Cannabis Brand High Times Walks Back on Becoming ‘First Ever’ IPO to Accept Crypto

  • Canabis brand High Times has recently revealed its IPO won't accept bitcoin, the flagship cryptocurrency.
  • This, after it published a press releasing touting it would accept both bitcoin and ether.

Cannabis culture media firm High Times Holding, which claims to be the “original voice of cannabis,” has recently revealed it won’t be accepting bitcoin, the flagship cryptocurrency, in its initial public offering (IPO).

Earlier this month, as CryptoGlobe covered, High Times published a press release touting it was going to accept bitcoin and ethereum in its IPO, allegedly making it the “first ever” to accept crypto investments.

Now, in a filing with the US Securities and Exchange Commission (SEC), the cannabis brand revealed it won’t accept BTC, and that its announcement was a mistake. The filing reads:

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.

SEC filing

At press time, the press release is still up on High Times’ website. The document doesn’t mention ETH, but the cryptocurrency is, presumably, also not going to be accepted in the IPO. As covered, the firm is selling its shares at $11, with the minimum investment amount being of $99. High Times is looking to go public on the Nasdaq exchange under the “HITM” ticker.

The press release was related to the company’s Regulation A+ (Reg A+) offering, which lets small and early-stage companies access capital in an “alternative to a traditional IPO” that lets them sell shares to the general public. Per Nasdaq, the filing lets businesses raise up to $50 million in a 12-month period from the public.

At the time, High Times CEO Adam Levin claimed cryptocurrencies created a new “investor base across the world,” one the company didn’t want to exclude. He added the firm doesn’t believe in initial coin offerings (ICOs), but 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.”

Curiously, cryptocurrencies have often been pointed to as a solution to one of the cannabis industry’s problems. In the US, while in some states marijuana usage is legal, most banks refuse to offer cannabis-related businesses banking services, forcing them to operate with cash.

This makes them a ripe target for criminals. Cryptocurrencies, given their features, could be a safer and cheaper alternative to the traditional banking system. Potcoin, a cryptocurrency created for the cannabis industry, made headlines this year after NBA star-turned diplomat Dennis Rodman appeared on CNN wearing its merchandise.

Chinese Yuan 'Inversely Correlated' with Bitcoin, Amidst US-China Trade Wars

Since January 2018, China and the US have been involved in an intense trade war in which both countries have significantly increased tariffs on imported goods and services.

Due partly to the rising tension between the two countries, the Chinese yuan (CNY) has been losing value against the USD. During the same time period, the price of bitcoin (BTC) and other major cryptoassets has been surging.

As noted by the South China Morning Post (SCMP), the value of BTC, the world’s most dominant cryptocurrency, increased by 26.5% to $7,878 during the time period from May 5 to May 17. Notably, US President Donald Trump had announced on May 5 that he would further increase tariffs on goods imported from mainland China.

Chinese Yuan Weakens as Nation’s Government Responds to Increased Tariffs

The SCMP pointed out that the yuan dropped to its lowest level since the past six months after the Chinese government responded to Trump administration’s decision to impose higher tariffs on China.

Commenting on the price fluctuations of both the yuan and bitcoin, Garrick Hileman, a Macroeconomics Researcher at London School of Economics (LSE) and Head of Research at Blockchain.com, remarked:

We are observing a strong inverse correlation between the [Renminbi] RMB’s value and bitcoin, meaning that recent RMB declines over trade tensions have been closely matched by increases in the value of bitcoin.

“Correlation Does Not Necessarily Equal Causation”

Hileman also mentioned that we “cannot be 100% certain” that the bitcoin price has been increasing due to heightened concerns regarding trade tensions and the corresponding decline in the value of the yuan. The blockchain researcher stated:

Trade tensions and declines in the RMB’s exchange rate as correlation does not necessarily equal causation.

Hileman, who earned his Phd from LSE, revealed:

This is not the first time we’ve seen significant increases in the value of bitcoin taking place alongside yuan concerns.

He added that there’s “growing recognition of bitcoin as ‘digital gold’ and it being used as a hedge against various macroeconomic risks.”

“This Year, the Narrative Is Bitcoin, Bitcoin, Bitcoin”

According to the SCMP, bitcoin’s price may have surged recently due to the generally positive remarks made about it at the Consensus 2019 conference.

Meltem Demirors, the Chief Strategy Officer at CoinShares, a crypto treasury management firm, has also confirmed recently that the narrative this year has been mostly about Bitcoin. Demirors revealed that both institutions and retail investors are “feeling good” and are “more confident” about the long-term potential of Bitcoin and the evolving ecosystem that supports it.