Hightimes Holding Corp. told investors that it accepted the resignation of Kraig G. Fox as the Company’s Chief Executive Officer and President Effective December 24, 2019. On January 6, 2020, Stormy Simon, one of the Company’s independent directors and former President of Overstock.com Inc., was appointed to the position of Chief Executive Officer of the company by the board of directors. Following her appointment, she will also continue serving as a director on the Company’s board of directors.
The change is happening as the cannabis publication prepares to develop its physical and virtual distribution businesses. Having spent the last year acquiring Cannabis media publications and web sites, High Times now looks to monetize its audience of millions of users across the globe. Fox was just hired in April with the intent to finally bring the company public, a move that has been discussed for years at this point. Instead, the launch of the publicly traded stock got delayed again. 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 was also a founder and Chief Operating Officer of Core Media (previously CKX, Inc.) where he oversaw all operations of this publicly-traded company including Core’s interests in the estate of Elvis Presley and the intellectual property rights of Muhammad Ali as well oversight of its wholly-owned subsidiary, 19 Entertainment, which included American Idol (including television, records, lives tours, artist management and sponsorships) and So You Think You Can Dance. It was anticipated he would capitalize on the name brand of High Times through licensing deals.
Recently, Fox had suggested the company would pivot into consumption cafes and dispensaries and away from cannabis content. Now, it seems there is another pivot away from that idea and Fox has left.
“I’m honored to take on this role at such a pivotal time for this iconic brand. The cost of customer acquisition has plagued the cannabis industry thus far, but utilizing the High Times brand’s global audience, we should be able to monetize our traffic by connecting consumers to cannabis products at an unprecedented scale,” Stormy Simon stated. “Like millions of other people, I have trusted High Times for years and I can’t wait to use my experience to help develop the next iteration of our business: delivering the best products into consumers’ hands.”
Levin will remain in his role as Executive Chairman. He said, “Stormy Simon, who rose through the ranks at Overstock.com during her 15-year tenure with the company, has extensive international business relations and marketing experience and is highly skilled at breaking down and rebuilding departments. Stormy revolutionized Overstock.com’s marketing department, and then its customer service department, during an uncharted time in e-commerce history, eventually leading Overstock.com to increase its revenues from $20 million to over $2 Billion.”
According to the company’s filings, Ms. Simon will receive a base salary of $300,000 per year, payable in equal monthly installments, provided that the Base Salary shall initially be fixed at $215,000 and the remainder of the Base Salary shall accrue until, and be payable at, such time as the Company shall have raised an additional $10 million. In addition to the salary, Simon will get an annual bonus of up to $225,000 for each calendar year of her employment with the company depending on the High Times’ ability to achieve certain performance goals. She will also have an option to buy 200,000 shares of common stock at an exercise price of $11.00 per share. One-third of those options vest on January 6, 2020, and the balance of such option shares vesting in equal monthly increments over the remaining two year period.
Simon will also receive a $3,000 travel stipend for company travel between San Jose and Los Angeles for the first six months of employment.
Fox will continue to receive his director and officer insurance policy, and High Times agreed to reimburse Mr. 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.
It’s time for your Daily Hit of cannabis financial news for June 19, 2019.
On the Site
Charlotte’s Web Holdings
Charlotte’s Web Holdings, Inc. (TSX:CWEB)(OTCQX:CWBHF) reported its final hemp planting for its 2019 growing season. The company said that in order to meet growing demand the total acres planted for 2019 has been increased to 862, an 187% increase from 300 acres planted in 2018.
CannTrust Holdings Inc. (NYSE: CTST) shares popped over 5% in early trading on news that the company had formed a joint venture with California hemp grower Elk Grove Farming Company. CannTrust is a Canadian cannabis company founded by pharmacists and this would be the company’s entry into the United States. The company said it expects to invest roughly $20 million in the operation by the end of 2020. The shares were lately trading at $5.22.
Executive Spotlight: Kraig Fox, President & CEO of High Times Holdings
Not Even Close To OK !!! California, Cannabis & IBI (Inherent Bureaucratic Ineptitude)
The Times article describes yet another band-aid the Legislature is slapping on California’s maladroit roll-out of cannabis regulation. This particular band-aid is an emergency extension of time through a budget Trailer Bill. The Bill, which is opposed by environmental groups, extends provisional licensing.
In Other News
Canopy Rivers Inc. (TSXV: RIV) (OTC: CNPOF) announced that has made a $10 million investment and has entered into a strategic collaboration with ZeaKal Inc. ZeaKal is a California-based company with with proprietary technologies that reportedly increase photosynthesis, improve plant yield and enhance nutritional profiles for a variety of crops. “Our investment in ZeaKal, the fifth consecutive international transaction for Canopy Rivers, builds on our thesis of selecting globally scalable and innovative processes, products, and technologies from complementary industries, and applying them to the cannabis and hemp economy,” said Mary Dimou, Director of Business Development at Canopy Rivers.
Green Flower Media
Green Flower Media today announced that it has closed a $20 million Series A financing round. The financing round was led by Tuatara Capital and additional funding came from Poseidon Asset Management and Phyto Partners. The proceeds from the round will go towards developing new certificate programs, creating new content for its subscription service, expanding the company’s team, and forming strategic partnerships.
Innovative Industrial Properties
Innovative Industrial Properties, Inc. announced that it entered into an amendment of the lease with Green Peak Industries, LLC, largest vertically integrated medical-use cannabis license holder in Michigan. The amendment will make available an additional $18 million for Green Peak to expand its cultivation and processing facilities at 10070 Harvest Park in Dimondale, Michigan. “We are thrilled to expand our real estate partnership with one of the premier medical-use cannabis operators in the state of Michigan, another example of our position as a long-term real estate capital partner that our tenant operators can count on,” said Paul Smithers, President and CEO of IIP.
A veteran media and entertainment executive, Kraig Fox oversees High Time’s day-to-day operations, which now include Dope Magazine, Culture Magazine, Green Rush Daily, and a number of events, including the Cannabis Cup Festivals. Fox was once 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. Prior to joining Guggenheim, Fox was a founder and Chief Operating Officer of Core Media (previously CKX, Inc.) where he oversaw all operations of this publicly traded company including Core’s interests in the estate of Elvis Presley and the intellectual property rights of Muhammad Ali as well oversight of its wholly owned subsidiary, 19 Entertainment, which included American Idol (including television, records, lives tours, artist management and sponsorships) and So You Think You Can Dance.
Prior to Core, Fox was a founder of SFX Entertainment (now Live Nation) where he was Chief Development Officer from 1995 until 2000 overseeing the global consolidation of the live entertainment industry into the world’s largest owner and operator of live entertainment promoters and producers.
GMR Executive Spotlight Q&A –
Full birth name: Kraig Fox
Title: President and CEO
Company:High Times Holdings
Years at current company: <1
Education profile: I received my bachelor’s from SI Newhouse School of Public Communications at Syracuse University and my Juris Doctorate from Hofstra University School of Law
Most successful professional accomplishment before cannabis: Prior to my work in cannabis, I was a founder of what is now Live Nation and a Board Member of the Muhammad Ali Center
Company Mission: High Times’ mission is to connect cannabis consumers to endemic and non-endemic brands through our events, trade shows and digital assets.
Company’s most successful achievement: High Times is the only globally known brand in cannabis and has been connecting cannabis consumers with brands for nearly five decades. High Times has also been staging Cannabis Cup events for three decades and holds over a dozen live events a year spanning Europe, the United States and Canada, each of which draw tens of thousands of attendees who gather to celebrate the cannabis lifestyle, music and products. The Company recently expanded its international platform through its acquisition of Spannabis, one of the most prolific events in the cannabis ecosystem and one of the most well-known annual festivals within the EU.
Has the company raised any capital (yes or no): Yes
if so, how much?: Above $25M.
Any plans on raising capital in the future? Yes. We are currently finishing our highly successful Reg A + public offering and plan to list on a stock market shortly.
Most important 5 year company goal: Our focus will continue to remain on driving and growing our global brand presence.
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