High Times Archives - Page 3 of 4 - Green Market Report

Debra BorchardtNovember 6, 2018
hightimes-1.jpg?fit=668%2C400&ssl=1

5min32231

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.


William SumnerOctober 4, 2018
hightimes-1.jpg?fit=668%2C400&ssl=1

3min20160

The United States largest radio broadcaster is getting into cannabis. According to a report in The Wall Street Journal, iHeartMedia Inc. (IHRTQ) has entered into an agreement with High Times Holding Corp. to provide up to $10 million in advertising inventory in exchange for a five percent stake in High Times.

Under the agreement, High Times will have access to iHeartMedia’s creative services, as well as its digital and radio advertising inventory. High Times will use this access to advertise for the company’s Regulation A+ offering. The company is offering up to 4,545,454 shares of Class A common stock with an offering price of $11.00 per share. With a goal of $50 million, High Times so far has raised $12.5 million from more than 9,000 investors.

With approximately 855 radio stations and more than 110 million listeners every week, iHeartMedia is by far one of the largest radio broadcasters in the United States. In 2017, iHeartMedia reported $6.17 billion in revenue; which makes the company’s investment in High Times seem somewhat small in comparison.

However, the deal marks a turning point for both the cannabis industry and High Times. When High Times was first launched in 1974, cannabis was illegal in all 50 U.S. states, and the general public had an overwhelmingly negative opinion of the substance.

More than four decades later, the cannabis industry is one of the fastest growing markets in the United States, with corporate giants like Constellation Beverages and iHeartMedia making significant investments within the industry.

In addition to the Regulation A+ Offering, High Times is expected to list its stock on the Nasdaq Stock Market by the end of October or early November. In preparation for the listing the company’s stock on the Nasdaq, High Times has been on an acquisition spree; including Green Rush Daily and Culture Magazine. Most recently, the company acquired Dope Media for $11.2 million.


StaffSeptember 25, 2018
daily_hit004.png?fit=1200%2C500&ssl=1

5min11950

It’s time for your Daily Hit of cannabis financial news for September 25, 2018.

On The Site

Aurora Cannabis

Aurora Cannabis Inc. (ACBFF) released its fourth quarter and fiscal year-end financial results following the market close on Tuesday. For the fiscal year ending 2018, Aurora reported total revenue of C$55 million versus fiscal 2017’s total revenue of C$18 million. The net income for the year was C$69 million versus the previous year’s loss of C$12 million. Aurora also reported a gross profit of C$43 million for the year versus last year’s gross profit of C$16 million.

For the fourth quarter of 2018, the company reported that its revenue increased 223% to C$19.1 million from last year’s C$5.9 million for the same time period. Fourth quarter net income increased to C$79 million, versus a net loss of C$20 million for the previous year. It was 16% better than the previous quarter’s revenue of C$16.1 million. Gross margins improved to 74% from the third quarter’s gross margin of 59%.

High Times

Longtime cannabis publication High Times has acquired print magazine Dope Media in a deal valued at $11.2 million. The deal is a combination of stock and cash. High Times has been building a portfolio of cannabis titles including Green Rush Daily and Culture. High Times said that there would be no staff changes at this time. DOPE’s CEO, George Jage, founders Dave Tran, James Zachondi, and Evan Carter will all remain.

Scott McGovern, the founder of Green Rush Daily was named Executive Vice President at High Times when his company was acquired. However, McGovern is already out of the company and only worked at High Times for about a year. He is now the Co-founder of a blockchain news site call Blockler.

Separately GeekWire reported that cannabis review website Leafly ousted its CEO Chris Jeffrey, who wasn’t even in the position for a year. Privateer Holdings that owns Leafly issued this statement to Geekwire,” “This morning the Board of Directors of Leafly removed Chris Jeffrey from his role as Chief Executive Officer. The Board made the decision to replace Mr. Jeffrey as CEO after careful consideration due to concerns about his management of the company.”

In Other News

Green Thumb Industries Inc.

Green Thumb Industries Inc. (CSE: GTII) (OTCQX: GTBIF), a national cannabis consumer packaged goods company and owner-operator of the high growth national retail chain RISE™ dispensaries, today announced that it has entered into an agreement with a syndicate of underwriters led by GMP Securities L.P. to purchase, on a bought deal an aggregate of 3,250,000 subordinate voting shares  of the company at a price of CAD $20.00 per Offered Security for aggregate gross proceeds of CAD $65 million. The deal is expected to close on or about October 17.

KushCo Holdings

KushCo Holdings, Inc. (KSHB) has entered into a strategic transaction with Smoke Cartel (SMKC) to sell Roll-uh-Bowl, an online distribution platform for retail sales of collapsible and unbreakable medical-grade silicone water pipes. KushCo will transfer ownership of all Roll-uh-Bowl assets, including inventory, branding materials, the website, and social media, in exchange for shares of Smoke Cartel valued at $1,500,000 plus the value of inventory. KushCo will also build a referral landing page into the Kush Bottles website to direct customers to Smoke Cartel when searching for wholesale glass & smoking accessories.


Debra BorchardtSeptember 25, 2018
hightimes-1.jpg?fit=668%2C400&ssl=1

7min58380

Longtime cannabis publication High Times has acquired print magazine Dope Media in a deal valued at $11.2 million. The deal is a combination of stock and cash. High Times has been building a portfolio of cannabis titles including Green Rush Daily and Culture.

“DOPE is a very strategic acquisition for our portfolio offering key complementary assets to our existing platforms and opening the opportunity for economies of scale to improve the performance of all our entire publication group,” said Adam Levin, CEO of High Times. The statement also noted that Dope holds its largest Dope Cup events in Seattle and Portland and the company sees this as an additive event to the existing Cannabis Cup events where High Times earns a majority of its revenue.

High Times said that there would be no staff changes at this time. DOPE’s CEO, George Jage, founders Dave Tran, James Zachondi, and Evan Carter will all remain. Jage, was once the President of Marijuana Business Daily and the driving force behind Marijuana Business Conference [MJBizCon], has received numerous distinctions for his work including the Nevada Entrepreneur of the Year award from In Business Magazine, Jerry Valen Award of Distinction “Hospitality & Convention Executive of the Year” and most recently was on the cover of Trade Show Executive in May 2017 following receiving the award for the Fastest Growing Tradeshow in the U.S. for two consecutive years.

“This is the perfect marriage of two like-minded businesses. As the largest cannabis consumer media company, High Times offers immense visibility across the country, and globe, like no one else in the space,” said George Jage, CEO of DOPE Magazine. “Utilizing their expertise we will be able to rapidly expand our footprint across the country and offer state-specific advertising solutions at a speed that wouldn’t have been possible before.”

Scott McGovern, the founder of Green Rush Daily was named Executive Vice President at High Times when his company was acquired. However, McGovern is already out of the company and only worked at High Times for about a year. He is now the Co-founder of a blockchain news site call Blockler.

Crowdfunding

Just a week ago High Times said that it had received subscriptions and funds in excess of $5,000,000 from investors which enabled it to complete the $5 million financial milestone in its proposed maximum $50.0 million Regulation A+ offering of up to 4,545,454 shares of Class A common stock at an offering price of $11.00 per share.  High Times also decided to extend its deadline for investing in the company to October 31, 2018.

Levin said the company had received support and purchases from over 6,000 investors. With 6,000 investors only bringing in $5 million, many of these investors must be on the small side. The company did not provide clarification on the average amount invested.

High Times never did close on its deal with Origo Capital. If you’ll recall, Origo Acquisition Corp. (OACQ) filed to change its name to High Times Media on December 29, 2017, and convert from a Cayman Islands company to a Nevada corporation and change its symbol. Origo merged with High Times Holding Corp., the publisher of High Times Magazine in July of 2017. Following the merger, the company has applied to be listed on the Nasdaq exchange under the symbol HITM. Its been months since the two companies announced a merger, but it has yet to close. The deal deadline continues to be extended. Levin has said it could still happen.

Leafly Ousts CEO

Separately GeekWire reported that cannabis review website Leafly ousted its CEO Chris Jeffrey, who wasn’t even in the position for a year. Privateer Holdings that owns Leafly issued this statement to Geekwire,

“This morning the Board of Directors of Leafly removed Chris Jeffrey from his role as Chief Executive Officer. The Board made the decision to replace Mr. Jeffrey as CEO after careful consideration due to concerns about his management of the company. The Board has full confidence in Leafly’s senior leadership team and has initiated a search for a new CEO. Out of respect for CJ and the contributions he has made to Leafly, we are not going to go into detail about the circumstances surrounding his departure.

Leafly is experiencing rapid growth with more than 150 employees on the ground in 5 countries and 7 states. The health of Leafly’s business and the strength of the company’s team are stronger than ever before. Leafy has positive momentum and we have never been more excited about the global growth prospects in front of the company.”

Leafly has been receiving a lot of attention as its fellow Privateer company Tilray (TLRY) has taken the cannabis stock market by storm. Cowen & Co. analyst Vivien Azur has said she believes that Tilray’s access to Leafly’s data will help the company stay on top of consumer trends.

Leafly hasn’t been able to deliver as big of a footprint as its competitor WeedMaps, but then Leafly has chosen to not work with unlicensed operators. Jeffery cut back on headcount when he came to the company and boosted engineers to improve the company’s technology.


William SumnerAugust 9, 2018
daily_hit004.png?fit=1200%2C500&ssl=1

5min11410

It’s time for your Daily Hit of cannabis financial news for August 9, 2018.

On the Site

High Times

The longest-running marijuana media company High Times is launching an unfiltered “over-the-top” online streaming-video product called High Times TV. The channel is live now on tv.hightimes.com and available as an app for iOS, Apple TV, Android, and Roku. HTTV  was created in order to give a home to the best cannabis-related videos across the internet. In turn, creators and fans will get a much-needed resource to find entertainment and information that continues to come under fire from traditional outlets that have tried to restrict content featuring marijuana. You may recall that recently, YouTube began deleting Spanish language cannabis related channels.

Canopy Growth Corporation

Canopy Growth Corporation  (CGC) has acquired all of the remaining outstanding shares of its Chilean in-market entity, Spectrum Cannabis Chile SpA . According to the statement, in exchange for Cannagrow SpA’s 15 percent interest in Spectrum Cannabis Chile SpA, Canopy Growth paid cash of US$750,000. Prior to the acquisition, the Company controlled 85 percent of the issued and outstanding shares of Spectrum Cannabis Chile SpA.

In Other News

Terra Tech Corp.

Today, Terra Tech Corp. (TRTC) reported its financial results for the second quarter, ending on June 30, 2018. Revenue for the quarter rose 11% from $7.8 million during the same period in the previous year to $8.7 million. The company’s net loss also rose from approximately $500,000 to $11.4 million. Cash on hand slightly declined, falling from $5.4 million as of December 31, 2017, to $5.2 million. “During the second quarter of fiscal 2018 we focused on both growing topline revenues, which reached $8.7 million for the quarter, and investing in building out infrastructure to support our longer-term growth strategy,” commented Terra Tech CEO Derek Peterson.

The Green Organic Dutchman Holdings Ltd.

The Green Organic Dutchman Holdings Ltd. (TGOD) announced that is has chosen Shopify to build its e-commerce platform for medical cannabis and future recreational cannabis sales. Shopify is slowly becoming one of the leading sources in the cannabis industry for e-commerce solutions. The company has already entered into agreements to build e-commerce platforms for Aurora Cannabis, The Hydropothecary Corporation, and the provincial government of Ontario. “We are pleased to announce this agreement with e-commerce giant Shopify,” said Csaba Reider, President of TGOD. “We see tremendous value in this relationship and Shopify will play an instrumental role in our ability to rapidly scale and provide our premium organic cannabis to global markets.”

Cronos Group Inc.

Cronos Group Inc. announced that it has entered into a supply agreement with Cura Select Canada, Ltd. In terms of revenue, Cura is one of the largest cannabis companies and is best known for its Select Oil and Select CBD brands. Cronos has signed a five year take-or-pay supply agreement in which Cura will purchase a minimum of 20,000 kilograms of cannabis per year from Cronos Growing Company Inc., which Cura will use to develop and manufacture cannabis extracts and products. “We are thrilled to be partnering with one of the cannabis industry leaders in extraction technology and value-added products,” said Mike Gorenstein, CEO of Cronos Group. “This supply agreement is the start to a synergistic collaboration for our newly created entity Cronos GrowCo and through the structure with Cura, is the type of creative and forward-thinking partnership that is at the core of industry-leading infrastructure that Cronos seeks to establish.”

 


Debra BorchardtAugust 9, 2018
hightimes-1.jpg?fit=668%2C400&ssl=1

5min98450

The longest-running marijuana media company High Times is launching an unfiltered “over-the-top” online streaming-video product called High Times TV. The channel is live now on tv.hightimes.com and available as an app for iOS, Apple TV, Android and Roku.

HTTV  was created in order to give a home to the best cannabis-related videos across the internet. In turn, creators and fans will get a much-needed resource to find entertainment and information that continues to come under fire from traditional outlets that have tried to restrict content featuring marijuana. You may recall that recently, YouTube began deleting Spanish language cannabis related channels. 

With a heavy focus on the end user, High Times partnered with Unreel to help develop HTTV apps. The platform has been integrated with Unreel’s digital ad networks – including Roku and Google Ad Manager – in an effort to create new monetization opportunities for creators in the space. Notable talent already using the platform include CustomGrow420, StrainCentral, Ruffhouse Studios, High Rise TV, Stoner Mom, The Green Market Report and That High Couple with new content from Now This Weed, Doug Benson’s ‘Getting Doug with High’ and more coming soon.

“While High Times has built a powerful subscriber base across print, digital and social media, it’s not enough to just produce content for those platforms,” said High Times CEO Adam Levin. “The huge demand for mobile-friendly premium video includes a real hunger for the cannabis-related content that social-media sites are all too often blocking. High Times’ new channel intends to satisfy that hunger, ensuring that we can reach our loyal audience wherever they may be, on whatever platform they use. It’s another way to serve our fans.”

Through a standalone, ad-supported web channel, High Times will aggregate and curate the best of that content in one place, providing a one-stop shop for fans and brands alike to connect with the best of Cannabis creative content. High Times TV will feature such content as cultivation and extraction lessons, comedy shorts, behind-the-scenes exclusives from High Times’ Cannabis Cup events, and vlogs from some of the industry’s most notable influencers

“Even in 2018, the truth about cannabis use is being silenced by major platforms,” said Joshua Young, founder of StrainCentral. “Social Media doesn’t want us to exist and propaganda is ruining society’s views on a harmless plant. Just as High Times has done since the 70’s, we’re here to provide a voice for the unspoken, and to champion this gift of the earth.”

“HTTV allows society to see actual insight into cannabis use and its users, and provides us creators with the means to keep up the fight,” said Young. “In a time where YouTube is demonetizing, and Instagram is purging our pages, High Times is a safe space.”

High Times recently launched a crowd funding campaign as it continues its plans to become a publicly traded company. Initial indications were that the company was met with a positive response from retail investors eager to get in early on a cannabis IPO.

 


Debra BorchardtJune 19, 2018
hightimes-1.jpg?fit=668%2C400&ssl=1

7min22450

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. 

 


Debra BorchardtApril 18, 2018
Leaf.jpg?fit=960%2C640&ssl=1

6min21672

Several cannabis media companies have completed deals with valuations rising in the category making the group a hot ticket.

Canopy Growth Invests In Civilized

Civilized Worldwide Inc. announced that it executed a strategic investment and collaboration agreement with Canopy Rivers Corporation which is an affiliated strategic investment partner of Canopy Growth Corporation (TWMJF). According to the statement, Canopy Rivers will invest C$5 million in Civilized via a convertible debenture and the companies will work together on various online, media and event mandates relating to the cannabis industry.

“Civilized lives at the intersection of modern media and cannabis,” said Mark Zekulin, President of Canopy Growth. “They have a premium digital audience throughout North America and have established an events platform where individuals and industry can communicate and work together as we continue to educate stakeholders and evolve the global perception of cannabis.”

Civilized is aggressively implementing its monetization strategy across its three platforms: Civilized.life: a sophisticated news and entertainment website that reaches 2 million unique visitors per month throughout North America. Civilized Studios: a multi-platform video content network curating, publishing and producing broadcast-quality video and original content pertaining to the all things cannabis. Civilized Events: a platform to provide exclusive branded experiences for both the cannabis industry and consumers – from intimate dinner parties with industry executives and opinion leaders, to large-scale events such as the first-ever World Cannabis Congress to take place in Saint John, New Brunswick June 10-12, 2018 (worldcannabiscongress.com).

High Times Acquires Green Rush Daily

Long-time cannabis lifestyle publisher High Times announced the acquisition of Green Rush Daily. Terms of the deal were not released, but it was previously noted that it was an all-stock transaction. High Times said that Green Rush Daily would continue to operate independently, but would be considered part of the High Times stable of brands like the Cannabis Cup.

According to the High Times Preliminary Prospectus, on August 31, 2017, THC entered into an online sales representative agreement with Green Rush Daily Inc. “Under the terms of the agreement Green Rush appointed Trans-High as Green Rush’s exclusive sales representative with respect to (a) all advertisements to be sold or otherwise offered to third-party advertisers on the Green Rush websites, and (b) all advertisements for display to retail and wholesale channels on the websites. All fees received from advertisers on the Green Rush website are to be split 70% to THC and 30% to Green Rush. In a related development, THC entered into a three-year employment agreement with Scott McGovern, the owner of Green Rush, under which Mr. McGovern became Senior Vice President of Publishing of the THC Group. In partial consideration for obtaining the online sales representative agreement, Hightimes Holding issued to Scott McGovern an aggregate of 577,651 shares of Class A Common Stock.”

Javier Hasse reported that the deal was valued at $7 million. Hasse said that McGovern received $500,000 in cash and suggested if the IPO goes through at $11 a share then his shares would be worth $6.4 million.

PROHBTD Values Itself At $25 Million

Video media company PROHBTD launched in 2015 and raised $2 million in 2017. The company announced it was raising $5 million in Series A equity round with a valuation in excess of $25m.

“We’ve raised $2 million in private, outside capital from a group of investors, including actor Donald Glover. We were able to connect with people who all believed in what we are doing and saw this as a valuable opportunity. We’re also working with Ackrell Capital out of San Francisco so right now is a great time in terms of creation and job opportunity. We have 30 full-time employees and numerous contractors.”

Dope Magazine

Dope Magazine based in Seattle has been rumored to have also raised additional money from investors but it hasn’t been announced yet as to the amount or who the investors are. Dope Media is a cultural cannabis magazine that was founded in 2011 by David Tran, Trek Hollnagel, Evan Carter, James Zachodni and Nathan Chrysler. The company is backed by Hypur Ventures and Poseidon Asset Management.


Debra BorchardtApril 5, 2018
CC.jpg?fit=960%2C504&ssl=1

5min55910

Long-time cannabis lifestyle publisher High Times announced the acquisition of Green Rush Daily. Terms of the deal were not released, but it was previously noted that it was an all-stock transaction. High Times said that Green Rush Daily would continue to operate independently, but would be considered part of the High Times stable of brands like the Cannabis Cup.

“Green Rush Daily has built a large, loyal audience and is innovating coverage of Cannabis-related news, culture, business and much more,” said Adam Levin, CEO of High Times. “Adding Green Rush Daily to the High Times family strongly enhances our editorial coverage, online presence, audience type and advertiser reach. The deal will significantly benefit the advertisers and readers of both High Times and Green Rush Daily.”

Green Rush Daily was founded in 2015 by Scott McGovern, who is also a Senior Executive Vice President at High Times. Prior to entering journalism, McGovern was a financial advisor with a company named Horner Townsend & Kent.

According to the High Times Preliminary Prospectus, on August 31, 2017, THC entered into an online sales representative agreement with Green Rush Daily Inc. “Under the terms of the agreement Green Rush appointed Trans-High as Green Rush’s exclusive sales representative with respect to: (a) all advertisements to be sold or otherwise offered to third-party advertisers on the Green Rush websites, and (b) all advertisements for display to retail and wholesale channels on the websites. All fees received from advertisers on the Green Rush website are to be split 70% to THC and 30% to Green Rush. In a related development, THC entered into a three-year employment agreement with Scott McGovern, the owner of Green Rush, under which Mr. McGovern became Senior Vice President of Publishing of the THC Group. In partial consideration for obtaining the online sales representative agreement, Hightimes Holding issued to Scott McGovern an aggregate of 577,651 shares of Class A Common Stock.”

McGovern’s agreement also allowed him to terminate the deal if High Times did not become a public company by March 31, 2018, whether through an IPO or the proposed merger with Origo.

High Times Back Story

High Times has gone through several changes over the past several months. In early 2017,  the family estate that owned the magazine sold it to a group called Oreva Capital, led by Adam Levin in a deal valued at roughly $70 million. That deal required the company to take on a lot of debt with a balloon payment due this year. Then in July of 2017 High Times Holding Corp., the publisher of the magazine said it was going public on the NASDAQ (NDAQ) through a definitive merger agreement reached with Origo Acquisition Corporation. In the statement regarding the Green Rush Daily acquisition, the company said it expected that process to conclude in the second quarter of this year.

NASDAQ has never publicly commented on whether it would allow High Times to list at the exchange. It has though attempted to delist the company Origo, for various things like having too few shareholders or not holding an annual meeting. As recently as February 20, 2018, the NASDAQ tried to delist High Times/Origo for “non-compliance with certain requirements,” but High Times appealed and so the stock that trades as OACQ remains at NASDAQ pending the outcome of the appeal process.

Last month, the company filed an 8K for an extraordinary shareholder meeting on March 12, extending the date to consummate the deal between Origo and High Times to June 12, 2018.

Debt

High Times owes $17.6 million in payments this year alone. $8.7 million in long-term debt obligations, $2.8 million in interest payments, $6 million in convertible note obligations and $72,000 in lease commitments. To partially finance the High Times Group acquisition, Hightimes Holding, Trans-High and each of the other members of the High Times Group executed a loan and security agreement with ExWorks Capital Fund I, L.P. The loan is now $11.5 million.

 


Debra BorchardtJanuary 26, 2018
shutterstock_376790377.jpg?fit=960%2C640&ssl=1

6min37217

High Times Holding Corporation (OACQ) issued a preliminary prospectus on Thursday to raise $50 million at a price of $11 a share. The company is highly dependent on getting listed on the NASDAQ exchange in order to meet its capital raising goals. To meet the NASDAQ listing requirements,  High Times will need $17.2 million from this offering. At the minimum, the company is raising $5 million, with the ability to go to $50 million.

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. It made a down payment of $2.7 million but was staring at this huge looming payment due in months. The merger with Origo Acquisition was expected to be closed months ago and the stock would’ve been listed on NASDAQ and all would be good. Instead, the merger has dragged on for months and the clock has been ticking away. The idea is that the company will now have a new note of $12.2 million due in February 2021.

In the offering, High Times said, “We intend to complete or terminate this Offering of our Class A Common Stock prior to seeking to consummate the Origo Merger.”

The Back Story

Hightimes Holding Corp. was established in December 2016 to acquire Trans-High and the THC Group. Founded in 1974, the THC Group published the famous High Times magazine and sponsored the Cannabis Cup events. The deal was valued at $70 million. Then, Hightimes Holding entered into a merger agreement, dated August 4, 2017, as amended on September 25, 2017, with Origo Acquisition Corp., a Cayman Islands corporation whose shares are currently listed on Nasdaq under the symbol ORAC. This was the way that High Times would become a NASDAQ listed company. This deal was valued at a whopping $250 million.

The planned merger has failed to close and has a March 2018 date set for the final month to complete the deal. NASDAQ has tried to boot the group out of the exchange. First for not having over 300 shareholders and then for not holding an annual meeting in 2016. Each time, the company has filed an appeal. Even if the merger is completed, it’s no guarantee NASDAQ will keep High Times as a listed company.

The Debt Mountain

High Times owes $17.6 million in payments this year alone. $8.7 million in long-term debt obligations, $2.8 million in interest payments, $6 million in convertible note obligations and $72,000 in lease commitments.

To partially finance the High Times Group acquisition, Hightimes Holding, Trans-High and each of the other members of the High Times Group executed a loan and security agreement with ExWorks Capital Fund I, L.P. The loan is now $11.5 million. This is the debt referenced above that the company is trying to push out to a later date.

Hightimes Holding also issued $30,000,000 of purchase notes to the former stockholders of THC. If the purchase notes do not convert into Class A Common Stock, High Times will owe the former stockholders of THC quarterly installments payments of $1.5 million, plus accrued interest, with a final payment of $16.5 million due on February 28, 2020.

As of September 30th, the company reported total assets of just $3.55 million, but the debt is listed at $38.6 million and with total liabilities of $46.7 million.

How Can It Pay This Debt?

In the offering, High Times says, “During the three-year period from 2014 to 2016, the net income of THC and its subsidiaries declined from $3,421,592 in 2014 to net loss of ($2,926,000) in 2016. For the nine months ended September 30, 2017, the consolidated net loss of the Hightimes Group was ($15,955,000).”

It went on to state, “Although $6,689,000 of the net loss for the nine months ended September 30, 2017 resulted from a non-recurring non-cash stock compensation charge, and an additional $2,744,000 non-cash charge for debt discount and change in derivate value for the same period, High Times Group is anticipating a return to profitability commencing in the fiscal year 2018.”

High Times has noted that ad sales for the magazine have declined and it plans on increasing the lucrative Cannabis Cup events in order to bring in more money. Still, there are a limited number of states and countries that will allow these types of events. Multiple events in some states will end up saturating the calendar and losing the appeal of the events.

It’s A Nail Biter

High Times said, “Unless Ex Works significantly extends the maturity date of our obligations to such senior lender or we are able to refinance such indebtedness we will have to apply at least $12.7 million of net proceeds of this Offering to retire such indebtedness. As at the date of this Offering Circular, we have no binding commitments from ExWorks to extend the August 28, 2018, maturity date of the ExWorks loan or from a third party investor or lender to refinancing such ExWorks loan.”

 


Don't Miss This Week's Groundbreaking News

Join the thousands of subscribers who stay informed with GMR's exclusive news briefs delivered directly to your inbox every Friday afternoon.

We respect your privacy. See our privacy policy.


About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


READ MORE



Recent Tweets

@GreenMarketRpt – 1 day

We will be live blogging from all week. Head to the website – link in bio – if you didn’t m…

@GreenMarketRpt – 1 day

⁦@PelorusEquityGr⁩ Upsizes Offering To $1 Billion

Back to Top

Don't Miss This Week's Groundbreaking News

Join the thousands of subscribers who stay informed with GMR's exclusive news briefs delivered directly to your inbox every Friday afternoon.

We respect your privacy. See our privacy policy.