High Times Could End up With Chicago Lawyer Stephen Kunkel

If High Times can’t pull together the money it owes lenders, the whole company could end up in the hands of one man – Stephen Kunkel, a partner at VentureSpring LLC in Chicago.

Green Market Report wrote in October that High Times defaulted on its $28 million debt. High Times agreed to a payment schedule with ExWorks to satisfy the issue, however, news of the payment either hasn’t happened, or if it has, it hasn’t been made public by either party.

That may be because the lender, ExWorks, is in bankruptcy court itself. That case, CIBC Bank USA v. ExWorks Capital Fund I, L.P., et al., is currently pending in the Circuit Court of Cook County, Illinois, as Case No. 2021 CH 06191. The court named Stephen Kunkel as the receiver of the assets – meaning he could end up being charged with divesting the assets of the company.

Despite ExWorks’ own financial troubles, High Times still owes the money and will be expected to meet its debt obligations.

Debt Timeline

High Times started borrowing money back in 2017, with a line of credit note that was converted to a senior secured convertible promissory note. The original amount of $11.5 million was later increased to $18.8 million.

High Times Chairman Adam Levin issued a  personal guarantee in 2018 to the lenders for the debt. That means he is on the hook to pay back the debt from his own personal assets if the business fails to do so.

High Times ultimately defaulted on the loan and informed ExWorks that it couldn’t pay back the debt. In November 2022, ExWorks said it would take payment from a third party to satisfy High Times’ debt., meaning High Times needed to go out and find investors to help.

That also means the clock is ticking down as to when ExWorks receiver Kunkle can actually take over the assets and potentially sell them. Kunkel was asked to comment on the case, and he hasn’t responded.

The key dates under the agreement include:

  • Oct. 26, 2022 – participation agreement due
  • Nov. 15, 2022 – a $6 million payment due
  • Sept. 30, 2023 – remaining $8 million due

High Times was also expected to pay ExWorks $60,000 at the end of each month in interest payments.

In a legal agreement that was agreed upon and drafted but not yet filed with the courts, Kunkel is expected to be appointed as receiver for the following High Times properties:

  • Hightimes Holding Corp.
  • Trans-High Corp.
  • High Times Productions Inc.
  • Cannabis Business Digital LLC
  • High Times Inc.
  • New Morning Productions Inc.
  • Hemp Times Inc.
  • Planet Hemp Inc.
  • The Hemp Company of America Inc.
  • High Times Cannex Corp.
  • High Times Press Inc.
  • Culture Pub Inc.
  • Wilshire & Veteran Media Corp.
  • Chalice Holdings Inc.
  • HT Retail Licensing LLC
  • Harvest of Merced LLC
  • Harvest of Riverside LLC
  • HT Staffing California, LLC
  • HT Retail Licensing LLC
  • Hightimes Mountain LLC
  • HHI Acquisition Corp.
  • Interurban Capital Group LLC
  • 530 Collective
  • J@G Enterprises Inc.
  • Mountain High Recreation Inc.

 Ticking Clock

The company has until Sept. 30, 2023, to come up with the money, buying it some time before it could all come crashing down.

For its part, High Times isn’t operating as if it could lose the company. It continues to do deals and publishes fresh content on the website. However, some subscribers have complained they paid for print subscriptions and have never received anything and can’t get through to customer service.

End of Offering?

High Times has also had a habit of extending its offering, even though the company is prohibited from selling any additional shares until it posts current financials. In September, the company extended the offering once again to Jan. 31, 2023, and so far there has been no word that the date was extended.

Perhaps it has but the SEC notice hasn’t been filed. Or maybe that is the end of the offering? The last financials the company publicly reported date back to 2018. The company has clearly stated in its offering, “That there is no ready public market for the Shares and that there is no guarantee that a market for their resale will ever exist. The Company has no obligation to list any of the Shares on any market or take any steps (including registration under the Securities Act or the Securities Exchange Act of 1934, as amended) with respect to facilitating trading or resale of the Shares.”

It also doesn’t seem to have had any kind of board of directors meeting in years, another requirement that the SEC imposes on companies. In December, High Times said it elected and appointed Shaun Jarvis as an independent director of the board by unanimous written consent.

However, the company didn’t state who left the board to create the vacancy filled by Jarvis. Previous board members included Colleen Manley, who was related to previous High times owner Tom Forcade, and Justin Ehrlich of Churchill Real Estate.

One party has already reached out to Kunkel with hopes of acquiring some of the assets but hasn’t gotten an answer. The attorneys for Kunkel have also not responded to questions about the timing of Kunkle taking over the HighTimes assets.

The publication has managed to stay one step ahead of those chasing it and now has eight months left to keep in the hands of Adam Levin.

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.

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