The U.S. Securities and Exchange Commission has reportedly told Hightimes Holding Corp. to halt its initial public offering after the company missed a June 12 deadline for filing its audited annual report.
Attorneys Stephen Weiss and Megan Penick of Michelman Robinson LLP — who both work as securities lawyers for High Times — confirmed to Cannabis Law Report‘s Teri Buhl that the company cannot accept additional sales until the annual report is filed and publicly available for investors. The most recent High Times annual report was filed in June 2019 and showed that the company had raised just $15 million of its $50 million goal.
High Times has been technically barred from accepting any new sales and, when Buhl asked about the company’s marketing materials in early June, Penick said she was unaware the company was still pitching to investors.
In an SEC filing by High Times on June 30, meanwhile, the company announced yet another extension of its IPO but failed to mention that it was not allowed to accept new sales due to having missed the audit deadline earlier that month.
“The SEC may have softened up in the Covid crisis but previously, both sales and offers were supposed to stop during such time as the issuer was delinquent in its filings, because there is no exemption under Reg A for ‘offers’ … while a company is delinquent.” — Securities attorney Sara Hanks, via Cannabis Law Report
Ultimately, the company’s Regulation A offering has drawn a mixed bag of criticism and hesitant excitement from the cannabis space.
— Alan Brochstein, CFA (@Invest420) June 30, 2020
The High Times brand was sold in 2017 to Los Angeles-based Oreva Capital, headed by Adam Levin, for $70 million. The High Times IPO was first announced in July 2018 under the federal Reg A exemption. Since then, the company has gone through three different CEOs, announced a major pivot from media and events to the business of cannabis retail, carried out a flurry of acquisitions, and has been the target of multiple lawsuits over unpaid debts.
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