High Times workers left in the dark after California stores close
More bad news from High Times Holding Co., with reports that the owners abruptly closed at least three of its branded dispensaries in California last month.
According to former employees and internal communications obtained by CRB Monitor, the March 25 closures come after months of financial troubles, including failure to pay taxes, rent, and employee health insurance premiums.
The shuttered dispensaries are located in Blythe, San Bernardino, and Coalinga. Workers were allegedly left without severance pay, and a portion were still owed back wages.
Some employees resorted to taking cannabis products from the stores as compensation, while others reported being unable to access needed medication due to unpaid health insurance premiums.
Former employees, speaking on condition of anonymity due to nondisclosure agreements, told the outlet that High Times’ senior management, led by executive chairman Adam Levin and his half-brother and operations chief Maxx Abramowitz, failed to provide a mandatory 60-day notice to employees, violating California’s WARN Act.
The dispensary licenses and building leases were acquired by High Times in June 2020 through a convoluted deal involving Washington-based Have A Heart and Florida-based Harvest Health & Recreation.
Following a series of breach-of-contract lawsuits and hearings with city officials, Levin partially transferred the dispensary licenses into his name. The licenses also remain in the name of former Have A Heart founder Ryan Kunkel.
High Times has also accrued huge debts, including more than $100,000 in tax liens against the San Bernardino store and a judgment lien filed by a construction company against the San Bernardino and Blythe properties, according to public filings.
In 2020, High Times raised more than $35 million through a lightly regulated Reg A+ public offering and went on a buying spree to establish a vertically-integrated cannabis production, processing, and retail operation spanning California, Arizona, Nevada, Illinois, and Florida. The ambitious plan took place during the peak of the green rush, when cannabis asset prices were at an all-time high.
The firm’s financial troubles continued to mount thereafter. Green Market Report reported in 2022 that the company had taken secured loans from venture fund ExWorks, amounting to at least $28 million, which had gone unpaid and resulted in litigation. All three closed locations also have UCC liens filed against them by ExWorks.
The legal control of the dispensaries’ licenses remains uncertain, as ExWorks itself is now insolvent and has been assigned a receiver out of Chicago.
In September 2023, High Times sold a piece of its brand licensing properties to Canadian-based Lucy Scientific, another mystery piece in the puzzle.
That same month, the SEC filed a suit against Levin alleging securities fraud involving a scheme to conceal paid promotions of a securities offering from at least April 2020 through August 2021.
Levin was also accused of selling the Reg A+ offering after the SEC instructed him to halt it. High Times settled with the SEC without admitting or denying guilt, agreeing to pay a fine of $558,071.
High Times also, in general, failed to file timely audited annual reports, with the last audited annual financials being filed in 2018, resulting in the SEC halting the Reg A+ mini-IPO campaign in mid-2020.
