Not So High Times

You’re reading this week’s edition of the New Cannabis Ventures weekly newsletter, which we have been publishing since October 2015. The newsletter includes unique insight to help our readers stay ahead of the curve as well as links to the week’s most important news. We no longer send these by email as we did in the past, but we post this and all of the newsletters on our website here.

Friends,

Last week, the United States Attorney’s Office issued a press release about famous cannabis industry magazine publisher High Times, revealing that Adam Levin had agreed to plead guilty to a felony. Hightimes Holdings, the owner of High Times, was trying to go public a while ago, and Levin, the founder and chairman, was one of several executives that made payments to Palm Beach Ventures, an investment newsletter, to tout the IPO. “In exchange for the favorable articles in the newsletter, Levin admitted he paid $150,000 via wire transfers, as well as tens of thousands of dollars for entertainment expenses.”

We launched New Cannabis Ventures in 2015, and we published an article about High Times then, pointing to David Kohl being named CEO. He succeeded Michael Kennedy, who became Chairman. This seemed like a big move for the company. Kohl brought in a COO in early 2016 who was also big in mainstream media.

While it was very interesting to see High Times magazine evolving, Kohl left less than a year after he joined in April. Chairman Kennedy had died near the beginning of 2016. High Times was sold in 2017 and moved from New York to Los Angeles. Adam Levin of Oreva Capital became CEO. Shortly later, we ran a press release from Hightimes Holdings that it was aiming to go public with a NASDAQ listing through a reverse-merger that was supposed to close in December 2016.

The reverse-merger with Origo Acquisition, a SPAC formed in 2014, did not take place. In August of 2018, the agreement was terminated, and Origo announced that was redeeming its cash to shareholders. Earlier in 2018, Hightimes Holdings began offering 4.55 million shares at $11 in late January. This was a Reg A+ offering that valued the company at $340 million. My article suggested that there were few assets and lots of debt, plus there was little growth and a large operating loss. In early February, I warned that investors should beware cannabis companies aggressively soliciting investment, and the article began with a mention of the Hightimes Holdings offering.

I continued to write about Hightimes Holdings, reviewing its annual filing for 2017 when it was published in April and then discussing the plunging sales in Q1 in June. The company acquired Dope Media for $11.2 million in cash and stock in September 2018.  While I was skeptical of the company and its plans, we interviewed Levin and published a summary in October. In December, it converted $28.6 million in debt and reported it had already raised $13.2 million at $11 per share. It suggested that the deal to go public would close on or before  the end of January.

In early 2020, Hightimes Holdings gave up on its NASDAQ IPO fantasy in favor of going public on the OTC, and it also disclosed that Story Simon had become CEO with Levin becoming Executive Chairman. In April, we published the last article on this company, discussing how Harvest Health had sold is California retail cannabis operations to Hightimes Holdings for $80 million in cash and preferred stock. The deal closed in June for a revised $67.5 million. These dispensaries were operated for a while, but some were closed down. This was reported by another long-time skeptic of the company, Teri Buhl.

We warned cannabis investors a long time ago about not only Hightimes Holdings but also several other cannabis companies that were seeking funding. While the cannabis industry is no longer hot, we remain focused on calling out any scams. High Times was a great brand that became a huge cannabis scam, and we did an excellent job of pointing this out. At least the government was able to stop the fraud from continuing.

Sincerely,

Alan

New Cannabis Ventures publishes curated articles as well as exclusive news. Here is what we published this past week:

Exclusives

Michigan Cannabis Sales Decrease in December

Financial Reports

Tilray Q2 Cannabis Revenue Falls 2% From a Year Ago

Capital Raises

Ascend Issues $15 Million in Debt

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