High Times refreshes IPO plans as cannabis companies build buzz on Wall St
19/06/2018 13:00
By April Joyner
June 19 (Reuters) - The company that owns High Times, a
magazine devoted to marijuana culture, announced on Tuesday that
it is launching an equity crowdfunding campaign ahead of its
application for an initial public offering on Nasdaq later this
year.
The campaign is intended to bolster the valuation of
Hightimes Holding Corp while offering non-institutional
investors greater access to shares than they would have in an
IPO, said Adam Levin, the company’s chief executive.
For the offering, Hightimes has set a price of $11 per
share, 10 percent below the price the company expects the shares
to trade on Nasdaq. The company also announced that former
Mexican President Vicente Fox would join its board of directors.
The company announced its intention to go public last July,
as Reuters first reported. urn:newsml:reuters.com:*:nL1N1KI0UU
Its renewed push for an IPO comes as marijuana companies
have gained a foothold on Wall Street. Two Canadian companies,
Cronos Group Inc CRON.O CRON.TO and Canopy Growth Corp
CGC.N WEED.TO , debuted this year on Nasdaq and the New York
Stock Exchange, respectively.
Innovative Industrial Properties Inc IIPR.N , a San Diego
real estate investment trust that owns medical-use cannabis
facilities, went public in 2016.
U.S. cannabis companies face a roadblock to listing on the
major exchanges. Marijuana remains illegal under U.S. federal
law, though more than half of all U.S. states have legalized it
for medical or recreational use. In Canada, however, medical
marijuana is legal, and its senate recently voted in favor of
allowing recreational use of the drug. urn:newsml:reuters.com:*:nL2N1T823X
MassRoots Inc MSRT.PK , a Denver cannabis social media
network, unsuccessfully applied to list on Nasdaq in 2016. Levin
said Hightimes has gained pre-clearance from Nasdaq. As a media
company, it does not directly grow or distribute marijuana,
though it runs events at which vendors have sold cannabis
products.
A spokeswoman for Nasdaq declined to comment on Hightimes or
whether U.S. federal law would bar it from listing on the
exchange.
Levin said the U.S. debuts of Cronos and Canopy Growth
signal a growing acceptance of the industry.
“The landscape is much different than it was several years
ago,” he said. “When we initially filed, it was a big risk
factor. No companies had been listed on the Nasdaq or the NYSE.”
He also pointed to the White House’s statement in April that
the U.S. federal government would not crack down on states that
have legalized marijuana as another positive sign. urn:newsml:reuters.com:*:nL1N1RQ22O
Cannabis is still a budding industry: spending on the plant
worldwide is projected to reach just $12.9 billion, according to
Arcview Group, a cannabis investment and research firm. Canopy
Growth, the largest Canadian marijuana grower, has a U.S. market
capitalization of about $6 billion.
Legal and regulatory barriers have limited funding
opportunities for companies in the space, Isaac Dietrich, the
chief executive of MassRoots, said.
“Investors are looking for a pathway to liquidity, and that
pathway is being cut off,” he said.
But others in the industry are hopeful as more cannabis
companies have found their way onto U.S. exchanges.
Derek Peterson, the chief executive of Terra Tech Corp
TRTC.PK , based in Irvine, California, which grows and sells
cannabis, said the company has taken steps to prepare for a
listing on a major exchange, such as undergoing a reverse stock
split on the over-the-counter market to boost its share price.
Investors’ search for deal flow in a sluggish IPO market will
lead to greater acceptance of marijuana companies, he said.
“When the opportunity opens up, there will be a tremendous
amount of institutional capital chasing it,” Peterson said.
“It’s just a matter of time.”
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
'High Times' ready to roll with public offering urn:newsml:reuters.com:*:nL1N1KI0UU
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by April Joyner in New York;
Editing by Lisa Shumaker)
((April.Joyner@thomsonreuters.com; +1 646 223 7480; Reuters
Messaging: april.joyner.thomsonreuters.com@reuters.net))