High Times Stock Refund: Rescission, FINRA, and Class Action

To pursue a High Times stock refund, send the company a written rescission demand under Section 12 of the Securities Act of 1933, tender your shares back, and file parallel complaints with the SEC and your state securities regulator. The SEC has already found that Hightimes Holding Corp. conducted an unregistered offering between June 2020 and December 2022 and imposed a $558,071 penalty, which gives individual investors a documented basis for recovery.¹ The catch is time: federal law sets hard deadlines that cannot be extended, and for the earliest investors those deadlines may already have passed.

Why You Have a Claim

Hightimes sold Class A Common Stock at $11.00 per share through a Regulation A+ offering that opened in 2018 and aimed to raise up to $50,000,000.² The SEC later found that the company violated Section 10(b) of the Securities Exchange Act, Rule 10b-5, and Sections 5 and 17(a) of the Securities Act. Hightimes agreed to a cease-and-desist order without admitting or denying the findings.¹

Section 12 of the Securities Act lets an investor who bought unregistered or misleadingly offered securities sue “to recover the consideration paid for such security with interest thereon, less the amount of any income received thereon, upon the tender of such security.”³ You return the shares; the company returns your purchase price plus statutory interest, minus any income you received on the stock.

Section 12(a)(1) covers sales made without a valid registration or exemption, and it does not require you to prove the company acted negligently or intentionally. The sale itself is the violation.³ Section 12(a)(2) is a parallel path when offering materials contained untrue statements or omitted important facts. The SEC’s finding that Hightimes ran an unregistered offering from June 2020 through December 2022 lines up directly with a Section 12(a)(1) claim for anyone who bought during that window.

The offering circular warned that once Hightimes hit its $5,000,000 minimum, “no refunds will be given if an inadequate amount of money is raised.”² That language addresses failed fundraises. It does not extinguish rescission rights when the company itself broke securities law.

How Much Time You Have Left

Two deadlines run at the same time, and missing either one ends your claim. Under Section 13 of the Securities Act, you have one year from the date you discovered — or should have discovered through reasonable effort — the violation. On top of that sits a three-year outer limit: no action can be brought more than three years after the security was first offered to the public for a Section 12(a)(1) claim, or more than three years after the sale for a Section 12(a)(2) claim.⁴

The three-year cutoff is a statute of repose. The Supreme Court has held that it cannot be extended through equitable tolling, and the pendency of a class action does not pause it either. If three years have passed, the claim is gone. Investors who bought in the earliest 2018 rounds may already be outside that window. Investors who bought during the 2020–2022 unregistered period identified by the SEC may still have room, but not much. Talk to a securities attorney about your specific purchase date before doing anything else.

Records to Pull First

Gather every document tied to your original purchase before you draft anything. You need the exact purchase date, the number of shares, the price per share (usually $11.00), and the total dollar amount transferred.² Pull the transaction from your bank or credit card statement to identify the payment method and transaction ID.

The transfer agent for Hightimes common stock is VStock Transfer, LLC.² Include any certificate number or investor account ID from your confirmation email or investor dashboard. Earlier investors whose funds sat in escrow may have dealt with a different custodian: Bank of America served as escrow agent for the initial offering, and Prime Trust was listed in a later amendment.⁵

Writing and Sending the Rescission Demand

Your demand letter should include your full name, your taxpayer identification number, the specific shares you are tendering back, and a clear statement that you are exercising your rescission rights under Section 12 of the Securities Act. Describe the basis for the claim and cite the SEC’s enforcement findings. Keep the letter factual. Argument does not add legal weight.

Send the demand to Hightimes at the registered address listed in its SEC filings: 10990 Wilshire Blvd, Penthouse, Los Angeles, CA 90024.⁶ Send a copy to VStock Transfer, LLC, because the transfer agent handles the share cancellation side. Under SEC rules, transfer agents must follow specific written procedures when canceling securities, including marking certificates as cancelled and maintaining a retrievable database of cancelled shares.⁷

Use certified mail with return receipt requested for every submission. Keep the tracking number, the signed return card, and copies of the letter itself. If the company does not respond substantively within 30 to 60 days, that silence becomes part of your file when you move to regulators. A voluntary refund is not guaranteed, but the demand preserves your legal rights and builds the paper trail everything else runs on.

Escalating to Regulators

When a demand goes unanswered, several agencies can take it further.

SEC Tips, Complaints, and Referrals

The SEC’s TCR system lets you report the violation directly. The online form on sec.gov takes about 30 minutes to complete.⁸ Attach copies of your certified mail receipt, the original investment confirmation, and any correspondence with the company. If you want to file anonymously and be considered for a whistleblower award, an attorney must submit the form on your behalf. Because the SEC has already acted against Hightimes, your report adds to an open enforcement record.

FINRA Arbitration

If a FINRA-registered broker-dealer facilitated your purchase, you can compel arbitration through FINRA’s dispute resolution process. A member firm must participate when a customer files, and the dispute arises from the firm’s business.⁹ FINRA arbitration typically resolves in about 16 months if the case goes to a hearing, or roughly a year if it settles.¹⁰ Filing fees scale with the claim amount.

State Securities Regulators

Every state enforces its own securities regulations, called blue sky laws, alongside federal protections.¹¹ State agencies can issue cease-and-desist orders, impose fines, and restrict a company’s ability to raise capital. State enforcement sometimes produces restitution funds for affected investors, which is why filing at the state level is worth the time even after you file with the SEC. The North American Securities Administrators Association maintains a directory of state regulators.

What SIPC Does Not Cover Here

If your shares sat at a FINRA-member brokerage that later became insolvent, the Securities Investor Protection Corporation covers up to $500,000 per customer, with a $250,000 sublimit for cash. SIPC restores securities and cash that were in your account when the brokerage failed. It does not compensate you for a decline in value or for buying a bad investment. To qualify as a protected security, the instrument must be registered with the SEC under the Securities Act of 1933.¹² Shares purchased during the unregistered June 2020–December 2022 window identified by the SEC may fall outside SIPC coverage for that reason.

The Delaware Class Action

A class action has been filed in Delaware on behalf of at least 40 investors, alleging mismanagement of investment funds and problems with the transfer of shares. Joining an existing class action generally costs less than filing an individual suit, since legal fees are shared. Class actions also move slowly, and any recovery is divided among all participating investors, which often produces a smaller individual return than a direct rescission demand.

One point matters more than the rest: the three-year statute of repose is not tolled by a pending class action. Sending your own rescission demand and filing your own regulatory complaints in parallel keeps your individual rights intact if the class action stalls or does not cover your purchase window.

Tax Treatment If You Get Your Money Back

Under the IRS rescission doctrine reflected in Revenue Ruling 80-58, a rescinded transaction can be treated as if it never happened when two conditions are met: both parties are fully restored to their original positions, and the rescission is completed in the same tax year as the original purchase. Neither side then recognizes a gain or loss.

Most Hightimes investors will fall outside that same-year window given the time that has elapsed, and the tax handling becomes more involved. The IRS has a no-ruling policy on the rescission doctrine, so you cannot request a private letter ruling confirming your treatment. Keep records of every payment made and received in connection with the investment and its unwinding, and talk to a tax professional before you file for the year the refund lands.

1
U.S. Securities and Exchange Commission. SEC Settles Actions Against Two Reg A Issuers
2
U.S. Securities and Exchange Commission. Form 1-A – Regulation A Offering Circular
3
Office of the Law Revision Counsel. 15 USC 77l – Civil Liabilities Arising in Connection With Prospectuses and Communications
4
Office of the Law Revision Counsel. 15 USC 77m – Limitation of Actions
5
U.S. Securities and Exchange Commission. Hightimes Holding Corp – Post-Qualification Amendment to Form 1-A
6
U.S. Securities and Exchange Commission. Hightimes Holding Corp – Annual Report on Form 1-K
7
Securities and Exchange Commission. Processing Requirements for Cancelled Security Certificates
8
U.S. Securities and Exchange Commission. Welcome to Tips, Complaints, and Referrals
9
FINRA. Code of Arbitration Procedure for Customer Disputes
10
FINRA. FINRA Arbitration Process
11
Investor.gov. State Securities Regulators
12
SIPC. What SIPC Protects