High Times Hit With $5M Class Action Lawsuit Over Unfulfilled Stock Deals

Investors disillusioned with High Times initiated a class action lawsuit at the end of June, targeting the magazine known for its storied legacy in cannabis culture but now in receivership. Amid ongoing financial hurdles, the claimants, led by Mark C. Donius and Jill L. Donius, seek restitution for unfulfilled stock transactions.

Failed Investments And Mismanagement Allegations

The controversy began when the Doniuses attempted to invest $5,500 in 2021, transferring funds to what they believed was a reliable escrow service, Prime Trust, reports Debra Borchardt at Green Market Report. Despite receiving initial confirmation, the transaction faltered. The shares, intended to be managed by Equiniti Trust Company, never materialized in the investors’ accounts. The situation escalated when the couple, after numerous inquiries, received a vague update in 2023 regarding the updating of investor registrations, followed shortly by a cancellation of their investment without a clear explanation or timeline for a refund.

The narrative deepens with allegations against High Times’ management, particularly its former CFO, Christopher Chabot, who deflected blame onto Prime Trust. This trust company, primarily a custodian for digital assets, faced a cease-and-desist order from the Nevada Department of Business and Industry Financial Institutions Division in June 2023, leading to its subsequent bankruptcy.

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Investor Transparency Issues

Another disgruntled investor in the lawsuit, who after purchasing shares in 2020 faced similar problems from both High Times and V Stock Transfer, the latter failing to provide any substantive updates on the investment. The Green Market Report’s inquiries into V Stock Transfer's involvement remained unanswered, raising further questions about the transparency of these transactions.

High Times' Growing Legal Battle Amid Operational Instability

Legal representatives Nicholas A. Migliaccio and Jason S. Rathod are spearheading the lawsuit, which now includes at least 40 participants, a number expected to rise as company records are scrutinized. The investors seek financial redress amid High Times’ operational challenges, with the company currently in receivership and struggling with its publishing responsibilities.

As High Times navigates its legal and financial predicaments, the future of its flagship events like the Cannabis Cup remains uncertain, with organizational responsibilities shrouded in mystery. Grappling with instability at its helm, the company rotated through its fifth CEO in five years. 

Meanwhile, High Times' website is inaccessible at the time of this writing around 1 PM ET Tuesday.

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Photo credits: Sarah Stierch (CC BY 4.0)