Cannabis Capital Is Coming Back. What Happened to the Founders Last Time.

Berner has a word for the guys who show up with a term sheet and no feel for the plant. He calls them the Chads — like many others in the cannabis community do. A new wave of them is coming, and the last wave ate a generation of founders.

On the morning of June 10, 2026, Trulieve Cannabis became the first plant-touching U.S. cannabis company to list on the New York Stock Exchange. The company restructured around its medical operations to satisfy the listing standards, and Kim Rivers, the founder and CEO who built it out of Florida, called the move a major advancement for the industry, which it is.

The MSOS ETF has hit its 2026 high in anticipation. Curaleaf has executed a 1-for-3 reverse stock split (that’s when a company reduces the number of shares circulating in order to make each of the remaining shares more valuable). Verano has done a 1-for-5 reverse split. The DEA’s hearing on adult-use rescheduling ran from June 29 to July 15, and on August 17 the government filed a closing brief asking the judge to expeditiously recommend moving marijuana to Schedule III. The judge’s recommendation is pending, on no announced timetable. The next administrative step after that is full uplisting eligibility for the rest of the major MSOs, which is the step the entire institutional capital base of the United States has been waiting on since 2018.

What that step actually means, structurally, is that the pension funds, mutual funds, retail brokerages, and credit desks of every major American financial institution are about to be free to deploy into the legal cannabis ecosystem. Some of that capital will land directly on the public MSOs. Most of it will trickle into the rest of the industry, into mid-sized regional operators, into consumer brands, into craft cultivators, into celebrity ventures, into ancillary tech. It will show up in your inbox. It will look polite, patient and promising. Some of it will be exactly what it looks like and most of it will not.

Berner has a word for the ones that aren’t. He described the old weed business to High Times as handshake-based, someone fronting someone else a ten-pack on trust and everybody squared up in a few days. What turns up now is the opposite: contracts, agendas, no feel for the plant. He calls them the Chads, and his screening process is one joint long.

“If they can’t smoke one with me, if they can’t tell me what their agenda is, what their goals are in the weed space, if they don’t understand the community, they don’t understand the culture, they don’t understand the unity.”

Berner, to High Times

You already know the type. The one who calls it deal flow. The one whose LinkedIn says he is passionate about the space. Beware of the Chads.

What Cycle One Took

The first time outside money came into U.S. legal cannabis, call it the run from 2014 through 2021, it built the industry and then it ate a generation of its founders. This is the part of the story that sometimes gets told at the conferences about authentic founders. People who came up from the culture and had a really hard time transferring into a “legitimate” business. Once they started raising capital, in the very specific way the contract was written to permit, the company they were aiming to build started belonging to someone else.

Peak to exit

What the founders built, and what happened after the money came in.

Canopy Growth

Bruce Linton

July 2019

Fired by the board Constellation Brands controlled four of seven seats on, after one quarter of soft Canadian retail numbers.

~$2B

implied valuation, 2018

Early 2020

Removed as CEO. By his account, his keycard no longer worked at the turnstile of the building he built.

Flow Kana

Michael Steinmetz

End of 2021

Lost operational control. By 2022 the company was effectively a shell leasing out its Mendocino property.

High Times

Adam Levin era

~$70M

2017 deal valuation

June 2025

Brand IP sold for a small fraction of that valuation after $105M in accumulated debt and a failed NASDAQ plan.

Figures are peak valuations or totals raised, not comparable measures. Sources: company filings and the published reports linked in this article.

For instance, in March 2026, on VladTV, Berner, born Gilbert Milam Jr., the rapper and founder of Cookies, was asked the standard interview question. What was your biggest business mistake? It is a softball and the expected answers are a business deal that went wrong, a bad hire. Milam said his mistake was taking money from outside investors. He said going forward he would fund his own projects, alone, because the capital had brought complications he had not considered.

So the most successful operator-founder in legal cannabis, a man whose company other operators wanted equity in and not the other way around, sees the source of the capital itself as the problem.

By early 2023, a group of his Cookies investors had filed suit against him alleging self-dealing and demanding control of the operation. He posted a video to Instagram titled “Public Berner Announcement” saying he was fighting for his business.

That July, another investor group told a Los Angeles court that Cookies had mismanaged their $15.5 million through what they called multimillion-dollar kickbacks and self-dealing, and had burned through most of a separate $23 million raise, according to filings reported by MJBizDaily. Cookies president Parker Berling responded in a court filing that many of the claims were demonstrably false, and the company said it had tried to return the investors’ principal. None of the allegations has been proven and the litigation continues.

If you do business at a certain scale in the US, eventually you are going to get sued, sometimes for the most random of reasons. The point is that the money that built the floor became the lever used to try to pull him off it, and the timing was what it was.

If you are in bed with financial capital, watch your back.

$250 Million Calls The Vote

Adam Bierman tells a story about what the trap looks like in the basement.

MedMen, at its 2018 peak, had an implied valuation of around two billion dollars. The Apple-store dispensary aesthetic was either the future of legal cannabis or an insult to the plant, depending on who you asked. Either way, the company was real. Bierman and Andrew Modlin had built it from a consulting practice into a coast-to-coast retail brand.

In late 2018, they ran out of cash. The deal that came in was a $250 million financing facility from Gotham Green Partners, a New York private equity fund whose principals had made a pile of money on the Canadian licensed producers, and a syndicate led by Jason Adler. The front of the term sheet looked like a rescue.

In January 2025, Bierman published a book called Weed Empire. There is a chapter where he walks through the day the noose closed. By his account, Gotham Green’s advances had come in tranches, each one with worse terms than the last, until the lender owned the equity at a fraction of what the company had been worth at peak. Bierman had already been removed as CEO some months earlier. He walked back into the building he had built and discovered his keycard no longer worked at the turnstile.

The press clippings of his own face had come down off the lobby walls. He took his seat at a board that was no longer his board. He tried to put his objections on the record, that the deal valued the company at $70 million and gave Gotham 30 to 40 percent control, and that a better offer was on the table. The chairman cut him off and called the vote. In a reference to the way the Russian revolutionary Leon Trotsky was killed by a Stalinist agent, Bierman calls it a final ice pick to his skull.

That account is Bierman’s, and Gotham Green has disputed his characterization of the transaction. But the mechanics are not in dispute, and whatever his role in his own removal, the shape of it holds: he raised money, the money came with terms, the terms gave the lender leverage, and eventually the leverage was used.

There is also the Linton case, among those that made it to the media.

In August 2018, Constellation Brands, the alcohol conglomerate that makes Corona and Modelo, put $4 billion into Canopy Growth, the Canadian licensed producer co-founded by Bruce Linton out of Smiths Falls, Ontario. The deal built on a smaller 2017 stake and gave Constellation a 38 percent ownership and four of seven board seats. Linton called it the largest investment in the history of the cannabis industry. He was right. It is also one of the cleanest examples on the public record of what happens after that wire clears.

On July 3, 2019, the board fired him.

The company’s press release said Linton would “step down.” He called CNBC the same morning and corrected the record. “I think stepping down might not be the right phrase. I was terminated.” He told the Globe and Mail he had felt the meeting coming on the Friday before, when the board called a meeting that he, as chairman, had not called. “That caused my spidey-sense to tingle. Once the meeting starts, you know exactly what you’ve walked into.”

“It was not the first time I’ve been fired as a founder,” he added.

Linton built a company from a $100 million valuation to roughly $18 billion in market cap. The people who put the check in fired him after a quarter of soft Canadian retail numbers.

One Lender, Two Funerals

Here is the through-line that makes it hard to dismiss any of this as bad luck.

The same investor that ended up in control of MedMen, Gotham Green Partners, was also the largest equity backer of Flow Kana, the California craft cannabis brand founded in 2015 by Michael Steinmetz on the heirloom-farming culture of Mendocino, Humboldt, and Trinity Counties. Gotham Green led Flow Kana’s $22 million Series A in 2018 and led its $125 million Series B in early 2019. By the end of 2021, Steinmetz had lost operational control of the company. By 2022, Flow Kana was effectively a shell leasing out the 300-acre Mendocino property, the former Fetzer wine dynasty headquarters, to another cannabis operator while the lender prepared to sell off the rest for parts.

Steinmetz spoke to cannabis journalist Chris Roberts on the record while the dust was still settling. The piece, “Super Puffed,” ran in July 2023.

“I had the illusion of control. I was very naïve.”

Michael Steinmetz, Flow Kana founder, to Alta

Flow Kana raised more than $175 million and became California’s top-selling flower brand in 2018. It employed 200 people. Casey O’Neill of HappyDay Farms, one of the Mendocino growers who had partnered with the company from the beginning, summarized the supply-chain end of the story when it was over, telling Alta that they got the trust of the Emerald Triangle farmers and then, in his words, they shit all over them.

The Khalifa Kush Lesson On Money Up Front

Tim Hunkele has been running the operating side of Khalifa Kush since the brand became a company of its own. When asked why KK has outlasted essentially every other celebrity cannabis brand in the United States, Khalifa Kush did roughly $50 million in tracked U.S. sales in 2024, about double the next-place celebrity brand and roughly twenty times what Snoop’s Death Row Cannabis pulled in the same period, Hunkele keeps coming back to a single rule he and the team learned the hard way.

They had been offered, multiple times, deals involving large sums up front. They took one large contract in Canada. That was the last time the brand did something like that, because they could not even deploy their products there after a regulator decided to leave them out of the market.

From that, they took a rule they shared in an interview in the most recent issue of High Times: no more big money up front. They moved to a licensing model in which Khalifa Kush retains brand control, genetics, and royalty revenue, while a regulated MSO partner, Cresco in California, Trulieve across the Southeast, TerrAscend in Michigan, handles the heavy lifting on the regulated side. It keeps the brand asset-light, which is possible for a brand and much harder for other kinds of business.

They kept the cap table tight enough that nobody outside ever had a path to taking the brand from Wiz.

The Ones Who Got Away

Many have been reluctant over the years to even borrow the slightest amount. One of them is the founder of RAW and this magazine’s publisher, Josh Kesselman.

Kesselman started RAW Rolling Papers in the mid-1990s with what he has described as about $500, sleeping in a Florida storage shed. Since then, RAW has been private and operated with no outside investors.

RAW reportedly does more than $120 million a year in U.S. revenue and ships into more than 100 countries. He has said in interviews that he was once offered about half a billion dollars for the brand and turned it down without ceremony.

After buying High Times, he said he had never needed financing and had never needed investors, because the rolling paper business had done so well that the question simply did not arise. He described what he tells the investors who keep coming around when they hear he is working on something new: that whatever they put in, they cannot pull out for twenty years, and at the end of twenty years they may get back what they put in, possibly less. Then, in his words, they go away.

That Thing That Happened To High Times

Which brings us, finally, to ourselves.

High Times was founded in 1974 by Tom Forçade. The magazine was the bible of the American legalization movement for four decades. It launched the Cannabis Cup in 1988. It published Hunter S. Thompson, Truman Capote, William S. Burroughs, Allen Ginsberg, Timothy Leary and Charles Bukowski. It was, for a long stretch of history, a flag for the cannabis movement.

In March 2017, a group led by Adam Levin’s Oreva Capital acquired a controlling stake in a deal that valued the company at around $70 million. The plan was a roll-up: acquire events, acquire publications, acquire dispensary licenses, take the whole thing public on the NASDAQ through a reverse merger. A Seeking Alpha analysis later recorded that the company’s working capital deficit ballooned from under $4 million to nearly $30 million in a single year, with a net loss of $24.7 million in 2017 alone. By 2019, the company was warning in SEC filings that it might have to cease operations unless it could underwrite the $105 million in debt it had accumulated. The NASDAQ listing never happened. The print magazine stopped publishing in 2024.

In February 2025, Levin pleaded guilty to one federal count of conspiracy to tout securities for undisclosed compensation. Prosecutors said he paid more than $150,000 to arrange favorable coverage of a Hightimes Holding securities offering in Palm Beach Venture, an investment newsletter that told readers it was not being paid to present the opportunity. He routed the money through a Canadian bank to a shell company under a sham marketing agreement, admitted paying tens of thousands more in entertainment expenses, and admitted lying to the Securities and Exchange Commission by denying he knew about the arrangement. The promotion helped Hightimes raise at least $6 million of the roughly $20 million it took in from investors across 2020 and 2021. On July 28, 2026, he was sentenced to eight months of home detention and two years of probation, fined $180,000 and ordered to pay $143,537 in restitution. Three other defendants in the scheme, newsletter analyst Jonathan William Mikula, associate Christian Fernandez and executive Raj Beri, drew prison terms of six to 28 months. The SEC’s separate civil case against Hightimes ended in 2023 with a cease-and-desist order and a $558,071 penalty.

In June 2025, the intellectual property of one of the most recognizable brands in the history of cannabis culture sold for a small fraction of what it had been valued at under people who had no idea how to operate cannabis brands. The buyer was Kesselman.

The cannabis industry is sitting on roughly $6 billion in debt scheduled to mature through the end of 2026, with $2.5 to $3 billion of it coming due this year alone, according to Cannabis Industry Insights and Viridian Capital Advisors. In 2025, 94.8% of all capital raised by U.S. licensed operators was debt rather than equity. Of the top ten capital raises last year, nine were debt. Federal bankruptcy protection has been effectively closed to plant-touching cannabis businesses, which means that when an operator defaults, the lender does not restructure. The lender takes the asset, through receivership, Article 9 foreclosure, or assignment for the benefit of creditors. A March 2026 ruling in the Cannabist Company Holdings case cracked that door slightly, when a U.S. bankruptcy court recognized a Canadian insolvency proceeding and extended certain protections to the company’s U.S. cannabis subsidiaries, the first time that has happened. But it turned on a holding-company structure with space between the debtor and the plant, and it has not been tested twice. For most operators, there is still no escape valve. The mechanism that took MedMen and Flow Kana is the same mechanism currently working through dozens of mid-sized operators whose names you do not yet recognize, and it is accelerating.

Being blunt, that picture gives a shape of what is about to happen. On one side, an industry full of operators in distress whose existing lenders are about to start calling debt. On the other, a new wave of institutional capital that has been waiting seven years to deploy and is about to get the green light.

Editor’s note: High Times is owned by Josh Kesselman, the founder of RAW Rolling Papers, who appears in this article. The magazine’s own history under previous ownership is also part of the story. Neither Kesselman nor anyone else at the company reviewed this piece before publication.

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