A former hedge fund manager, Hooters franchise owner and blueberry farm president hopes to raise up to $172.5 million to enter the cannabis industry.
William F. "Mickey" Harley III of Massapequa is chief executive of Woodbury-based "blank check" company Greenrose Acquisition Corp., which filed for an initial public offering to raise the capital.
Blank check companies, also known as special purpose acquisition companies, or SPACs, raise funds in the public markets and then use the proceeds to acquire or merge with an operating business.
The Dec. 27 Securities and Exchange Commission filing said Greenrose plans to focus its search for a "target business" on the cannabis industry, though it could turn its attention elsewhere.
In October 2012, Hooters of America terminated a franchise agreement with Harley's Strix Restaurant Group.
Strix owned Hooters franchises in East Meadow, Farmingdale, Islandia and Fresh Meadows, Queens. At the time, Hooters said Strix was not paying its franchise fees, while a Strix spokesman said Hooters was not supporting its business.
The phone number listed on the Greenrose IPO document was not in service, and other attempts to phone Harley proved unsuccessful.
In August 2012, Harley, of Massapequa, and his hedge fund were sued in federal court in the western district of Pennsylvania by Pittsburgh nonprofit The Claude Worthington Benedum Foundation.
The foundation in 2004 put $2 million into a fund managed by Harley at Pittsburgh asset manager Mellon Financial. Three years later, however Mellon merged with Bank of New York and Harley bought the fund and its assets.
The lawsuit said that in 2008 Harley told the nonprofit that the fund was winding down after facing liquidity problems and the foundation's investment would be redeemed.
A February 2014 report by forensic accountant David Tantlinger Jr. filed in the lawsuit on behalf of the foundation said that as the hedge fund was winding down, Harley sent redemption payments to certain investors, but not Benedum.
Eventually, the parties in the lawsuit reached a sealed settlement.
Alon Kapen, a securities lawyer at Uniondale-based Farrell Fritz, said the cannabis business is attracting attention despite its illegal status under federal law.
"There's a lot of momentum in this industry," he said. "A lot of people are identifying this as a tremendous opportunity, but it's not without risk."
A call to a spokesman for Los Angeles-based investment bank Imperial Capital LLC, the lead underwriter for the IPO, was not returned.
Greenrose plans to apply for a stock listing on the Nasdaq Stock Market under the ticker symbol "GRAC."
Harley, 56, served as president of Bhavana Berries LLC, an organic blueberry farm in Southold, from 2012 through 2018, the filing said.
Kapen said that stricter SEC regulations, including some that he deems overly burdensome, have made blank check companies more respectable.
"They were, quite frankly, being used as a vehicle for fraud," he saidof blank check companies. "In the real world, a bad reputation is hard to shake off."
Kapen said that blank check companies accounted for about 20% of U.S. IPOs in 2018 and slightly less in terms of total dollars raised.