High Times Archives - Green Market Report

StaffJuly 6, 2022
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The Daily Hit is a recap of the top cannabis business stories for July 6, 2022.

ON THE SITE

Fitch Ratings Downgrades Canopy Growth on Recent Debt Deal

Fitch Ratings has downgraded the Long-Term Issuer Default Ratings (IDR) for Canopy Growth Corporation (NASDAQ: CGC) and 11065220 Canada Inc. to ‘C’ from ‘CCC’. Fitch said it has affirmed the ‘B’/’RR1’ratings for the senior secured term loan facility. The downgrade comes after Canopy’s announcement that it had entered into privately negotiated exchange agreements with a limited number of convertible noteholders including Constellation Brands, Inc. (NYSE: STZ) through its wholly-owned subsidiary to acquire approximately CAD263 million principal amount of the notes in exchange for Canopy common shares and approximately C$3 million in cash. Read more here.

High Times Buys Consumption Lounge Paying With Zero Value Stock

Cannabis publisher Hightimes Holding Corp. posted a new filing with the SEC announcing that it made a deal back in April to buy a consumption lounge in West Hollywood CA called The Mezz. The deal apparently took place on April 8, 2022 as High Times entered into a Membership Interest Purchase Agreement with Courtney Zalewski, as manager of The Mezz La Brea, LLC, and the holders of a majority-in-interest of the issued and outstanding membership interests in The Mezz. According to the filing, The Mezz sold for $6 million consisting of  $1,500,000 in convertible promissory notes and  $4,500,000 of Hightimes Class A common stock. Read more here.

LeafLink Reports Drop In May Cannabis Sales

Cannatech company LeafLink’s June Flash report indicated that the month of May was a mixed bag for cannabis category sales, state-by-state performance, and pricing analysis. The report analyzed data from Leaflink’s wholesale brand distribution and retailer platforms, with markets in Arizona, California, Colorado, Michigan, Nevada, Oregon, and Massachusetts. Read more here.

Dispensaries like Bank Buildings But It’s Not The Vaults

Bank buildings are becoming attractive locations for cannabis dispensaries, but fortified vaults aren’t the reason. The banking industry has been closing bank branches by the thousands. According to the National Community Reinvestment Coalition, 9% of all branch locations in the U.S. closed between 2017 and 2021 or roughly 7,500 brick and mortar locations. This move really picked up steam during the pandemic when most people migrated to online banking. Bank consolidation and improvements in mobile banking have also contributed to the banks giving up their locations. Read more here.

5 Reasons 2022 Will Be Big For Psychedelics

Today in the psychedelics industry there is a flurry of activity by some of the industry’s biggest donors, business developers, celebrities, and other movers and shakers who are not only upping their involvement in the industry today but also laser-focused on where it is going. Read more here.

IN OTHER NEWS

Akerna Corp.

Business intelligence from Akerna (Nasdaq: KERN), an enterprise software company and the developer of technology infrastructures for the global cannabis industry, today announced that U.S. cannabis shoppers spent a total of $255.5 million on adult-use and medical cannabis products during the Fourth of July weekend. Read more here.

NewLake Capital Partners, Inc.

NewLake Capital Partners, Inc. (OTCQX: NLCP), a provider of real estate capital to state-licensed cannabis operators, today announced $50 million of investments across three properties, marking the full commitment of capital raised during the company’s initial public offering. NewLake acquired two properties from a leading publicly-traded U.S. multi-state cannabis operator and amended its existing lease with another leading publicly-traded U.S. MSO to fund an already completed expansion. As of June 30, 2022, NewLake has approximately $28.7 million of unfunded commitments. Read more here.

TPCO Holding Corp., Curio Wellness

TPCO Holding Corp. (NEO: GRAM.U) (OTCQX: GRAMF), a consumer-focused California cannabis company, today announced that it has entered into an exclusive brand licensing and cultivation and production agreement with Curio Wellness, to bring the company’s brands and top-quality products to the State of Maryland, with anticipated market launch in late 2022. Read more here.

Rocky Mountain High Brands, Inc.

Rocky Mountain High Brands, Inc. (OTC: RMHB) today announced the launch of Rocky Mountain NexBev, Inc. a wholly owned subsidiary specializing in cannabis beverages. NexBev will work to ensure CBD Life Mexico S.A. de C.V. has product and build RMHB’s HEMPd brand by utilizing a strong network of cannabis co-packers throughout the United States. Read more here.

 


Debra BorchardtJuly 6, 2022
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Cannabis publisher Hightimes Holding Corp. posted a new filing with the SEC announcing that it made a deal back in April to buy a consumption lounge in West Hollywood CA called The Mezz. The deal apparently took place on April 8, 2022 as High Times entered into a Membership Interest Purchase Agreement with Courtney Zalewski, as manager of The Mezz La Brea, LLC, and the holders of a majority-in-interest of the issued and outstanding membership interests in The Mezz. According to the filing, The Mezz sold for $6 million consisting of  $1,500,000 in convertible promissory notes and  $4,500,000 of Hightimes Class A common stock.

High Times can no longer sell stock in its Reg A offering because the company has not published current financials. It has been three years since investors have been given any financial information about the company. A couple of months ago some High Times investors took to Reddit to say they had received correspondence from the company about their shares, but since the shares don’t trade and could potentially never trade, the value is zero.

High Times will still need to get regulatory approvals from the City of West Hollywood and the California Department of Cannabis Control for the transfer control of The Mezz’s cannabis licenses from the Sellers to Hightimes. In addition to buying the lounge, High Times entered into a Management Services Agreement, dated May 6, 2022, with The Mezz to provide certain management and administrative support services to The Mezz. So, even though the sale hasn’t been approved yet, High Times will receive all of the income from The Mezz’s operations, minus The Mezz’s expenses, during the period the Management Services Agreement is in effect.

Successful Lounge?

Apparently, The Mezz either hasn’t been making enough money to pay the rent or was just not well run. The Mezz owed $1,073,727 in back rent under a lease agreement signed April 5, 2019. “Under the terms of the Lease Amendment, the Company agreed to pay $200,000 to Lessor in full satisfaction of the Back Rent owed, and to pay, or cause The Mezz to pay, an additional security deposit in the amount of $126,624 to Lessor as a security deposit, plus $42,208 in rent for the month of May 2022.” The base rent on the space is $35,000 a month.

That High Times is agreeing to pay the back rent on The Mezz location at the same time the company was taken to court in San Francisco for not paying the back rent on the Have A Heart dispensary is ironic.

Reg A Extended – Again

High Times, once again extended its offering. This time to September 20, 2022. The filing states, “The Offering is presently paused pending the Company’s completion of an audit of its 2019, 2020 and 2021 annual consolidated financial statements and preparation of unaudited consolidated financial statement for the six months ended June 30, 2020 and June 30, 2021, as well as the filing with the SEC of the Company’s annual reports on Form 1-K for the years ended December 31, 2019, 2020 and 2021 and the Company’s semi-annual reports on Form 1-SA for the six months ended June 30, 2020 and 2021.”


Debra BorchardtJune 21, 2022
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High Times has sold its LGBTQ publications to Equal Entertainment for an undisclosed amount. The publications include Out.com/ Magazine, Advocate.com/ Magazine, Out Traveler Magazine, Plus Magazine, and Pride.com and given a new name for the company Equal Pride. According to the press release, “The acquisition returns the company to LBGTQ+ majority ownership and creates the largest LGBTQ+ – owned media, digital, TV, and entertainment company in the country with the majority of Equal Pride employees also identifying as LGBTQ+, women, and/or people of color.” The newly named Equal Pride will be run by Mark Berryhill who becomes Chief Executive Officer.

“Our combined company will be the premier home for LGBTQ+ people — and increasingly women and people of color creators, storytellers, journalists, and business people who want to have an impact through their work with one of the most diverse group of media and digital brands in the world,” CEO Mark Berryhill said.

Troubled Ownership

Technically, it was Oreva Capital, the Los Angeles-based investment firm that owns High Times that backed a management-led buyout of Here Publishing, which owned the titles “The Advocate” and “Out” in 2017. The price was not disclosed at that time and the group of titles was rebranded as Pride Media. 

Then the trouble began. Out found it difficult to retain editorial staff and a revolving door of executives came and went. Staff cuts began and amid the layoffs, more freelance writers came on. However, they began getting stiffed and filed a lawsuit in order to get paid. The writers wrote at the time, “OUT.com saw a spike in traffic from 691,000 unique views in September to about 1.5 million in December 2018. OUT’s digital ad revenue has grown 48% year over year. All revenue for Pride Media was estimated to be at just under $5.8 million for 2018 and projected to increase 26% this year. Pride Media and its investors have plenty of money to pay the outstanding sum of invoices — a drop in the bucket compared to the projected $7.2 million in ad revenue Pride Media is projected to earn this year, according to the WWD story. Clearly, profits were and are being made.”

Then the company was accused of not paying a publishing partner PinkNews in 2019. That case finally got resolved by Judge Analisa Torres who awarded PinkNews $49,998.84 on May 21, 2021. In January 2022, PinkNews asked for its legal fees to be covered but was denied the request. 

In addition to problems paying its bills, Oreva and High Times owner Adam Levin was outed for supporting Republican politicians who had opposed gay rights. Levin countered with his support of politicians who voted in favor of gay rights, but nonetheless said he would stop those contributions.  Despite those promises, LGBTQ Nation reported that Levin continued to support anti-gay politicians and couldn’t verify his financial support to pro-gay politicians. 

High Times recently lost a court case regarding back rent owed on a planned dispensary space in San Francisco to the tune of $5 million. So no matter how much the company received for this sale, it likely came at a good time.

Looking Ahead

The magazine titles may have struggled to find an audience as gay and trans rights seemed to bloom under the Obama administration. However, the community is back under attack in the culture wars. Most recently the Texas GOP called homosexuality abnormal, sparking fresh fears of discrimination. The gay community may begin seeking out these publications again in order to inform of new legal attacks. 

In addition to the other named executives, Michael Kelley will become Chairman and President of Global Growth and Development reporting to Berryhill. Diane Anderson-Minshall, the first female CEO of Pride Media, will retain C-suite responsibilities as the Chief Global and Development Officer of Equal Pride focused on editorial brands and international audience expansion. Rounding out the leadership, Joe Lovejoy, will become Chief Financial Officer and Stuart Brockington has been upped to EVP of Sales and Partnerships, effective immediately. Equal Pride 2022 clients include: General Motors, Google Pixel, Gilead, Capital One, Disney/Hulu, TikTok, McDonald’s, Molson Coors, NBCU, J&J and many others.

“We could not be more excited about the opportunity to join forces with Equal,” Diane Anderson-Minshall said as she assumes a role in leadership with expanded duties on global content growth. “This combination will not only create an unparalleled scale with the most diverse and engaged audiences for advertisers as well as other strategic revenue opportunities, but it will also bring together some of our community’s top talent, the most popular media brands, and the most impactful content in the world. This is the beginning of our most exciting chapter.”


StaffJune 21, 2022
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Harvest Health or rather Trulieve since it bought Harvest Health must be heaving a sigh of relief that it’s High Times on the hook for the rent at Geary St. in San Francisco. Before it was acquired Harvest Health had tried to quickly jump into the San Francisco market by signing numerous agreements. One of them was with Alexis Bronson from the Have A Heart 2 CA LLC  as a social equity licensee for a dispensary at a prime shopping spot on the famous Geary Street.

Touted at the time as snagging a spot in the luxury shopping street, neighbor Chanel boutique protested. This was early 2020 and right before the pandemic struck. However, Harvest Health didn’t waste much time on some of the assets including 152 Geary and flipped some of its properties to High Times who was anxious to diversify into dispensaries. Soon thereafter, COVID took hold and San Francisco’s downtown has yet to recover. The problem with retail rental contracts is that many of them can’t be broken with covid blame. Something High Times has learned the hard way.

Cannabis Law Report wrote that on May 31, a judge found that Vijaya Properties (High Times) owes the building owner $4.9 million in back rent. The dispensary was never opened and to add insult to injury, the building is only worth $20 million. The landlord Thor Equities actually wanted $5.9 million, but the judge said that since the landlord basically took the $1 million in a credit facility that was somewhat like a deposit, that money would be subtracted. 

The judge noted that a tenant can get out of a lease if another tenant comes along. The landlord could ask the current tenant to leave and replace them and in effect take back possession. But 152 Geary hasn’t done so and so High Times is stuck. Geary St has experienced some scary smash and grab robberies this past year that were so frightening that police were blocking the street from car traffic as closing hours came near. So it’s no surprise that with crime and a depleted downtown along with a moribund retail scene the landlord probably couldn’t find a tenant willing to pay that much. 

There was also nothing in the rental contract that gave High Times an “out” in case it never opened the dispensary.

The trial had no jury and was handled remotely. High Times or Vijaya Properties as it’s listed in the case did not dispute the money owed. Side note – Vijaya is a botanica plant with medicinal properties and shares a lineage with cannabis.


Debra BorchardtApril 25, 2022
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High Times is celebrating the four-year anniversary of its IPO filing by once again extending the offering. This time it’s being extended to June 30, 2022. Not that anyone can buy any stock. The company was told by the SEC that it couldn’t sell any more shares until it posted updated financial information, which it hasn’t.

The extension was filed on April 1 and listed the Chair Adam Levin as the Chief Executive officer. Now, this may just be an oversight, but in January Paul Henderson, the company’s President and interim Chief Financial Officer was appointed to the position of CEO and a director on the Company’s board of directors. Mr. Henderson was also to continue in his roles as President and interim Chief Financial Officer. There is no mention in this offering extension that Henderson is the CEO. 

The filing states that an “Investor acknowledges and agrees 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. Investor must bear the economic risk of this investment indefinitely and Investor acknowledges that Investor is able to bear the economic risk of losing Investor’s entire investment in the Shares.”

IPO Extensions

Many of High Times investors wonder how this can keep going on year after year. Well, according to the SEC guidelines, “Continuous or delayed offerings are permitted, although Regulation A limits the types of delayed offerings permitted under the exemption and is not available for at-the-market offerings.” 

But surely there is some time frame around this? A company can’t just keep on offering open in perpetuity right?

The SEC won’t comment but does point to this – “Before the end of such three-year period, an issuer may file a new offering statement covering the securities. The new offering statement must include all the information that would be required at that time in an offering statement relating to all offerings that it covers. Before the qualification date of the new offering statement, the issuer may include as part of such new offering statement any unsold securities covered by the earlier offering statement by identifying on the cover page of the new offering circular, or the latest amendment, the amount of such unsold securities being included. The offering of securities on the earlier offering statement will be deemed terminated as of the date of qualification of the new offering statement. Securities may be sold pursuant to this paragraph (d)(3)(i)(F) only if the issuer is current in its annual and semiannual filings pursuant to Rule 257(b) (§ 230.257(b)), at the time of such sale.”

That last sentence is why High Times can’t currently sell any more shares. The company hasn’t posted any financial information since 2019. Last year, the company’s CEO Peter Horvath hinted that those documents would be coming shortly and even suggested that April 20th would be a fine day for that to happen. That day came and went as did Mr. Horvath.

Having said that, High Times has been busy beyond the publication of news, although to be fair, it doesn’t publish very much fresh news daily. 

High Times Dispensaries

High Times had announced in 2020 that it was getting into the dispensary business, which was certainly hopeful news to these investors. The company announced it was buying dispensaries from Harvest Health & Recreation, which was then acquired by Trulieve (OTC: TCNNF). These investors were hopeful that the stock if it ever went public, would benefit from the revenue of these dispensaries. High Times had said it would be opening branded stores licensed to be named High Times and according to the website, there are six locations in operation. All the stores are located in California. 

Of the six dispensaries, Four are still licensed with the owner Ryan Kunkel and the Have A Heart brand. The other two – the Shasta Lake location does list High Times Holding Corp. as the owner and Synergy located in Redding is also listed as a HighTimes property with Levin and Henderson listed as the contacts. the information on who holds the licenses comes from Cannabiz Media. The company also owns Mountain High Delivery. In Michigan, High Times branded products are sold.

The question for investors is how much revenue will the company get from stores that are only using the name and not actually owning the license. Still, it is revenue that investors are likely hoping will boost the value of the company. 

Events

High Times has also resurrected its famous Cannabis Cup. However, while the company lists four upcoming events, it isn’t clear if there is an in-person event at any of these. Michigan has definitely stated it is a virtual awards program.  There are four states listed as hosting a Cannabis Cup, but the website only states the date of an awards ceremony for each state.

Events had been the big moneymaker for High Times in the past. These were all-day affairs with music and vendors that attracted thousands of party-goers. The events brought in millions of dollars, but that was before Levin took over. Now “judges” pay for the backpack full of products to try and rate, so really the only companies that can win are companies that sponsor the backpack. In the past, it was more like a country fair with experts judging the products and now it is public crowdsourced judging. 

While the Cannabis Cup in-person events have seemed to retreat, the Emerald Cup was happy to step in and take its place. Based in Northern California, this group hosts a Harvest Ball following the harvest season. The actual awards will be given this May in Los Angeles. The group has said that having a festival at harvest time was hard on the farmers and so it decoupled the awards from the ball. These winners are judged from a group of experts – like the Cannabis Cup of the past. 

Another new entrant to this type of cannabis competition is Hall of Flowers. Starting as a brand showcase, the HOF team also gives out awards. This could be the new version of the modern cannabis cup and if so, steals what had been a major moneymaker for High Times.

In Closing

There are several Reddit boards hosted by disgruntled High Times investors. These are small investors that believe their money has gone up in smoke. They receive little communication from the company they invested in and one Reddit author has claimed to have started a class-action suit against the company. It’s anyone’s guess whether the stock will trade or not, but it does seem like High Times manages to survive no matter what. In other words – don’t count them out. 


Debra BorchardtJanuary 20, 2021
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Psychedelic publisher Delic Holdings Inc. has begun trading its shares on the OTC Marketplace at roughly 45 cents per share. DELIC shares will continue to trade on the Canadian Securities Exchange (CSE) under the symbol CSE:  DELC, and now adds a U.S. trading component. The process was through a reverse takeover of Molystar Resources.

Former High Times Executives

Many of the top executives at Delic are former High Times employees. CEO Jackee Stang was once the Vice President of Content and Programming for High Times from November 2015 to October 2018. Director Kraig Fox was the former Chief Executive Officer and President of High Times Holding Corporation from April 2019 through December 2019. Fox was to lead High Times into becoming a public company, which hasn’t happened as of yet.

Matt Stang, Founder of DELIC said, “Now that DELIC is fully listed on the OTCQB, and has attained DTC eligibility for trade, we’ve made it significantly easier for US-based investors who are intrigued by the emerging psychedelic sector to buy shares in our growing company. This is an important step in our plans to tell our compelling story to a wider audience and materially grow our investor base across multiple markets.”

Delic’s business is comprised of four distinct segments: The Delic, Reality Sandwich, Meet Delic, and Delic Radio, which when put together, form the basis of a leading media platform in the psychedelics sector. The company did not produce any revenue in 2019. Total revenues for the period ending in June were $72,964. The net loss for that period was $143174. The company’s liabilities are $868,326. Jackee Stang is paid $120,000 and CFO Matthew Lee is being paid $44,000.

Delic’s Businesses

Through its various business segments, Delic provides educational and cultural information on the psychedelics space through various channels, including news, articles, commercial products, videos and podcasts as well as events and happenings in the sector, including films and art events. The educational topics explored by Delic’s various business segments include: arts, consciousness, sexuality and science, in the broader context of psychedelics. Via its podcast, Delic Radio, and other online platforms, Delic interviews leading experts in the field in psychedelics, including medical doctors and researchers who are able explain and educate visitors on the potential benefits of psychedelics.

The Delic generates revenue from merchandise sales of artwork, clothing and accessories posted on the website’s online store. Reality Sandwich currently operates purely as an informative website that discusses the potential benefits of psychedelics as well as other current affairs related to the topic, and it does not currently generate revenue. Similarly, Delic Radio does not currently generate revenue. Delic believes that as the topic of psychedelics becomes more prevalent and interest in the topic increases, there will be opportunities to sell paid advertising and receive sponsorship on a go-forward basis on The Delic, Reality Sandwich and Delic Radio. In regards to Meet Delic, the bi-annual event, Delic anticipates that it will be able to generate revenue from ticket sales, with average ticket prices of US$200, as well as sponsorship of the event, with average sponsorship fees of US$2,000.

Path To Public Company

Delic was formed under the laws of the State of Delaware on March 7, 2019 to address the growing interest in psychedelic science. The company was formed as the first psychedelic umbrella media platform and is currently a source for those interested in psychedelic science. Delic is a media, eCommerce and event company, and is not currently in the business of psychedelics or psychedelics research. Since the formation of the business, Delic established “The Delic” in May 2019. The Delic is an eCommerce lifestyle brand. The Delic showcases and sells artwork and apparel related to the brand. The Delic expects to grow sales going forward through search engine optimization and other measures to bring online and brand awareness.

On May 15, 2019, Delic acquired Reality Sandwich. Reality Sandwich is a free public education platform with over 10,000 pieces of content, serving up psychedelic guides, news, and culture. According to Delic company statistics, in 2019 there were between 500-800 daily users and over 20,000 monthly users on the site. In 2020, the number of users has increased to between 800-1,200 per day and there over 26,000 users per month. Page views in the last 12 months have been over 900,000. In May 2020, Delic had planned to launch “Meet Delic”.

Meet Delic is a biannual event that is a psychedelic wellness summit inspired to bring the worlds of wellness and psychedelic science together where thoughtful conversation about psychedelics can be had, at a state of the art venue in Los Angeles, California, bringing together thousands of attendees from all over the world. Due to the Covid-19 pandemic, both events in 2020, for the May and December dates, have been canceled until 2021. On June 1, 2020, Delic entered into an advisory agreement with Intrynsyc Capital Corporation to act as Delic’s corporate financial advisor on an ongoing basis. Pursuant to this agreement, Delic agreed to issue 750,000 Delic Shares to Intrynsyc prior to the close of the Transaction. In addition, Delic retained the services of a consultant, 1173225 B.C. Ltd., and has agreed to issue 262,500 Delic Shares in satisfaction of the services provided, prior to the close of the Transaction.

 


Debra BorchardtJune 23, 2020
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Harvest Health & Recreation Inc. (OTCQX: HRVSF) said that it has completed the initial closing of certain retail properties in California to Hightimes Holding Corp. as previously announced on April 28, 2020, and June 12, 2020. The deal was recently amended from the original 13 operational and pending properties to ten. Those terms have now been reduced to a deal now valued at $67.5 million. The terms are now $1.5 million in cash and a $4.5 million one-year promissory note with 10% interest and $61.5 million in Series A Preferred stock issued by Hightimes Holding Corp.

$4.5 million was due at the initial closing according to the SEC filing. The second closing, though is subject to various closing conditions and contingencies including third party and regulatory approvals. Harvest and its affiliates said they plan to sell additional equity and assets with respect to two planned dispensaries in California for a total consideration of $6 million in Series A Preferred Stock issued by Hightimes.

One of those third parties, Alexis Bronson says he hasn’t heard from High Times Chairman Adam Levine since the deal was originally announced. The property that he has gotten his license for is on Geary Street in San Francisco next to a Chanel boutique. The rent for the high-end location is an eye-popping $2.1 million a year. Bronson said that another cannabis MSO (multi-state operator) expressed interest in the location until seeing the rent and then backed out saying it was too rich.

High Times is well aware of the challenge it faces in trying to convince Bronson to come on board. In the purchase agreement, High Times acknowledged that “Harvest Health is currently engaged in litigation in the State of Washington with Kunkel which may affect the ability of Seller to obtain the Third-Party Approvals.” Ryan Kunkel is Bronson’s former business partner. He sold his half of the property without Bronson’s approval to Harvest Health, who in turn sold it to High Times. Several of the other Have A Heart dispensary properties have third parties in addition to Kunkel and there is no indication from these parties as to whether they are on board with High Times or not.

Original Terms

In the original purchase agreement, High Times was supposed to pay at the closing (a) USD$12,500,000 in cash inclusive of the Contract Deposits and (b) 675,000 shares of Hightimes’ 16% Series A voting convertible preferred stock. The Series A Preferred Stock has a value of $100.00 per share or $67.5 million. Other shareholders might not know that the Series A Preferred Stock has a priority on liquidation or a change of control of Hightimes over any
other series of preferred stock created by Hightimes or its Common Stock. Beginning in September 2020, the Preferred Series A was to begin the 16% payments. High Times paid $1 million in the initial deposit and owed $4 million 45 days from the effective date.

Publisher Woes

High Times has not reported any financial information on the company since June 2019. Due to the pandemic, all in-person events have been canceled. This was the main revenue producer for the company. The publisher also hasn’t printed a Dope or Culture magazine in months and this also accounted for a respectable source of advertising income. The flagship publication High Times is up-to-date online with its stories, but the last print edition looks to be April 2020. The company laid off writers and said that the loss of walk-in traffic to dispensaries caused it to suspend printed editions for now. Print magazines in general have struggled as the costs outweigh the consumers buying magazines.

The company has also experienced a revolving door of executives in the C-Suite with former Green Growth Brands CEO Peter Horvath becoming the latest to take on the role. His retail experience is seen as a strong point as the company pivots from publishing to retail.

Harvest Health Keeps Four

Harvest will retain four operating dispensaries located in Grover BeachNapaPalm Springs, and Venice and select licenses for potential retail locations in California following completion of this planned divestment.

 


AxisWireMay 15, 2020
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New York City – May 15, 2020 /AxisWire/ AxisWire, the first newswire distribution service and digital PR tech-suite dedicated solely to the cannabis industry, and Green Market Report (GMR), the cannabis industry’s source for credible in-depth financial reporting, have announced The State of Cannabis Media 2020 virtual conference. The event will take place online Tuesday, May 19th at 1 pm EST. 

Tickets are limited, but the event will be live-streamed on GMR social media and will also be shared on the GMR news site following the event.

This free virtual conference will be open to the public and will address the current state of affairs for companies who would like to understand how to utilize digital communications, PR, and media to advance their messages in a time when no events can support or promote cannabis brands. 

“Events were the main source of exposure for cannabis brands as advertising remains largely off-limits to our industry,” explained AxisWire & Green Market Report co-founder Cynthia Salarizadeh. “When this pandemic took over, it left our industry and most cannabis brands who do not have the support of a public relations firm without many options. We felt the best way for us to provide some guidance was to create a free virtual event where brands can hear directly from journalists and PR professionals about how to navigate during these times.”

The panelists include the top cannabis journalists from Business Insider, Adweek, Forbes, Benzinga, Marijuana Business Daily, High Times, El Planteo, and the author of The New Chardonnay as well as the CEO’s and Managing Partners of Mattio Communications, GVM Communications and KCSA Strategic Communications. 

1:00-1:05 Introduction

1:05-1:10 State of Journalism 

1:10-1:25 State of Public Relations for Cannabis 

1:25-1:35 Suggested Avenues for Brands on a Budget 

1:35-1:50 Story Focus During A Pandemic 

1:50-1:55 Prioritizing Cannabis Stories 

1:55-2:00 Closing Remarks

“Online screen time has increased as many of us are in various states of lockdown, which has increased the demand for content. Unfortunately, media companies have been forced to scale back as a result of the pandemic creating huge disruption in the supply and demand for news,” said Green Market Report CEO and Co-founder Debra Borchardt. “We believed that an event like this was needed as we all pivot and adapt to a new normal in the cannabis industry. We are stronger together.” 

About AxisWire:

AxisWire, headquartered in Los Angeles, is the industry’s first tech platform designed for cannabis entrepreneurs to expose their brands and cannabis journalists to seek out breaking stories. The platform provides a newswire distribution and PR tech suite of services including press release distribution, press release writing, consulting and compliance services. AxisWire also features the STAR Source Locator specific to the cannabis industry to assist in facilitating story development between journalists and brands. For more information, please visit axiswire.com. Follow us on social media @AxisWire.

About Green Market Report:

The Green Market Report (GMR) is headquartered in the Financial District of New York City with an office in Los Angeles. GMR is poised to be the center for trustworthy business, financial and economic news and intelligence. The site offers coverage on financial matters including news briefs on business, cultivation, and extraction, cannabis company stock prices, and wholesale cannabis pricing. For more information, please visit www.greenmarketreport.com or email info@greenmarketreport.com. Follow us on Facebook, Instagram and Twitter @GreenMarketRpt.

 


Debra BorchardtMay 6, 2020
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CEO Stormy Simon is out at Hightimes Holding Corp. after just four months. Former Green Growth Brands (OTC: GGBXF) Peter Horvath is in. This is the third CEO for the iconic publisher High Times in just 13 months as the company pivots away from events and news and instead heads towards the dispensary side of the industry.

“We are pleased to welcome Peter to the High Times family, and to be able to tap into his wealth of experience capitalizing on major consumer brands. There are few executives with his retail experience in the mainstream world and, up to this point, none in the cannabis world with such an accomplished background,” Hightimes Holding Corp. Executive Chairman Adam Levin said. “The team and I would like to thank Stormy for all of her hard work in getting us through this transition period, and we are excited to have her continue working with us on this mission to grow High Times into all the business areas it helped create.”

Horvath’s Track Record

The High Times press release notes that Horvath previously held leadership roles for companies such as L Brands (Victoria’s Secret, Bath & Body Works, etc. ), American Eagle Outfitters (American Eagle & Aerie), and DSW (Designer Shoe Warehouse) and that he was with DSW when it went public on the NYSE in 2005. It also mentioned that he formed Green Growth Brands and took it public on the CSE in November 2018. It even touts his launch of Seventh Sense CBD. What it doesn’t mention is that Horvath was forced to resign recently and left without his million-dollar severance package after the company burned millions of dollars on Seventh Sense. The chain was closed in March and attempted to not pay the laid-off employees their back pay until Green Market Report exposed the story. 

“High Times is a unique brand with an important and rich heritage that deserves amplification and broader reach,” stated incoming Chief Executive Officer Peter Horvath. “I think of brands like Glossier, who first earned high affinity followers through compelling and relevant content, and then demonstrated that you can also serve their followers through commerce.  So, it’s been done before, I wouldn’t suggest that it will be easy, but we have all the resources to succeed.”

Victoria’s Secret is also about to go under. The once-thriving leader in women’s lingerie miscalculated its customer base’s move away from the over-sexualization of women. As women were moving away from body shaming and embracing all shapes and sizes, Victoria’s Secret was slow to recognize the seismic shift, and competitors began to take market share. The company recently tried to sell itself to a private equity firm, but the sale has fallen through. With retail in a tailspin due to the COVID-19 lockdown, it’s future is unclear.

CEO Revolving Door

It’s highly unusual for companies planning to go public to have a revolving door of CEO’s. A potential publicly-traded company typically wants to project an image of stability in order to show shareholders that their investment is in good hands. The Horvath hire is meant to align with High Times’ recent acquisition of pending and operational licenses from  Harvest Health & Recreation (OTC:HARV). His retail background seems more suitable to chairman Adam Levine’s vision for High Times dispensaries versus the previous CEO Stormy Simon.

Simon was just hired in January with her previous experience at e-commerce brand Overstock.com as the reason she moved from her position as a board member to the role of CEO. At the time of her hire, High Times said it was creating a virtual distribution business alongside its physical businesses of dispensaries and consumption cafes. The company signaled that Simon wasn’t necessarily in charge as the recent announcement with Harvest Health did not include her whatsoever. It’s highly unusual for a company CEO to not be quoted in an acquisition press release or be included in the purchase documentation. Her absence sent red flags that something was underway. It’s unclear whether Simon remains on the board. She is currently running for state representative in Utah.

Levine stepped down from the CEO role when Kraig Fox stepped in to lead the company through its efforts to go public and shift towards a plant-touching business. Fox was hired in April 2019 and left nine months later.  Fox’s background as a Senior Managing Director of Guggenheim Partners where he focused on Guggenheim’s overall strategy in the media and entertainment spaces as well as the management of its media and entertainment investments was seen as an asset.

Fox continues to receive his director and officer insurance policy, and High Times agreed to reimburse Fox for certain previously incurred business expenses (within five days) of successful completion of sales of an additional $5 million of equity securities or $10 million of proceeds from the sale of debt securities. He is expected to be reimbursed $125,000 with respect to expenses and lease payments for which Fox provided the company with receipts.

Harvest Health Deal

High Times did acknowledge that its deal to acquire the licenses from Harvest Health was subject to certain closing conditions, including the receipt of certain regulatory and third-party consents. The parties are aiming to close the acquisitions no later than June 30, 2020, subject to the parties’ mutual agreement to extend the closing date.

There is a major problem with one of the Have A Heart dispensaries that High Times is buying from Harvest Health. One license belongs to the HAH San Francisco location in which CEO Alexis Bronson says Harvest Health had no right to sell. Bronson owns 40% of the HAH dispensary and he claims his business partners sold their shares to Interurban Capital Group (ICG) without his approval. The dispensary was then flipped to Harvest Health & Recreation, who just sold it to HHI Acquisition Corp, a subsidiary of Hightimes Holding Corp.

The High Times Purchase Agreement acknowledges the Bronson position in HAH. The document states, “Neither ICG nor Harvest holds any rights to acquire the 40% interest held by Bronson. Assignment of Contingent Assignment requires the consent of the Board of Managers of HAH 2 CA LLC.” High Times was to deliver $1 million to Harvest Health on April 27 as a deposit and then another $4 million at the closing date or within 45 days of the effective date. High Times did not respond to a request to comment on the Bronson situation. Harvest is also suing ICG which adds even more complications to this deal.

The issue with this one particular license may not hold up the whole deal and if High Times can close at least some of the operational licenses then revenue can begin flowing into the company.

Delayed Reporting

High Times announced that it will delay delivering its annual report as per the SEC’s order which allows for this due to the COVID-19 virus.


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