When Is High Times Stock Going Public

The Securities and Substitution Commission has told a U.S. operated cannabis media and clinic company, High Times Holdings, that they must halt accepting investments in their mini-IPO because they have failed to come across an extended deadline to file their audited annual written report.

The last date the visitor was immune to accept investments was the heart of June.

High Times is run by old venture backer,
Adam Levin, who says he once endemic soft porn video company
Girls Gone Wild
and Penthouse. Levin decamed to Puerto Rico two years agone where as a resident he can bask extremely favorable tax rates, according to InsideHook.

Authored past: Teri Buhl

High Times securities lawyers,
Stephen Weiss
and Megan Penick of 50.A. based Michelman Robinson LLP, confirmed in an email interview yesterday that the visitor tin can non accept sales until they get their annual report filed and publicly available for investors.

But, that hasn’t stopped High Times from continuing to pitch primary street investors interested in Cannabis to pony up their hard earned dollars via email solicitations for investments, according to marketing material seen by Cannabis Law Report sent by the company this week.

When chaser
Penick
was asked why the visitor was still soliciting investments she initially told Cannabis Police force Report, in an email sent on June seven, that she wasn’t aware that it was happening.

High Times used a reporting extension the SEC created because of the Covid-19 pandemic to get a 45 day extension to file the almanac report and said in recent SEC disclosure filings, called Class one-U, that they promised investors to get them current revenue, cash flows, debt levels and asset values by June 12, 2020 via the annual written report; but CLR has learnt that this never happened.

Adam Levin’s visitor has spent over two years trying to get main street to invest up to $US50 meg without a successful close date that could lead to publicly traded stock on the OTC Markets nether the ticker $HITM.

On June 30th, 2020 the company made an
SEC filing
announcing once again their mini-ipo would be extended for yet another three months but left out the important fact that they couldn’t actually accept sales.

When asked near the perceived lack of disclosure to investors, attorney Penick told CLR the SEC doesn’t require an issuer to disclose, the offer can’t be sold. CLR understands that Loftier Times didn’t undertake this.

Cannabis Law Report reached High Times escrow agent, Prime Trust, who said they were not aware that sales of the offering had been halted. As of press time they have non responded to CLR in order to ostend the sales had stopped as of June 12 2020.

When asked if it is normal practice for a Reg A issuer to continue to solicit investments when information technology can’t accept sales; securities chaser Sara Hanks told Cannabis Law Report,”

The SEC may take softened up in the Covid crisis but previously, both sales
and offers
were supposed to finish during such time equally the issuer was delinquent in its filings, because there is no exemption nether Reg A  for “offers” (advertisement etc) while a company is runaway.”

Attorney Hanks, who was one of the primal attorneys to work with the government to shape the laws and rules of the mini-IPO RegA+ offering, also pointed CLR to
legal advice
she wrote for small cap companies on what to exercise when you take to halt your offering. This includes taking down your online offering folio. As of press time, Loftier Times notwithstanding has their
investment offer
page live.

Attorney Hanks warns if investments sales are completed they could exist considered sales of unregistered securities. “If you take any money while you are not in compliance with the Reg A ongoing reporting requirements, you are making an unregistered offering in violation of Section five of the Securities Act of 1933, and people who buy in those circumstances have the right to make y’all have them dorsum and refund their money, with involvement. Plus, that unregistered offering may be considered a disqualifying “bad human action”, wrote attorney Hanks on
Crowdcheck.com.

Adam Levin did not respond for comment when reached by email asking why the company is notwithstanding soliciting offers.

In 2016 the Securities and Exchange Commision
went after
the one of the kickoff cannabis companies,
Med-X, to apply RegA+ to heighten capital letter and charged them with an enforcement action for standing to sell their RegA+ offering after they failed to timely file their annual report.

The SEC instance,
first reported
by this reporter for Growth Capitalist Investor, was closely followed because even later on Med-X got their almanac report filed, the SEC nonetheless didn’t want the company to be immune to raise capital through RegA+. Med-X eventually won the case, after nearly a year of litigation and expensive legal fees.

Regulation A+ was created through the JOBS Act for emerging growth companies to enhance coin from main street while requiring less financial reporting than a traditional IPO and Loftier Times appears to have taken advantage of that. The cannabis investing market often comments on how Adam Levin overpaid for the cannabis media assets in 2017 when his group of investors bought the magazine company from the original owners in deal valued at $70 million and funded through debt with high interest. He then publicly announced he’d go the company listed on NASDAQ just after failed.

Since so investors have seen a rapid pace of public announcements about asset purchases, via signed letter of intents, hyping the potential growth of High Times followed upwards with placidity SEC filings announcing the deals had either fallen apart or been watered downward.

A purchase of working cannabis dispensary stores and license in three U.S. states from publicly traded Harvest Health is the most recent example.  The original deal signed in April valued at $80 million included thirteen dispensary licenses and then last month it was announced High Times would simply be buying 10 licenses and they’d exist losing two working California dispensaries in the renegotiated deal.

Additionally, in the last month in that location have been multiple news reports questioning if Harvest even has ownership or control of the cannabis licenses to sell to High Times.

Very fiddling cash actually changes easily in the deals crafted by Loftier Times; instead it has announced millions of stock (which isn’t publicly traded still) will pay for the asset purchases. With the Harvest acquisition, High Times attorney Stephen Weiss confirmed for CLR that $ane.5 million was paid to Harvest but at signing only $500k was given. The asset purchase agreement filed with the SEC said High Times would pay Harvest $1 million on signing.

That leaves the question how the visitor, via advice from their attorneys, has kept investors informed of material changes in the company through scattered announcements via 1-U filing instead of updating their offering circular.

In an interview with attorney Weiss and Penick they repeatedly sworn, they understood  the fashion the company is disclosing cloth events is accepted by the SEC. Simply other attorneys interviewed by CLR with experience in writing RegA offerings question this narrative.

“The regulations for Reg A offerings all the same require an amendment at least once a year and upon whatever fundamental change, and this company appears to have had both and not filed amendments. And the rules do not permit the 1-U’s to be incorporated. Y’all can’t get effectually that by having an investor sign something. The SEC does not desire unsophisticated investors having to scour 1-U filings to find all the data scattered about. That’due south why they have that rule,”
an chaser who has worked on Reg A offerings for years told Cannabis Constabulary Report.

Later on multiple attempts to get attorney Weiss to site which SEC rule allows him to use U-i forms to disembalm material events he wouldn’t list ane.

Loftier Times initial offering circular dates back to events from 2017 that speak to the company operating as a media company. It wasn’t until recently that Adam Levin changed form and decided the company would move to becoming a cannabis retail dispensary company.

The company has also moved through three CEO’s in the last twelvemonth which lawyers who spoke with CLR considered a material issue. Loftier Times appears to have done what can be described equally a piece of work-around and filed what is chosen a

supplement

to the circular offering which wasn’t reviewed by the SEC instead of amending the offering which needs SEC approving.

When asked about this chaser Penick defensively informed CLR,” The offering circular supplement is the same every bit the offering statement, merely with a dissimilar cover page.
 The SECalways has the opportunity to review a document, make  comments and require the filing of an subpoena.  In this case, the SEC did not comment or inquire for an amendment.
Had a review commenced, the offering would not be qualified until such time as the review completed.”

High Times attorney Weiss likewise offered an explanation that they can’t file an subpoena to the original offering because the visitor doesn’t have 2019 financials audited yet. But why that inspect hasn’t happen isn’t clear given the visitor appears to accept money to buy other cannabis assets merely is unable become an inspect done.

Cannabis analyst Alan Brochstein of New Cannabis Ventures told Cannabis Police Study, the …

“High Times extended Reg A offering is but a fleecing of main street investors.”

Attorney Weiss and Penick have repeatedly told Cannabis Constabulary Report they think High Times is in compliance with SEC rules and confirmed that they have had exact conversations with the SEC about High Times missing their annual report borderline.

Loftier Times hasn’t fabricated recent public announcements well-nigh how much they have actually raised through their mini-ipo. The last SEC filing from 2019 said as of April 30, 2019 the visitor had raised $15 one thousand thousand of their $50 one thousand thousand goal.