The initial public offering of High Times, a cannabis-focused news outlet, is accepting cryptocurrency as payment. This is the first time that investors have been able to buy a company's shares in this way.
The IPO opened for investors in June 2018 on the Nasdaq stock exchange. According to documentation filed with the US Securities and Exchange Commission, the company is offering 454,545 shares for $11 each. The firm is valued at $50 million.
A new investor base
CEO Adam Levine said: "Cryptocurrencies have created a new investor base across the world—we’re just giving them more stable opportunities for investment."
High Times is able to accept money in this way because it filed its IPO under Regulation A+. This classification was invented to make it easier for smaller companies to succeed.
A Regulation A+ IPO differs from a regular IPO in a number of ways. Firstly, the legal and audit costs are considerably lower. Secondly, stockholders are exempted from the usual lockup period which prevents them from selling their stocks for a minimum of 3 months from the beginning of an IPO. Third, it allows companies to raise up to $50 million by selling shares to non-accredited investors.
The regulation also allows companies to submit a confidential 'offering memorandum' to the SEC to "test the waters", as the New York Stock Exchange website puts it.
IPOs are heavily regulated, so when a company puts its shares up for public sale, it is observed from all sides and must operate within the law. The appearance of cryptocurrency in this arena can be seen as a sign that cryptocurrency is becoming institutionalised.
On Sunday, Finance Magnates reported on another first - a cryptocurrency company running an IPO. In this case, it was a cryptocurrency mining company on the London Stock Exchange. Argo Blockchain has already sold £25 million in shares.
In addition to this, the world's biggest cryptocurrency mining outfit, Bitmain, is planning to announce its own IPO later this month.
In other news from this week, Intercontinental Exchange, the parent company of the New York Stock Exchange, is developing a platform for trading Bitcoin futures. Bitcoin futures are already offered by other financial institutions, but these are cash settled, so no cryptocurrency actually changes hands. Contracts on the Bakkt platform will be physically settled - that is, the contract will be paid out in Bitcoin.
About High Times
Established in 1974, the High Times claims a print readership of approximately 250,000, 275 million monthly website visits and a 20 percent year-on-year increase in revenue.
“High Times has been at the forefront of popular culture for more than four decades. Now we’re taking another step into the future, not only as one of the first cannabis-related brands to go public on the Nasdaq but also as the first to allow Bitcoin and Ethereum as part of our public capital raise,” said Levine.
