Marijuana. Picture: ISTOCK
Marijuana. Picture: ISTOCK

New York — The company that owns High Times, a magazine devoted to marijuana culture, announced on Tuesday that it is launching an equity crowdfunding campaign ahead of its application for an initial public offering (IPO) on Nasdaq later this year.

The campaign is intended to bolster the valuation of Hightimes Holding while offering noninstitutional investors greater access to shares than they would have in an IPO, company CEO Adam Levin said.

For the offering, Hightimes has set a price of $11 per share, 10% below the price the company expects the shares to trade on Nasdaq. The company also announced that former Mexican president Vicente Fox would join its board of directors.

Its renewed push for an IPO comes as marijuana companies have gained a foothold on Wall Street. Two Canadian companies, Cronos Group and Canopy Growth, debuted this year on Nasdaq and the New York Stock Exchange, respectively.

Innovative Industrial Properties, a San Diego real estate investment trust that owns medical-use cannabis facilities, went public in 2016.

US cannabis companies face a roadblock to listing on the major exchanges. Marijuana remains illegal under US federal law, though more than half of all US states have legalised it for medical or recreational use. In Canada, however, medical marijuana is legal, and the country’s senate recently voted in favour of allowing recreational use of the drug.

MassRoots, a Denver cannabis social media network, unsuccessfully applied to list on Nasdaq in 2016. Levin said Hightimes has gained pre-clearance from Nasdaq. As a media company, it does not directly grow or distribute marijuana, though it runs events at which vendors have sold cannabis products.

Levin said the US debuts of Cronos and Canopy Growth signal a growing acceptance of the industry.

"The landscape is much different than it was several years ago," he said. "When we initially filed, it was a big risk factor. No companies had been listed on the Nasdaq or the NYSE."

Cannabis is still a budding industry: spending on the plant worldwide is projected to reach just $12.9bn, according to Arcview Group, a cannabis investment and research firm.