAQ. He admitted that the path to public trading had fallen short of the company’s expectations:
Our largest misgiving is that High Times had hoped to be public by now. But given the market’s volatility in the cannabis sector, we also believe this may have been a blessing in disguise for our company and shareholders alike. We are now more focused and realigned.
Adam Levin, Executive Chairman of Hightimes Holdings
We spent this past year building our new corporate strategy, which we are excited to share. Ultimately, we believe we have found the best way to leverage our global brand and content engine to power the next steps in High Times’s evolution.
Indeed, the company has shifted its strategy to become more plant-touching. It had highly praised its new CEO, media veteran Kraig Fox, when he joined as CEO in early April, but Fox left the company on December 26th. Earlier this month, it named Stormy Simon, former President of Overstock.com, as CEO, “as the company prepares to develop its physical and virtual distribution businesses.” Traditionally, the company has focused on events and media. Simon had served on the Board of Directors of Hightimes Holding Corp. for the past two years. Simon will earn a base salary of $300K per year, though it will be reduced to $215K until the company raises an additional $10 million, with the difference accrued. Her target bonus in 2020 is $225K. She was also granted the right to buy 200 shares at $11.00 and 300K shares as a grant.
Published: January 29, 2020
Founder & Interim Editor of L.A. Cannabis News