Hightimes Holding’s Tie-Up with Humboldt Heritage Nixed
Hightimes Holding’s deal to acquire California-based cannabis cultivator Humboldt Heritage Inc. has gone up in smoke.
Financial terms of the proposed deal were never released, and no reason was given for the termination.
When the acquisition was announced in March, Hightimes executive chairman Adam Levin said it would give the media company access to more than 200 of “the best cannabis-producing farms in the world.”
For his part, Humboldt Heritage CEO Barry Nachshon said the deal would have given the company "unprecedented exposure to consumers as High Times reaches millions of people all over the world."
"Knowing that we will be part of the High Times family, as well as a key manufacturing and supply chain partner as the company enters the retail and delivery markets in California, is very exciting for our team," he said at the time.
Indeed, one month later, Hightimes formally announced its bold pivot into cannabis retailing via the agreement to purchase more than a dozen existing and planned dispensaries from Arizona-based multistate operator (MSO) Harvest Health & Recreation Inc.
That deal, a cash-and-stock transaction valued at $80 million, is expected to close no later than June 30, 2020. However, it’s unclear how the collapse of the Humboldt Heritage acquisition will impact Hightimes’ proposed foray into the dispensary channel.
Either way, June 30 is an important date for Hightimes, which has spent the last two years attempting to raise $50 million from both accredited and non-accredited investors via a regulation A+ IPO campaign.
The crowdfunding campaign has been extended numerous times, and it is now slated to end on June 30, at which point the company intends to execute an 11-for-1 forward split of its outstanding Class A common stock. That move will increase the number of shares of Hightimes Class A common shares from 100 million to 1 billion.
To date, the company has raised more than $20 million from over 30,000 backers via the crowdfunding effort.
Earlier this month, Hightimes hired Peter Horvath as its new CEO. Horvath, a former Victoria’s Secret and American Eagle executive who led Green Growth Brands for two years, supplanted Stormy Simon, who served as CEO of the struggling media company for just four months.
Horvath has a financial motivation to help get Hightimes’s fundraising effort over the hump. If he can help the company raise another $20 million, his annual salary will balloon to $400,000, from $100,000.