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The parent company of cannabis publication and brand High Times as well as its board chair, Adam Levin, together paid more than $600,000 in fines to settle securities-fraud allegations connected to the business’ efforts to go public, federal securities regulators announced.
Hightimes Holding Corp. and Levin, 44, did not admit to any wrongdoing under a settlement agreement reached with the U.S. Securities and Exchange Commission.
But both agreed to pay fines last month in connection with the charges leveled by the agency.
Levin will now serve a three-year ban from serving as an officer or a director, according to the SEC.
Hightimes was formed in 2017 to acquire the rights to the legendary marijuana lifestyle magazine High Times and market its brands.
According to the SEC, Levin arranged for the company to provide cash, stock and perks such as bottle service and yacht rentals in Las Vegas and Miami to “a recidivist securities violator” named Jonathan Mikula, who ran an investment newsletter called Palm Beach Ventures.
In exchange, Mikula promoted the stock to newsletter readers, despite public claims he was not receiving compensation, the allegations said.
The SEC also filed charges against Mikula last year.
Hightimes “falsely represented to investors” that they could buy stock for $1 a share “when in fact they were purchasing for $11 per share,” the agency further alleged.
The SEC initially permitted Hightimes to begin selling stock in March 2018, but the company failed to file updated required financial statements with the SEC.
That meant Hightimes’ offering was unregistered with the SEC “from at least June 2020 through December 2022,” the agency said.
The company eventually sold “approximately” $13 million in Hightimes stock despite its delinquent status, according to the SEC.
Hightimes paid $558,071 and agreed to a cease-and-desist order while not admitting or denying any of the SEC’s allegations, the agency said.
Levin, 44, Hightimes’ former CEO and its current executive board chair, agreed to pay $11,614 and serve the three-year ban from serving as an officer or director.
Levin also neither admitted nor denied any wrongdoing, the SEC said.
Before the SEC’s announcement, Hightimes sold its intellectual property to Canada-based Lucy Scientific in an all-stock deal.