High Times Holding Corp. Chair Adam Levin and the company’s new CEO, Peter Horvath, have an audacious plan: Take the iconic cannabis magazine publisher public and transform it into a marijuana retail powerhouse, one that licenses its brand to third-party operators.
Time will tell whether they can succeed.
Last week, Levin tapped Horvath to become the Los Angeles-based company’s third CEO in a little more than a year.
Horvath, a former chief commercialization officer at American Eagle Outfitters and previously chief operating officer for Victoria’s Secret, replaced interim chief executive Stormy Simon.
Levin’s CEO switch and Horvath’s new gig come at a critical time that involves the following factors:
- High Times is attempting to break into the retail sector through an $80 million cash and stock deal to acquire 13 operating and planned cannabis outlets from Harvest Health & Recreation – this at a time when the economy is facing a major downturn.
- The company is aiming to go public through a Regulation A stock offering expected to close Friday, although it’s possible that deadline could be extended yet again.
In an interview with Marijuana Business Daily, Levin and Horvath discussed the company’s recent developments and future plans.
How did the Harvest Health deal originate?
Levin: I’ve known the Harvest team and their head of corporate development years before the cannabis world.
I was aware of the Harvest properties and had that conversation with them.
The conversation started to include the larger opportunity with the other stores that we included in the acquisition.
What approvals are required to close the deal?
Levin: The (California) Bureau of Cannabis Control and local regulatory approvals, and consensus of other third parties.
What challenges can hold up the deal?
Levin: Like any transaction that requires consents, you can’t necessarily dictate that every third party is going to consent to a transaction.
But we’re optimistic we’re going to work through any perceived issues or potential issues and be able to close.
Is there a deadline to close the deal?
Levin: There’s no contractual window.
Do you envision challenges in transferring license ownership?
Levin: There are always challenges in any process when you’re talking about 13 licenses and different jurisdictions.
Some have minority owners. We’re going to work ourselves through that process.
Peter Horvath is the third CEO since December. The company also has gone through a few CFOs in the last year. What led to the change?
Levin: As a business that wasn’t looking to touch the plant in an auxiliary business, the board and the company went with (former CEO) Kraig Fox.
We had terminated a relationship with Kraig at the end of the year.
We had Stormy step in on an interim role, but by the time Kraig had left the company, we knew we were going strong on retail.
I had always seen a strong retailer coming in, and with meeting Peter came the perfect opportunity.
Will you discuss the search process?
Levin: It was clear to us that you don’t find many people like Peter who has the cannabis exposure and cannabis experience combined with the strong retail background.
There’s no brand like High Times that has the awareness of cannabis consumers and nonconsumers.
So it’s special, and we need the right fit.
What is your management style?
Horvath: It’s kind of old school in some ways, but not necessarily expected in other ways.
It’s a high-empowerment management style, but you can’t do that unless you have the right people on the team and unless you arm them with tools to succeed.
The leader’s role is to paint a picture for the future and take people there. Trust takes months or years, not days or position. Title doesn’t earn any trust.
What are your immediate priorities?
Horvath: I’m still forming that, but the No. 1 priority is transitioning onto this team because I could have some brilliant strategy, but if people don’t want to talk to me or work with me, it’s not going to happen.
If you can get people to trust you with their souls and heart, you can get people to do things thought to be impossible. That has a big tie-in to culture.
No. 1, understand Adam’s vision and the journey he’s taken in the last 2½ years and understand how the team has contributed and formed that vision.
From an operational side, it‘s clear we are intent on serving consumers digitally, direct delivery, curbside pickup and in-store experiences.
What’s your long-term vision for growth?
Levin: High Times differentiates itself as a dedicated media outlet – whether through our magazine, digital outlets, social channels – to really serve and promote the brand on our shelves and third-party products that will be sold by us.
We’re looking at rebranding stores now and creating what a High Times destination and retail footprint looks like.
High Times has always looked at creating and operating our own stores.
We’re also looking at licensing our brand to third-party retailers. You’ll see some mix of owned and operated stores and licensed stores.
The company in 2018 initiated a Regulation A offering to raise as much as $50 million. Will the offering close soon? Is there a deadline?
Levin: Extensions are available. The average Reg A has raised $15 million. We never thought we would reach $50 million.
We’ve publicly stated we’ve raised over $20 million. We’ve also surpassed 30,000 shareholders.
We have what’s been viewed as one of the most successful Reg As to date. We will look to close it and list and trade in the near future. We have no other hurdles to trading.
What are those triggers to start trading?
Levin: We’re looking at the market and momentum. We’re looking at the right opportunity and timing.
It’s unique when you have a company that has a float, a real natural float in the cannabis world, since so many of these companies are products of reverse mergers.
Having 30,000 shareholders who are financially passionate about the brand subscribe is a strong statement.
How will Dope Media and Buyers Media Guide integrate into the new business?
Horvath: I don’t want to go beyond saying they will be leveraged.
Until I get some time with the team and really understand the media and event part of the business in detail, I just don’t want to talk about we’re going to do.
I’ve been on two conference calls with these guys in two days. My guess is they have all the answers. My job is to hear them and organize them and get them done.
This interview has been edited for length and clarity.
Chris Casacchia is a freelance writer based in Long Beach, California. He can be reached at [email protected]