High Times Extends Its Offering To End Of November

HighTimes Holding Corp. has extended its stock offering once again according to a filing with the SEC. This time, the offering is set to close on November 30, 2018. It had been set to close on Oct. 31, but the company said it wanted to accommodate additional investors.

CEO Adam Levin had commented recently that the iHeart Radio deal had also resulted in an influx of new investors to the offering and that the extension of the offering date would also give more time for this new audience hearing about the offering.

In addition to extending the offering, High Times also announced that its new partner Chalice Holdings had missed a debt payment. The company, Chalice Festivals, apparently owed $587,500 and when it didn’t make the payment, Gemini Finance Corp. decided to foreclose on the property. Gemini will receive substantially all of the assets and business of Wisdom Apparatus and Chalice Festivals, both California corporations. High Times will be acquiring the festival company from Gemini.

Gemini will receive $560,000 in a promissory note between Chalice Holdings and High Times that will be due March 29, 2019. The note is secured by High Times stock from the Reg A offering whose deadline has been extended.

Separately, High Times released its earnings for the past six months ending June 30, 2018. According to the company’s filing, U.S. revenues decreased by $1.2 million or 12.5%, to $8.8 million for the six months ended June 30, 2018 from $10.1 million for the six months ended June 30, 2017 due to lower than expected results of the event in San Bernardino and the lower print magazine revenues, which were partially offset by an increase in merchandising sales.

Festival revenue fell 14.2% for the first six months to $7 million, publishing and advertising fell 13% to $1.6 million, but merchandising jumped 225% to $202,000. Digital advertising and social media service revenue increased over the prior year which did partially offset the decline in total print revenue.

High Times’ acquisition of the Green Rush Daily website at the end of the first quarter 2018 and its subsequent integration into the company in the second quarter is expected to increase the amount of ad inventory space even though the founder Scott McGovern is no longer with the company. A better online store for branded merchandise and new licensing deals have also begun to pay off.

Operating expenses actually fell 42.9% to $6.2 million as professional fees dropped. but the net loss for the six months increased by 95.3% to $19.7 million.

Since those earnings, High Times has made many acquisitions. In September, it agreed to acquire DOPE Media for $$1.2 million, of which 10,000,420 will be paid in High Times stock and $1,000,000 in cash.

It acquired Culture Magazine in June for $4 million in an all stock deal, but the filing did not state that this deal had been closed. The company has an incentive to complete its offering by December 1, 2018, at which point it will be required to issue a promissory note to Southland Publishing for $2 million, in lieu of $4 million worth of stock. Culture Pub a new subsidiary of High Times wants to purchase some of Culture Magazines assets from Southland.

On September 11, 2018, High Times licensed to Spectrum the right to use Hightimes™ name, logo and brand in connection with the marketing and distribution of all Spectrum products and granted Spectrum, over a period of three years, an aggregate of $1,500,000 worth of advertising credits in the High Times print and internet magazines and at all festivals sponsored by High Times. In return, High Times got 11 units of Spectrum membership interests, representing 9.9% of Spectrum’s outstanding equity. Spectrum does business as “SPECTRUM KING LED,” and specializes in designing, manufacturing and selling high-end LED grow lights for indoor and greenhouse applications.

Debra Borchardt

Debra BorchardtDebra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief 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 Masters degree in Business Journalism from New York University.


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