EXCLUSIVE: High Times Extends IPO Offer to June but Expects Listing in a Few Weeks

High Times Regulation A Offer Formally Extended to June 30; Shares Likely to List Much Sooner

By John Jannarone

The parent of High Times magazine has formally extended its offer to the general public to June 30, but the shares are likely to list in the next few weeks, a person familiar with the matter told IPO Edge.

At the time of the IPO, investors who have already bought shares at $11 each will have the opportunity to sell them at a public offering price, which could be higher, the person said. High Times has made a string of acquisitions in recent months, sometimes issuing new shares. With roughly 31 million shares outstanding, the company has a valuation of around $350 million.

By leaving the offer open even after the stock lists, the company will retain an option to sell more shares to any investor under a so-called shelf. However, High Times would have no obligation to do so and may not sell any more shares.

In early December, High Times said it had raised $13.2 million from its IPO. Assuming investors continued to purchase shares at around the same rate since then, the company has probably raised at least $15 million.

In addition to cash from the sale of shares, High Times recently converted $28.6 million of debt to equity.  That transaction dramatically reduced the company’s leverage and gave it scope to acquire some complimentary businesses.

For instance, High Times bought Spain’s Spannabis conference in January for $7 million. Spannabis will host its 16^th annual industry conference in Barcelona this March.

High Times operates the renowned Cannabis Cup events along with Reggae On The River and the High Times Business Expo. The company also recently acquired DOPE Media for $11.2 million. DOPE has regional publications along with Dope Cup events that complement Cannabis Cup events. In December, Hightimes bought Buyers Industry Guide, owner of the BIG Show industry conferences. The B2B tradeshows gather twice annually in Miami and Los Angeles with over 10,000 industry guests annually.

A conference rollup strategy is smart for High Times on multiple counts. First, can use its existing sales infrastructure across events, reducing costs. The High Times brand is also stronger than any other in the industry, so more attendees may take interest in the events with the new affiliation.

Formally known as Hightimes Holding Corp., the company is raising up to $50 million in a Regulation A+ IPO open to all investors. The complete offering details are available at the company’s investing portal here. The company plans to use the IPO proceeds to invest in growth across both existing and new business platforms.

High Times has several other growth engines beyond conferences. For instance, until current management took over, the company had neglected to pursue a serious digital strategy. The company’s plans include the recent launch of an over-the-top streaming service that’s akin to a Netflix of cannabis, reflecting a fresh push to monetize the High Times brand.

The cannabis industry has drawn attention from investors and blue-chip companies in recent months as legalization in more U.S. states creates growth opportunities. Big Tobacco leader Altria recently announced a $1.8 billion investment in Cronos Group in December. Also, beer company Constellation Brands recently increased its stake in Canopy Growth with a $3.8 billion investment in the Canadian cannabis grower, a deal that surprised investors.