Hard times for high times
Amazingly, April came and went without the HighTimes Holding Company going public. Once again, the High Times leaders teased that beleaguered shareholders would finally see their stocks hit the public markets just to let the day come and go without anything happening.
CEO Peter Horvath said Cheddar News in February“Well, we’re definitely going to go public this year and I don’t want to tie it to a specific time, but 4/20 is a remarkable date in this industry … so I think that’s a goal.” Though he added that he couldn’t fix an official date for the company’s public debut. “We’ll see where we end up,” he said.
The company didn’t issue a press release at the time, and Horvath only spoke to Cheddar. No other news agency had this scoop, but then most of the cannabis media are skeptical of the High Times’ claims to go public.
Photo by David Gabrić via Unsplash
That 420 IPO proclamation came as a surprise as the company essentially shut down to sell its shares according to one story on the stock market Cannabis Law Report. History has reported that the company had not updated its financial statements since 2019 and the Securities & Exchange Commission (SEC) would not allow the company to sell more shares. Companies are required to provide up-to-date financial reports to investors with the SEC. The High Times made a fuss and threatened all reporters who wrote about the problem with legal action. However, the reporting was accurate and the company even stated on its most recent Form U-1 that the offer was pending until the updated financial statements.
Horvath told Cheddar reporter Chloe Aiello that the statements could come as early as March. That didn’t happen either. “Our audits are progressing. Our books are – by closing our books from the previous year – qualify us to move on, ”he said. “And that is imminent. We’re still a few weeks away from reconciling our ducks. “
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Horvath went on to say that the High Times was in a much better position than when the financial statements were last published in 2019, when the magazine recorded “recurring operating losses, net operating cash flow deficits and an accumulated deficit”. Horvath’s claim that the annual financial statements are only a few weeks away has also not come true. It is now May and no degrees have been published. Additionally, the updated bills would not include any portion of the company’s new revenue from the hub of the pharmacy business.
“The sales of our largest of three pharmacies are more than [High Times] They have been doing it for the past few years as a magazine and events company, ”he said. “So, I think that’s a pretty big fulcrum when all of a sudden, boom, there are assets that are generating income.”
Horvath’s big talk
Horvath and High Times seem to be made for each other. Both talk a big game and don’t deliver. Horvath was previously CEO of Green Growth Brands (GGB), which is no longer in business. Horvath had a background in retail with mainstream brands such as Victoria’s Secret and DSW. In the early days of the SCI, he often stated that he would show cannabis people how “retail is done”. He wasn’t shy about firing cannabis dispensary owners for not knowing what they were doing. Of course, many of these pharmacy owners thrive while Horvath plunged his company into the ground.
Photo by Elsa Olofsson via Unsplash
As CEO of GGB, Horvath consistently made business agreements in which GGB shares were used as a means of payment, e.g. for retail consultants. That stock is worthless now. High Times has also closed numerous deals where CEO Adam Levin paid with High Times stock. Stocks that are still not tradable and originally sold for $ 10 per share. High Times recently valued the stock at just $ 1 per share in certain business agreements.
Horvath announced with great enthusiasm in 2019 that he would be opening a chain of CBD stores in Simon Malls and selling products in DSW shoe stores. While he eventually opened over 100 stores, the chain went bankrupt as numerous employees claimed they had not been paid. High Times has also faced lawsuits in the past for failing to pay writers and employees.
Horvath made headlines when he announced major acquisitions like the purchase of Aphria (APHA), a company that turned down GGB’s offer and has just partnered with Tilray to become one of the largest cannabis companies in the industry. Then GGB said it was buying Moxie in an all-stock deal worth $ 310 million. This deal was canceled until December 2019. High Times also has a track record of gusto announcing acquisitions only to quietly make those acquisitions go away. Acquisitions like Spannibus and The Big Show never came about, and in some cases sellers complained that they received funds never promised, according to a big exhibition in Politico.
Photo by Kindel Media from Pexels
Green Growth Brands was $ 100 million in debt when it filed for bankruptcy. The shareholders had nothing. The NY Post once said the High Times had over $ 100 million in debt. However, the company hasn’t filed financial statements since 2019, so it’s hard to know what shape the company is in. So Horvath has experience with over $ 100 million in debt.
Horvath has been the High Times’ third CEO for as many years, and many believe he is not an acting CEO. For example, for deals recently announced by the High Times, the documents will be signed by Chairman Adam Levin, not Horvath.
The long-awaited inventory
At one point, CEO Adam Levin suggested in late December 2020 that the company would launch its stock in the first quarter of 2021. This prompted Cheddar to wonder when the stock would go public since the first quarter came with a no and went public. Horvath then hinted that High Times stock could go public in April, which has come and gone. Now the clock is ticking. In March, the company extended the offer until May 21, 2021.
High timeshas tried, or at least said, since 2017 that it was planned to list in the public markets. Expectations from a Nasdaq listing to the current mini IPO plan for the OTC markets have softened over time. The company’s long-awaited debut is subject to compliance with the Securities Exchange Commission, which requires updated financial reports to be filed and made available to investors.
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High Times cannot complete the offer, according to the Marihuana Business Dailyuntil it submits and publishes half-yearly reports for the end of 2019 and the first half of 2020. If the company publishes these financial statements, investors may not like what they see. The debt is expected to be enormous. The company has begun moving its lucrative assets to a separate subsidiary and no one knows if the original shareholders of the High Times Holding Company will be entitled to those assets. High Times said it has increased so far $ 35 million from more than 30,000 shareholders.
If High Times refuels with the final release of the annual financial statements, the company will at least be in experienced hands.