On Wednesday, October 30, the majority of DOPE Magazine’s editorial team in Seattle was laid off by parent company High Times, according to an anonymous tip received by Ganjapreneur. In what was described as a surprise move, 11 employees were fired in a complete restructuring of DOPE’s Seattle headquarters.
When asked about the layoffs, High Times CEO Kraig Fox confirmed in a written statement that the Seattle office had been shuttered, stating, “As we move the combined company forward, we made a strategic decision to shut down the Seattle office and consolidate all content creation out of our Los Angeles headquarters.” Fox also said that “A number of employees have accepted positions in our Los Angeles headquarters.”
According to the tip received by Ganjapreneur, only three individuals were offered positions in Los Angeles, and the recent lay-offs had been preceded by over a dozen employees being let go since High Times acquired DOPE in September 2018.
In separate announcements at the time, both entities expressed hopes for a collaborative future in which the DOPE brand maintained its core voice and style. The $11.2 million purchase of the Seattle-based B2C monthly cannabis magazine was the last in a flurry of B2C event production and media purchases by High Times’ corporate entity, High Times Holding Corp, which was established in 2016 when a group of investors acquired a majority stake in the business.
Regulation A Offering
In July 2018, High Times announced that they would begin selling shares of the corporation directly to non-institutional investors under Regulation A. Regulation A, commonly referred to as Reg A, is a series of rules under Title IV of the JOBS Act signed into law by President Barack Obama in 2012.
Under Reg A, non-accredited investors (people who aren’t millionaires) are able to buy equity in a business in small amounts directly from the company. Once financing is raised, the company is then able to use the funds to apply to list with NASDAQ and begin trading their shares; Reg A investors, however, are not protected if the company fails to gain approval by NASDAQ or falls short of its fundraising goals.
Mergers & Acquisitions
In April 2018, before their Reg A announcement, High Times purchased Green Rush Daily, an online B2B publication, for $7 million. They also partnered with Reggae on the River, a well-known Northern California music festival operated by the Mateel Community Center which was under financial stress, having lost $140,000 on the previous year’s festival. By July, High Times had also purchased CULTURE magazine for $4 million and DOPE magazine for $11.2 million, timing these announcements to coincide with the Regulation A offering which was advertised widely on social media and throughout the cannabis industry, including on Ganjapreneur.
In the context of the recent layoffs at DOPE, it is worth noting that many of High Times’ other projects have also encountered a significant amount of adversity. Reggae on the River 2019 was canceled and ticket holders were refunded, leaving the Mateel Community Center to attempt to rebrand in hopes of continuing to host the beloved event. CULTURE Magazine is still being published, but its former owner is suing High Times Holding Corp. for payment from the sale. Green Rush Daily is still in operation and appears to be managed by an Editor on the High Times team.
Regarding DOPE’s restructuring, Fox told Ganjapreneur, “Consolidating content and publishing activities under one central office is simply the most efficient way to manage growth and propel DOPE and our brands into the future.”
What does the future hold?
Fox declined to comment on the timeline for High Times’ planned public listing. Over a year after funding efforts began, more than $15 million has been raised and over 20,000 individual investors have bought stock via the Reg A offering. In spring 2019, High Times Executive Chairman Adam Levin commented that the company was still seeking a NASDAQ listing but in the meantime was considering Canadian exchanges or over-the-counter (OTC) trading in the United States. In June, Marijuana Business Daily reported that plans for a High Times NASDAQ listing had been shelved in favor of OTC after the company failed to meet its capital raise target. Numerous investors who bought stock via the Reg A offering have left comments on the article, wondering about the status of their investments and whether the listing is still being pursued. So far, High Times has not announced any timeline for a public exchange listing.