Cannabis and Cryptocurrencies have been connected for a long time now and that too for all the wrong reasons. It is one of the reasons that Bitcoin lost its image as the majority of it holders were drug dealers. But would take its image down is now offering an opportunity to help Bitcoin to restore its image. In one of the first cases, Legacy cannabis brand High Times has opened doors to fans and crypto investors by announcing that it would accept Bitcoin and Ethereum via Regulation A + stock offering.
High Times has been one of the most leading and trusted cannabis brands in the game since 1974, and an important beacon in the legalization activism game. As reported by CNBC on August 2, High Times Holding would become the first traditional stock offering ever to accept investments made in the company through Bitcoin and Ethereum. The iconic cannabis brand has begun accepting the leading cryptocurrencies during its current equity-crowdfunding process under Regulation A+ of the JOBS Act. If this goes through, High Times will achieve a couple first to its name- first cannabis-related brands to go public on the Nasdaq and the first to allow Bitcoin and Ethereum as part of our public capital raise.
According to High Times CEO Adam Levin,
“Beginning with our Reg. A+ crowdfunding, we’ve been focused on giving everyone from retail investors to long-time fans more ways to own a piece of High Times. While we didn’t believe that the ICO process was the right move for our brand, it would’ve been foolish to leave this emerging investor base out as we continue to transform into a diversified media, events and merchandise giant,”
“Cryptocurrencies have created a new investor base across the world – we’re just giving them more stable opportunities for investment.”
In late June, High Times filed its latest 1-A regulatory report with the U.S. Securities & Exchange Commission. The report details a $28.9 million reduction in negative equity, a significant decrease in operating losses, and a debt reduction and extension. The company has recently made a series of acquisitions and anticipates opening on the market in Q3 of this year.
High Times being merry with Cryptocurrencies has not made SEC happy. The regulator is still yet to come in terms with the new age cryptocurrency and is yet not completely convinced on how they fit into the current system of things. Hence It had expressed concerns after the company initially said it would accept bitcoin, which mainly revolved around whether High Times would directly receive cryptocurrencies. This made High Times to even make a filing on August 13 filing with the US Securities and Exchange Commission, High Times rescinded its statement that it would be accepting bitcoin (or any other cryptocurrency for that matter) as a form of payment from investors in return for stock in the company. The filing clarified:
“On August 3, 2018, the Company published a press release relating to its Regulation A+ offering stating that it would accept Bitcoin as a form of payment for subscription to the Company’s shares. This press release was distributed in error as the Company will not be accepting Bitcoin as payment for shares. As provided in the Company’s subscription agreement related to the offering, the Company will only be accepting check, credit card, ACH or wire transfer as payment for subscription to shares.”
But now it seems High Times has found a way out to accept Bitcoin and Ethereum. In the latest turn of event High Times representative, Jon Cappetta confirmed that the company is, in fact, accepting bitcoin and Ethereum as payment options but this time with a change. It has roped in Fund America as a third-party processor who will be taking the two cryptocurrencies and converting into U.S. dollars, which the company will then receive. In words of Cappetta
“We’re accepting [cryptocurrencies] as a payment option, but technically Fund America takes the bitcoin and Ethereum … It’s similar to the way if we were doing an international IPO, and we were accepting the pound or the euro, those guys aren’t accepting that money, they’re converting it to [dollars].”
Cappetta also said that the regulatory filing made on August 13 was made “to make the SEC happy.”
“On the legal side, it’s a lot of jargon. There’s no real easy way to spell it out. They issued the release to make the SEC happy,” he said.
Well exploiting the law and its loopholes is not a great way for High Times to proceed ahead and definitely would not make SEC happy. There is no response yet from the SEC yet but one can expect it could be a stern one.
Will the SEC let go the High Times Regulation A capital raise smoothly or will it retaliate the use of cryptocurrencies? Do let us know your views on the same.
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