SEC Says Medbox Made Up Bogus Revenue & Mehdizadeh to Pay SEC $12 Million

On March 9, 2017, the U.S. Securities & Exchange Commission issued the following press release:

Securities and Exchange Commission v. Notis Global, Inc. (f/k/a Medbox, Inc.), et al., Civil Action No. 2:17-cv-01905 (C.D. Cal. filed March 9, 2017)

SEC Charges Marijuana-Related Company and Executives With Touting Bogus Revenues

The Securities and Exchange Commission charged a California-based company and its founder with falsely touting “record” revenue numbers to investors and claiming to be a leader in the marijuana industry while some of its earnings came from sham transactions with a secret affiliate.

According to the SEC’s complaint, Medbox provided marijuana consulting services and claimed to sell vending machines known as “Medbox” devices capable of dispensing marijuana on the basis of biometric identification. The SEC alleges that Vincent Mehdizadeh created a shell company called New-Age Investment Consulting to carry out illegal stock sales and used the proceeds from those sales to boost Medbox’s revenue. Medbox allegedly issued press releases headlining the phony revenues as record earnings to legitimize itself as a viable commercial operation when in fact nearly 90 percent of the company’s revenue in the first quarter of 2014 stemmed from sham transactions with New-Age. Mehdizadeh allegedly acknowledged in a text message that “the only thing we are really good at is public company publicity and stock awareness. We get an A+ for creating revenue off sheer will but that won’t continue.”

Meanwhile, according to the SEC’s complaint, Mehdizadeh funded the purchase of a luxury home in the Pacific Palisades with proceeds from New-Age’s illicit stock sales.

The SEC’s complaint additionally charges Medbox’s then-CEO Bruce Bedrick with being complicit in the scheme and personally profiting. The SEC also charged New-Age and Mehdizadeh’s then-fiancée Yocelin Legaspi with unlawfully selling unregistered securities. Mehdizadeh installed Legaspi as the supposed CEO of New-Age when he created the company.

Without admitting or denying the SEC’s allegations, Mehdizadeh and Medbox, which has since changed its name to Notis Global, have agreed to settle the SEC’s charges. The settlements are pending final approval by the court. Medbox consented to the entry of a final judgment permanently enjoining it from violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (Securities Act) and Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 10b-5, 12b-20, 13a-11, and 13a-13 thereunder. Mehdizadeh consented to the entry of a final judgment permanently enjoining him from future violations of Sections 10(b) and 15(a) of the Exchange Act and Rules 10b-5 and 13b2-2 thereunder, aiding and abetting Medbox’s violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-11, and 13a-13 thereunder, and Sections 5(a), 5(c), and 17(a) of the Securities Act; requiring him to pay disgorgement of $6,014,048 plus prejudgment interest of $270,299.35 and a civil penalty of $6,014,048; and prohibiting him from serving as an officer and director of a public company or participating in any penny stock offerings.

The Commission’s complaint also alleges that Bedrick violated Section 10(b) of the Exchange Act and Rules 10b-5, 13b2-2, and 13a-14 thereunder, Section 17(a) of the Securities Act, and aided and abetted Medbox’s violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-11, and 13a-13 thereunder. In addition, the complaint alleges that Bedrick failed to comply with Section 304 of the Sarbanes-Oxley Act of 2002 (SOX) and seeks a permanent injunction, disgorgement plus prejudgment interest, a civil penalty, a penny stock bar, an officer and director bar, and reimbursement pursuant to Section 304 of SOX. Finally, the complaint alleges that Yocelin Legaspi and New-Age Investment Consulting violated Sections 5(a) and 5(c) of the Securities Act and seeks permanent injunctions, disgorgement plus prejudgment interest, and civil penalties. The SEC’s litigation continues against Bedrick, Legaspi, and New-Age.

See “A Convicted Thief and a Chiropractor Claim Their Pot Company Isn’t a One-Hit Wonder.”

By | 2017-03-11T07:27:24+00:00 March 11th, 2017|Medbox, Stories & Articles|0 Comments

Medbox’ Vincent Mehdizadeh Issues Letter to Pineapple Express, Inc. Shareholders

NASDAQ Globe Newswire:  “Over the last few years I have been the subject of an SEC investigation surrounding a prior venture, Medbox, Inc. during 2012-2014. . . . I received bad advice from the company’s [Medbox’] attorney . . . . I have become a target for any alleged missteps Medbox’s accountants, CFO, and auditor may have made, which was both caused and worsened by the incompetent attorney’s advice . . . . Given the Medbox circumstances and a curious trading suspension handed down by the SEC on PNPL securities, it appears that any venture that I’m actively involved with may be targeted unjustly.”

By | 2016-06-23T19:14:31+00:00 June 20th, 2016|Medbox, Stories & Articles|Comments Off on Medbox’ Vincent Mehdizadeh Issues Letter to Pineapple Express, Inc. Shareholders

Medbox Founder Unloads Stock

CNN Money:  “P. Vincent Mehdizadeh, founder and current majority shareholder of Medbox, Inc. (OTCQB:MDBX) announced today that an agreement has been executed with Lizada Capital LLC, an investor in the field of legal cannabis products, that would result in the transfer of the majority of Mr. Mehdizadeh’s shares of MDBX [Medbox] to that firm.”

By | 2015-04-18T20:04:12+00:00 March 4th, 2015|Medbox, Stories & Articles|Comments Off on Medbox Founder Unloads Stock

Marijuana Investors Lost $23.3 Billion in Penny Stocks Last Year

Free Republic:  “Investors in small cannabis companies lost $23.3 billion in 2014 because shady stock promoters are capitalizing on the slow tide of legalization in the US by manipulating the penny stock market with “pump and dump” schemes. . . . In 2014, pot companies had the most drastic ups and downs for penny stocks according to data analyzed by Openfolio, a social network for investors to share which stocks they’re trading. This indicates that pumping and dumping marijuana stocks has accelerated to a pretty insane degree.”

By | 2015-03-06T06:57:46+00:00 March 2nd, 2015|Medbox, Stories & Articles|Comments Off on Marijuana Investors Lost $23.3 Billion in Penny Stocks Last Year

Medbox Founder Comments on Class Action Lawsuit

Vincent Mehdizadeh, founder and majority shareholder of Medbox Inc. issued the following statement about the Josh Crystal vs. Medbox, Inc. lawsuit:

“I just wanted to clarify that one lawsuit was filed and announced on the company’s ticker without, to my knowledge, obtaining the company’s consent. Thereafter, 8 different Plaintiff’s firms, or potentially just referral services, announced that same lawsuit, again without seeking the company’s permission in citing the company’s ticker symbol, in an effort to further solicit clients. It’s a shame that we live in a ‘sue first and get clients later’ type of world but that is the reality,” stated Vincent Mehdizadeh, Founder and Majority Shareholder at Medbox. “I was personally sued in the lawsuit and I can safely say that the allegations contained in the complaint are not accurate. During my tenure with the company I personally witnessed a very supportive shareholder base and I still believe the same holds true to this day. In addition, I will be personally engaging an independent public company accounting firm, on my own, to review prior periods as stated and address GAAP compliance, materiality, and fight this suit vigorously. Although this is not a formal company response on the matter, I needed to set the record straight and now I have.”

By | 2017-02-04T07:38:58+00:00 January 25th, 2015|Medbox, Stories & Articles|Comments Off on Medbox Founder Comments on Class Action Lawsuit

Medbox Sued in Class Action Lawsuit

In Josh Crystal vs. Medbox, Inc. (MDBX), Medbox and several of its current and former officers and directors were sued in a class action lawsuit filed in the U.S. District Court for the Central District of California.  Also named as a defendant in the lawsuit are Pejman Vincent Mehdizadeh, Bruce Bedrick, Thomas Iwanski, Guy Marsala and Douglas Mitchell.  Here are some interesting allegations from the Complaint:

1. This is a securities class action on behalf of all purchasers of the common stock of Medbox between November 20, 2013 and December 29, 2014 . . . .

3.  Medbox was founded in 2010 by Defendant Pejman Vincent Mehdizadeh (“Mehdizadeh”), a mid-30s aged Iranian immigrant with a checkered history of business failures and criminal conduct, including grand theft in 2013. At the start of the Class Period on November 20, 2013, Defendant Mehdizadeh was Medbox’s controlling shareholder, owning approximately 65% of its common stock, and served as the Company’s Chief Operating Officer(“COO”) and Chairman of its Board of Directors (“Board”). . . .

4. During the Class Period, Defendants issued materially false and misleading statements regarding the Company’s financial results for the fiscal year ended December 31, 2013 (“FY 2013”) and each of the interim financial periods ended September 30, 2013 (“3Q 2013”), December 31, 2013 (“4Q 2013”), March 30, 2014 (“1Q 2014”), June 30, 2014 (“2Q 2014”) and September 30, 2014 (“3Q 2014”). Specifically, Defendants overstated Medbox’s revenues . . . .

13. Thereafter, on October 31, 2014, the Company disclosed that it had appointed a special board committee to investigate a letter from a former Company employee to the SEC “alleging wrongdoing by a former officer of the Company who

[was] a consultant to the Company” and that “a federal grand jury document subpoena [had been] served in August 2014 on the Company’s accountants by the U.S. Department of Justice….” . . . .

17. Finally, on the morning of December 30, 2014, . . . . The Company further disclosed that the earnings restatement had triggered a default on its debt covenants that had forced it to seek a forbearance from lenders. . . .

33. Defendant Mehdizadeh has a checkered history of business failures and criminal convictions, including grand theft in 2013. Specifically, in 2013, Defendant Mehdizadeh pled no-contest to a 15-count criminal complaint that was filed against him relating to a law firm Defendant Mehdizadeh managed as a
non-lawyer. Defendant Mehdizadeh received probation and agreed to pay $450,000 as part of a plea agreement. Defendant Mehdizadeh also declared bankruptcy in July 2010, which was discharged in 2011. . . .

35. At the start of the Class Period, Mehdizadeh owned approximately 65% of Medbox’s common stock and is still “the beneficial owner of the majority of the voting power of the Company[,]” owning or controlling approximately 58% of the Company’s outstanding shares, according to the Schedule 14C Mehdizadeh filed, or caused to be filed, with the SEC on or about January 9, 2015. . . .

Several law firms have jumped on this bandwagon.  See:

  • Rosen Law Firm Announces Filing of Securities Class Action Against Medbox, Inc.
  • LEVI & KORSINSKY, LLP Notifies Investors of Class Action Against Medbox, Inc. and Its Board of Directors and a Lead Plaintiff Deadline of March 23, 2015
  • Rigrodsky & Long, P.A. Announces A Securities Fraud Class Action Lawsuit Has Been Filed Against Medbox, Inc.
  • Johnson & Weaver, LLP Files Class Action Suit against Medbox, Inc.

 

By | 2017-02-12T07:40:49+00:00 January 22nd, 2015|Medbox, Stories & Articles|Comments Off on Medbox Sued in Class Action Lawsuit
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Mehdizadeh to Replace Medbox Execs, Board

Los Angeles Business Journal:  “Vincent Mehdizadeh, founder and majority shareholder of West Hollywood’s Medbox Inc., notified investors Friday that he will replace the marijuana dispensing company’s board of directors, its chief executive and its chief financial officer.  It’s just the latest in a string of dramatic moves Mehdizadeh has made over the past year.”

By | 2015-01-28T22:21:44+00:00 January 9th, 2015|Medbox, Stories & Articles|Comments Off on Mehdizadeh to Replace Medbox Execs, Board

SEC Charges Four Promoters with Manipulating Marijuana-Related Stocks

The following is the text of an August 5, 2014, Securities & Exchange Commission press release:

“The Securities and Exchange Commission today charged four promoters with ties to the Pacific Northwest for manipulating the securities of several microcap companies, including marijuana-related stocks that the agency has warned investors about in recent weeks.

The SEC alleges that the four promoters bought inexpensive shares of thinly traded penny stock companies on the open market and conducted pre-arranged, manipulative matched orders and wash trades to create the illusion of an active market in these stocks.  They then sold their shares in coordination with aggressive promotional campaigns that urged investors to buy the stocks because the prices were on the verge of rising substantially.  However, these companies had little to no business operations at the time. The promoters reaped more than $2.5 million in illegal profits through their schemes.

Two of the companies manipulated in this case – GrowLife Inc. and Hemp Inc. – claim to be related to the medical marijuana industry.  The SEC has issued an investor alert warning about possible scams involving marijuana-related investments, noting that fraudsters often exploit the latest growth industries to lure investors into stock manipulation schemes.  Other schemes by these four promoters involved an oil-and-gas company – Riverdale Oil and Gas Corporation – and three other microcap stocks, ISM International, Allied Products Corp, and Aden Solutions.

The SEC was able to unearth the schemes through the work of its recently created Microcap Fraud Task Force.

“Our Microcap Fraud Task Force is taking direct aim at abusive practices and serial violators within the microcap markets like these four promoters seeking to exploit retail investors for personal gain,” said Michael Paley, co-chair of the SEC’s Microcap Fraud Task Force.  “In this case, we meticulously reviewed trading records and developed the evidence necessary to connect these four promoters and their coordinated trading efforts.”

The SEC’s complaint filed in federal court in Tacoma, Wash., charges the following individuals:

  • Mikhail Galas, a stock promoter who lives in Vancouver, Wash.
  • Alexander Hawatmeh, a member of Worthmore Investments LLC, which owns a stock promotion website called stockhaven.com.  He formerly lived in Vancouver and currently resides in Lincoln City, Oregon.
  • Christopher Mrowca, a stock promoter who operates Money Runners Group LLC, which has an affiliated stock promotion website called MoneyRunnersGroup.com.  He lives in Bradenton, Fla.
  • Tovy Pustovit, who owns a stock promotion website called Explosive Alerts.  He also lives in Vancouver.

In a parallel action, the U.S. Attorney’s Office for the Western District of Washington announced criminal charges against Galas, Hawatmeh, and Mrowca.

According to the SEC’s complaint, GrowLife Inc. was part of a broader online promotion of several marijuana-related stocks in early 2014.  Mrowca specifically promoted GrowLife through his Money Runners Group website and predicted that the stock price would nearly double.  Mrowca, Galas, and Hawatmeh meanwhile engaged in manipulative trading designed to increase the price and volume of GrowLife stock, and they later sold their shares for illicit profits.

Similarly, the SEC alleges that Hawatmeh, Galas, and Mrowca bought and sold approximately 41.7 million shares of Hemp Inc. in January and February 2014 while the stock was actively promoted on the Internet.  For example, one Internet tout on February 6 claimed that Hemp could reach “a REAL Possible Gain of OVER 2900%.”  During the promotion, Hawatmeh, Mrowca, and Galas engaged in manipulative wash trades and matched orders to manipulate Hemp’s common stock before selling their shares for illegal gains.

“This was a carefully planned operation by Galas, Hawatmeh, Mrowca, and Pustovit to distort the performance of specific penny stocks as they were simultaneously promoted through social media and the Internet.  As the companies’ stock prices increased, these four promoters opportunistically dumped their shares for illicit gains,” said Amelia A. Cottrell, associate director in the SEC’s New York Regional Office.

The SEC’s complaint charges Galas, Hawatmeh, Mrowca and Pustovit with violating antifraud provisions of the federal securities laws.  The SEC seeks temporary, preliminary, and permanent injunctions along with an emergency asset freeze, disgorgement, prejudgment interest, financial penalties, and orders barring the promoters from participating in a penny stock offering.

The SEC’s complaint names Nadia Hawatmeh as a relief defendant for the purposes of recovering ill-gotten gains in her brokerage account, which was used by the promoters to conduct some of their manipulative trades.

The SEC’s investigation has been conducted by Michael Paley, Eric M. Schmidt, Mona Akhtar, Joseph Darragh, and Tejal Shah.  The case was supervised by Ms. Cottrell, and the litigation will be led by David Stoelting.  The SEC appreciates the assistance of the U.S. Attorney’s Office for the Western District of Washington, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority.

By | 2017-02-04T07:38:59+00:00 August 5th, 2014|Legal Issues, Medbox, Stories & Articles, Zoned Properties & Duke Rodriguez|Comments Off on SEC Charges Four Promoters with Manipulating Marijuana-Related Stocks

SEC Warns Investors About Marijuana-Related Investments Amid Recent Trading Suspensions

The following is the text of a May 16, 2014, Securities & Exchange Commission press release:

The Securities and Exchange Commission today cautioned investors about the potential for fraud in microcap companies that claim their operations relate to the marijuana industry after the agency suspended trading in the fifth such company within the past two months.

The SEC issued an investor alert warning about possible scams involving marijuana-related investments, noting that fraudsters often exploit the latest growth industry to lure investors with the promise of high returns.  “For marijuana-related companies that are not required to report with the SEC, investors may have limited information about the company’s management, products, services, and finances,” the SEC’s alert says.  “When publicly available information is scarce, fraudsters can more easily spread false information about a company, making profits for themselves while creating losses for unsuspecting investors.”

Spearheaded by its Microcap Fraud Task Force, the SEC Enforcement Division scours the microcap market and proactively identifies companies with publicly disseminated information that appears inadequate or potentially inaccurate.  The SEC has the authority to issue trading suspensions against such companies while the questionable activity is further investigated.

As the markets opened today, the SEC suspended trading in Denver-based FusionPharm Inc., which claims to make a professional cultivation system for use by cannabis cultivators among others.  According to the SEC’s order, the trading suspension was issued “because of questions that have been raised about the accuracy of assertions by FusionPharm” concerning the company’s assets, revenues, financial statements, business transactions, and financial condition.

“Recent changes in state laws concerning medical and recreational marijuana have created new opportunities for penny stock fraud,” said Elisha Frank, co-chair of the SEC Enforcement Division’s Microcap Fraud Task Force.  “Wherever we see incomplete or misleading disclosures, we act quickly to protect investors.”

Other marijuana-related companies in which the SEC recently suspended trading are Irvine, Calif.-based Cannabusiness Group Inc., Woodland Hills, Calif.-based GrowLife Inc., Colorado Springs-based Advanced Cannabis Solutions Inc., and Bedford, Texas-based Petrotech Oil and Gas Inc.

Under the federal securities laws, the SEC can suspend trading in a stock for 10 days and generally prohibit a broker-dealer from soliciting investors to buy or sell the stock again until certain reporting requirements are met.  More information about the trading suspension process is available in an SEC investor bulletin on the topic.

“We know from experience that fraudsters follow the headlines,” said Lori J. Schock, director of the SEC’s Office of Investor Education and Advocacy, which prepared the investor alert.  “Given the attention that marijuana-related companies have attracted recently, we urge investors to exercise caution when looking at investments in this space.  Always thoroughly research the company – and the person selling the investment – before making a decision.”

By | 2017-02-04T07:38:59+00:00 May 20th, 2014|Medbox, Stories & Articles, Zoned Properties & Duke Rodriguez|Comments Off on SEC Warns Investors About Marijuana-Related Investments Amid Recent Trading Suspensions

Investor Alert: Marijuana-Related Investments

On May 16, 2014, the Securities and Exchange Commission published a detailed warning that is a must read for anybody who owns stock of or is considering purchasing stock of a company that provides  products products or services to state legal marijuana businesses.

The SEC’s Office of Investor Education and Advocacy is issuing this Investor Alert to warn investors about potential risks involving investments in marijuana-related companies. 

The SEC has seen an increase in the number of investor complaints regarding marijuana-related investments.  The SEC recently issued temporary trading suspensions for the common stock of five different companies that claim their operations relate to the marijuana industry:

The SEC suspended trading in these companies because of questions regarding the accuracy of publicly-available information about these companies’ operations.  For two of the companies, the trading suspensions were also based on potential illegal activity (unlawful sales of securities and market manipulation).

Fraudsters often exploit the latest innovation, technology, product, or growth industry – in this case, marijuana – to lure investors with the promise of high returns.  Also, for marijuana-related companies that are not required to report with the SEC, investors may have limited information about the company’s management, products, services, and finances.  When publicly-available information is scarce, fraudsters can more easily spread false information about a company, making profits for themselves while creating losses for unsuspecting investors.

Risk of Prosecution for Marijuana-Related Companies.  If you are considering investing in a company that is connected to the marijuana industry, be aware that marijuana-related companies may be at risk of federal, and perhaps state, criminal prosecution.  The Department of Treasury recently issued guidance noting: “

[T]he Controlled Substances Act (“CSA”) makes it illegal under federal law to manufacture, distribute, or dispense marijuana.  Many states impose and enforce similar prohibitions.  Notwithstanding the federal ban, as of the date of this guidance, 20 states and the District of Columbia have legalized certain marijuana-related activity.”

Marijuana-related investments may be sold in unregistered offerings and may take many forms, including microcap stocks (low-priced stocks issued by the smallest of companies) such as penny stocks (the very lowest priced stocks).

Microcap Stocks

When you buy low-priced shares of a small company (e.g., you buy a stock that trades in the “over-the-counter” (also called OTC) market), you likely are investing in penny stocks or microcap stocks.  Microcap stocks are particularly vulnerable to fraudulent investment schemes because there is often limited publicly-available information about microcap companies.  Be cautious if you see red flags of potential microcap fraud such as:

  • SEC trading suspensions (the SEC has suspended public trading of the security)
  • E-mail and fax spam recommending a stock
  • Insiders own large amounts of stock
  • False or exaggerated press releases

Even in the absence of fraud, microcap stocks are among the most risky:

  • Information about microcap companies can be extremely difficult to find, making it less likely that quoted prices in the market reflect full and complete information about the company.
  • Many microcap companies are new and have no proven track record.  Some microcap companies have no assets, operations, or revenues.  Others have products and services that are still in development or have yet to be tested in the market.
  • The stock prices of microcap companies historically have been more volatile than the stock prices of larger companies.  Since low-priced stocks trade in low volumes, any size trade can have a large percentage impact.
  • The stock of microcap companies are often quoted on the OTC Bulletin Board (also called OTCBB) or OTC Link LLC (also called OTC Link).  OTCBB and OTC Link do not require companies to apply for listing or to meet any minimum financial standards.  Most of these companies do not meet the minimum listing requirements for trading on a national securities exchange, such as the New York Stock Exchange or the Nasdaq Stock Market.

Unregistered Offerings

Check the SEC’s EDGAR database and contact your state securities regulator to find out whether the marijuana-related company has registered its securities offering with the SEC or a state securities regulator.  If the offering is not registered, exercise extreme caution if you spot any of these red flags of potential investment fraud:

  • “Guaranteed” high investment returns.  If someone promises you a high rate of return on your investment, it likely is a fraudulent investment scheme.
  • Unsolicited offers, including through social media.  A new post on your wall, a tweet mentioning you, a direct message, an e-mail, a text, a phone call, or any other unsolicited – meaning you didn’t ask for it and don’t know the sender – communication regarding an investment “opportunity” may be part of a scam.
  • Pressure to buy RIGHT NOW.  Fraudsters may try to create a false sense of urgency or pitch the investment as a “limited time only” opportunity.
  • No net worth or income requirements.  To comply with federal securities laws, many unregistered offerings are limited to accredited investors and the seller should ask you about your net worth or income.

When investing in unregistered offerings, also consider these risks:

  • You may lose your entire investment.
  • You may not be able to sell the stock easily, and you may have to hold your investment indefinitely.
  • The company may not make information about its business or financial condition publicly available.

Research the Company

As with any investment, make sure you understand the marijuana-related company’s business and its products or services.  Carefully review all materials you are given and verify the truth of every statement you are told about the investment.

Pay attention to the company’s financial statements, particularly if they are not audited by a certified public accountant (also called a CPA).

If the company files reports with the SEC, review the most recent reports.

If the marijuana-related company is a microcap company that does not file reports with the SEC, ask your broker for the “Rule 15c2-11” file (the federal securities laws may require your broker to have certain information about the company).

If the marijuana-related company is offering securities in an unregistered offering, read the offering memorandum or private placement memorandum (also called PPM), and pay particular attention to any risk factors noted.  Review the terms of any subscription agreement or other agreements for the investment.

Search SEC.gov to see whether the SEC has taken any action against the company or anyone associated with the company.

For more information about how to research an investment, read our publication Ask Questions.

Research your Broker or Investment Adviser

Research the background of the individuals and firms offering and selling you these investments, including their registration/license status and disciplinary history:

  1. Search the SEC’s Investment Adviser Public Disclosure (IAPD) database.
  2. Search the Financial Industry Regulatory Authority (FINRA)’s BrokerCheck database.
  3. Contact your state securities regulator.

Additional Resources

FINRA Investor Alert: Marijuana Stock Scams
Investor Alert: Advertising for Unregistered Securities Offerings
Investor Alert: Don’t Trade on Pump-And-Dump Stock Emails
Investor Alert: Social Media and Investing – Avoiding Fraud
Microcap Fraud Spotlight 
Microcap Stock: A Guide for Investors
Department of the Treasury Financial Crimes Enforcement Network Guidance regarding BSA Expectations Regarding Marijuana-Related Businesses

Contact the SEC on SEC.gov:

Report possible securities fraud.
Report a problem.
Ask a question.

Stay informed

Receive Investor Alerts and Bulletins from the SEC’s Office of Investor Education and Advocacy (“OIEA”) by email or RSS feed.

Visit Investor.gov, the SEC’s website for individual investors.

By | 2017-10-07T09:56:02+00:00 May 16th, 2014|Medbox, Stories & Articles, Zoned Properties & Duke Rodriguez|Comments Off on Investor Alert: Marijuana-Related Investments

The Ongoing Saga of Medbox

Southern Investigative Reporting Foundation:  Roddy Boyd, the author of “Tinkerer, Lawyer, Hustler, Lies: One Man’s Path to a Dope Fortune” wrote an April 17, 2014, Medbox article for the Southern Investigative Reporting Foundation.  All Medbox shareholders and people involved with Arizona medical marijuana dispensaries that used Medbox’ services should read the article.  Here are some quotes from the article:

Rishi Patel is on a mission: He is taking a hard look at business opportunities in the wake of Arizona’s decision to permit the sale of medical marijuana in dispensaries across the state. . . .

Patel had come across an ad from Prescription Vending Machines, a company helping folks like him get into the medical marijuana business, and in short order he was in a running dialogue with the company’s founder, an agreeable and talkative fellow named Vincent Mehdizadeh. From there, it wasn’t long before Patel and a pair of friends had struck a plan to help Prescription Vending Machines land a dispensary permit in Arizona.

Just before he wrote a very large check—his father was staking him the capital—Patel did a background search on Mehdizadeh.

After getting the report, Patel was astonished to see a laundry list of crimes and lawsuits; one more serious than the other, all of which Mehdizadeh was at the center. . . .

[Mehdizadeh] tells Patel that there has been a mistake, and that something somewhere is terribly wrong since he hasn’t been repeatedly sued or arrested. . . .

To correct the record, Mehdizadeh e-mails Patel a scan of his driver’s license and another background report. 

Shortly after the call ended, Patel opened up the files. As promised, the documents belonged to Pegah Vincent Mehdizadeh, a man from California whose spotless criminal record was the polar opposite of Pejman Vincent Mehdizadeh. . . .

And then in July 2011 Patel got his dispensary and within minutes knew that everything was wrong. The furniture was used, the location wasn’t what they’d bargained for, and even the vaunted dispensary system they’d been promised didn’t do what was advertised.

The quotes above are a small part of a very lengthy and troubling story.

By | 2017-02-12T07:40:47+00:00 May 13th, 2014|Medbox, Stories & Articles|Comments Off on The Ongoing Saga of Medbox

A Convicted Thief & a Chiropractor Claim Their Pot Company Isn’t a One-Hit Wonder

Phoenix New TimesMedbox is a company that “features patented systems that dispense medication based on biometric identification . . . . [and] turn-key consulting services to the pharmaceutical industry”  Medbox (MDBX) is a publicly traded company whose stock value was $19.91 as of May 9, 2014, which gave it a market value of $587,857,682.  Medbox is a major player in the Arizona medial marijuana dispensary industry.

On May 8, 2014, the Phoenix New Times published a devastating story about Medbox written by investigative reporter Ray Stern.  Here are some interesting quotes from the story.

“Judging by its stock, this company truly is big time.  Its products and services, however, aren’t as impressive.  Medbox machines are by no means in widespread use in Arizona’s 80 medical-marijuana dispensaries.  One drawback of the devices, as the unit at BC Wellness Center demonstrates, is that customers can’t use them legally. . . .

We spent all this money for the machine, and the customer can’t use it. . . . But the machine isn’t crucial to the dispensary’s operation . . . . ‘We could do without it.’ . . .

It’s not a glowing review of the Medbox product from one of the two Arizona dispensaries in which New Times was able to verify the existence of working Medbox machines. . . .

Vincent Mehdizadeh — founder, inventor of the dispensing machine, senior strategist, and (until his recent resignation) chief operating officer — is a convicted felon. He pleaded guilty last year to stealing from immigrants by offering them bogus legal services, avoiding a prison sentence when he paid $450,000 in restitution to victims.  Medbox owns no factories, no buildings. It rents a West Hollywood office. Last year, it had revenues of $5.2 million but didn’t turn a profit. It ended the year with about $300,000 in the bank.  What Medbox does have, though, is impressive stock. . . .

The founder of Medbox generally goes by the name Vincent Mehdizadeh.  In U.S. Securities and Exchange Commission filings, however, he calls himself P. Vincent Mehdizadeh.  The P is for Pejman, listed as his true first name in a 2013 plea agreement with the Los Angeles County District Attorney’s Office — a deal that allowed him to escape serving four years in prison. A civil complaint filed in a California court by theft victim Abdul Ahmed states another a.k.a. for Mehdizadeh: Vince Zadeh. [See the Statement of Issues and Supporting Facts, Declaration of Abdul Ahmedts with Evidentiary Exhibits . . . Memorandum of Points of Authorities in Support of Prejudgement Attachment filed in this lawsuit.] . . .

Over recent months, Medbox has been the target of another writer, Roddy Boyd of the Southern Investigative Reporting Foundation, who wrote lengthy articles about it published on September 30, 2013, and on April 17 [See “What’s in a Name: The Ongoing Saga of Medbox“].  A week before Boyd’s most recent article appeared, Mehdizadeh resigned as director and COO of Medbox, saying in a news release he’d done so to make the company ‘less prone to attack.’  [Roddy Boyd is the author of another scathing story about Medbox and Mehdizadeh called “Tinkerer, Lawyer, Hustler, Lies: One Man’s Path to a Dope Fortune.”] . . .

The June 21, 2013, plea agreement and subsequent news releases by the California agencies involved in the case are available online and show that Mehdizadeh pleaded guilty to two counts of grand theft and admitted to a “special allegation of engaging in a pattern of related felony conduct involving takings in excess of $100,000.”  In addition to the hefty restitution order, he was sentenced to five years’ probation.

Read the article because it contains much more information about Medbox and its machines.

By | 2017-02-12T07:40:01+00:00 May 12th, 2014|Medbox, Stories & Articles|Comments Off on A Convicted Thief & a Chiropractor Claim Their Pot Company Isn’t a One-Hit Wonder

Another Citron Reseach Report on Medbox

A February 24, 2014, report by Citron Research starts with:

“As a service to all retail investors who do not have access to a Bloomberg terminal, Citron publishes the latest stock sales Form 144’s filed by Bruce Bedrick, CEO of Medbox (OTCBB:MDBX), as he sells $4.5 million worth of stock and tries to hide it from investors and the SEC. Here are the documents Form 144 #1 and Form 144 #2. And here are some of the more entertaining things we noticed

Read the entire report.

Query: If you know of a licensed medical marijuana dispensary in the US that has a fully operational Medbox medical marijuana dispensing system please leave a comment with the name and address of the dispensary.

Query: If Citron Research is making untrue defamatory statements about Medbox, why doesn’t Medbox sue Citron Research?

See “Zoned Properties, Inc. Acquires Real Estate for Key Arizona Medical Marijuana Dispensary.”

By | 2014-04-27T11:14:43+00:00 March 8th, 2014|Medbox, Stories & Articles|Comments Off on Another Citron Reseach Report on Medbox

Medbox COO Vincent Mehdizadeh Defends Citron Research’s Charges by Claiming Its Editor is a Bad Dude

Vincent Chase, Inc., alleged to be the largest shareholder of Medbox, Inc. issued a letter to Medbox shareholders in response to Citron Research’s scathing review of Medbox.  The letter starts with:

We are being attacked by a company called Citron Research, whose principal admits to making his living by short selling companies. Now, I have never made any allusions of having a blemish-free past myself and have been painfully honest in company filings in that regard, but I don’t go around casting stones at others. In my opinion, if you are going to take that approach and pick on others, you better have a spotless past yourself.  Here is some background on our opponent:

We note two interesting items about the letter to Medbox shareholders:

1. It fails to mention that the sender of the letter, P. Vincent Mehdizadeh of Vincent Chase, Inc., is the COO and acting CFO of Medbox.

2. It does not dispute any of the allegations contained in Citron Research’s report.

By | 2014-04-27T11:15:05+00:00 February 21st, 2014|Medbox, Stories & Articles|Comments Off on Medbox COO Vincent Mehdizadeh Defends Citron Research’s Charges by Claiming Its Editor is a Bad Dude

Medbox CEO Bruce Bedrick vs. Citron’s Andrew Left on CNBC

By | 2014-04-27T11:15:23+00:00 February 19th, 2014|Medbox, Stories & Articles|Comments Off on Medbox CEO Bruce Bedrick vs. Citron’s Andrew Left on CNBC

Medbox Responds to Critics and Issues Status Update to Company Shareholders

The following is a Medbox press release dated February 18, 2014:

Medbox, Inc. (OTC Markets: MDBX) (www.medboxinc.com), a leader in providing consulting services and patented systems to the medical and retail industries, issued a status update to its shareholders on past, present, and future projects. Company executives also commented on bloggers looking to discredit the company for financial gain and law firms looking to capitalize on misinformation in order to solicit clients.

The following is a summary of key events occurring in recent weeks:

  • Medbox filed its Form 10 with the SEC in January and will be an SEC filer, with all the burdens and benefits that result from that status, as of mid-March 2014.
  • Medbox issued a special stock dividend to shareholders and that was announced by FINRA on February 3, 2014.
  • Medbox continues to accept dispensary licensing clients in Nevada, Illinois, Colorado, Washington, and Oregon.

Company executives clarified their position on the restatement of financials that accompanied the Form 10 registration statement filed with the SEC as a maturation process in becoming an SEC filer.

“The company undertook a project to bring all accounting functions in house and during that lengthy process we discovered some errors in accounting which we have since corrected in the latest financials included in the Form 10. The point is getting it right and being fully transparent with our shareholders at all times,” stated Vincent Mehdizadeh, Board Chairman at Medbox, Inc. “The company has, as part of those corrections, instituted better controls over financial reporting to avoid further corrections. In addition, it is important to note that revenues for the nine months of 2013 had increased over the comparative period of the prior year (as corrected) and we are continuing to add skilled people to accelerate our growth in 2014. Unfortunately, when you are the most visible company in the space, with a large market capitalization, you become a target.”

Company executives caution company shareholders that while the media has been extremely supportive of Medbox as one of the only viable medical marijuana related public companies, with success there will always be opponents that publish deceptive and misleading articles about the company and its executives.

In addition, company executives clarified that the company offers support services to the medical marijuana sector on an arm’s length basis. Often times in a state where applications are being accepted for marijuana dispensary licensing, some landlords would not lease to the newly formed non-profit entities formed for the company’s clients. As a result, in some rare instances and simply as an absolute benefit to their clients, it was agreed that Medbox would lease the properties and assign all rights to the applicant, with the permission of the landlord.

“We go the extra mile for our clients and that is evident through our glowing testimonials displayed on our websites,” stated Dr. Bruce Bedrick, CEO at Medbox, Inc. “Interestingly, with the recent banking policy guidance by the federal government, we can now start to develop an additional revenue stream of acquiring properties and leasing to our dispensary operator clients. This is one of many revenue streams that Medbox is actively developing given the current climate and relaxed federal posture.”

About Medbox, Inc: 

Medbox is a leader in the development, sales and service of automated, biometrically controlled dispensing and storage systems for medicine and merchandise. Medbox has offices in New York, Arizona, Florida, and has their corporate headquarters in Los Angeles.

Medbox offers their patented systems, software and consulting services to pharmacies, dispensaries, urgent care centers, drug rehab clinics, hospitals, prison systems, hospice facilities, and medical groups worldwide. In addition, through its wholly owned subsidiary, Vaporfection International, Inc. (www.vaporfection.com), the Company offers an industry award winning medical vaporizer product.

Medbox, Inc. is a publicly traded company, and is quoted on the OTC Markets, ticker symbol MDBX.

Forward-Looking Statements: The statements in this press release constitute forward-looking statements within the meaning of federal securities laws. Such statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, such forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We do not take any obligation to update any forward-looking statement to reflect events or developments after a forward-looking statement was made.

For more information on Medbox, please contact us at (800) 762-1452 or go online to www.medboxinc.com.

Contacts: Investor Relations  Stephen Hart Hayden IR  +1- 917-658-7878  hart@HaydenIR.com

By | 2017-02-12T07:40:02+00:00 February 19th, 2014|Medbox, Stories & Articles|Comments Off on Medbox Responds to Critics and Issues Status Update to Company Shareholders

Citron Research Accuses Medbox of Multiple Frauds

Citron Research published a scathing analysis of Medbox, a publicly traded company that is very active in the Arizona medical marijuana dispensary industry.  The article starts with the following information about Citron Research:

Citron Research is in our 13th year of publishing investigative research into suspect publicly traded companies. During that span, Citron has exposed more corporate fraud than any other source on Wall Street. Our published work has focused on over 150 companies, some with very notable individual investors and firms publicly “on the other side”. Our writings have warned the public to steer clear of investments rigged to vaporize their cash. All of this writing is available for anyone to evaluate. Much of our work, especially in our early years of publishing, focused on the sparsely regulated Over – the – Counter and Pink Sheets markets When it comes to exposing fraud on the Pink Sheets and the OTCBB, Citron has NEVER been wrong. Yes, we know NEVER is a bold statement but it is what it is.

Here are a few choice allegations made in the report:

“this report will focus on the systemic fraud throughout this company and the stock promotion behind the fraud that has brought this worthless company to a $1 bil + market cap. . . .”

“Medbox’s founder and COO Vincent Mehdizadeh was formerly busted for dispensing legal advice without a law license . . . .”

“It seems like Medbox management cannot help themselves–they cannot control their serial lying in promoting their stock.”

The article closes with my favorite part of the report:

“Dear Vincent and Bruce, Let’s skip the bullshit and cut right to the chase. Your situation is hopeless.  Your track record of corporate misdeeds at Medbox and misleading shareholders is beyond salvage. I know when you read this report, you’ll feel a lot of righteous indignation and your first reaction will be to want to sue me. I hope you do! If you would be so kind as to file a suit, my attorneys will use the power of discovery afforded by civil trial procedures right here in California to unravel this entire scam and lay it on the doorstep of Federal regulators. There is truly nothing you can say to defend yourself from the contents of this report except to contact your personal lawyers immediately and ask them what steps you should take so you can avoid going to jail.  Nothing more to be said. In the meantime, I sincerely hope you and your team have not sold a single share of restricted stock away from the market–because we will find it in discovery. Please sue me. Editor, Citron Research.”

The report links to another nasty Medbox article called “Tinkerer, Lawyer, Hustler, Lies: One Man’s Path to a Dope Fortune.”

By | 2015-01-28T22:53:41+00:00 February 18th, 2014|Medbox, Stories & Articles|Comments Off on Citron Research Accuses Medbox of Multiple Frauds

Tinkerer, Lawyer, Hustler, Lies: One Man’s Path to a Dope Fortune

If you are a Medbox, Inc., stockholder or considering purchasing stock Medbox is offering in its current public offering you must read the three stories listed below.

After an extensive investigation, the Southern Investigative Reporting Foundation published a blockbuster story about publicly traded Medbox and its front man Pejman “Vincent” Mehdizadeh, “a 34-year-old with a consistent record of legal problems going back to age 18, only one of which was disclosed to investors.”  Here are some choice statements from the story entitled “Tinkerer, Lawyer, Hustler, Lies: One Man’s Path to a Dope Fortune“:

“In the spring of 2010, exasperated police detectives from all over Los Angeles began phoning the county’s consumer affairs department to complain that an outfit calling itself the Active Lawyers Referral Service had misled its working-class customers from 2005 to 2008 by referring them to a law firm that billed them for work—but never finished the job. Their tales got positively woolly: Several claimed that Pejman Vincent Mehdizadeh, the founder of the referral service and the manager of the law firm, had posed as a lawyer and his father, Parviz, had given them legal advice as they sought work visas. (Pejman and Parviz use the names Vincent and Paul, respectively, for business.)

Three years later the consumer affairs unit, along with the Los Angeles County district attorney’s office, sought to prosecute Vincent Mehdizadeh, who, after months of wrangling, pleaded no contest to various criminal charges. He consented to pay $450,000 in restitution to his victims, thereby avoiding a four-year sentence in a California state penitentiary. (His father, Parviz, pleaded no contest to one misdemeanor charge.) . . .

Running his own dispensary business had proved to be a profound headache for Mehdizadeh: In 2007 the Drug Enforcement Agency raided Herbal Nutrition Center, his dispensary; and a lawsuit resulted from another dispensary transaction in which he was accused of posing as a lawyer and a real estate agent at different times. (Mehdizadeh told the Southern Investigative Reporting Foundation that he paid $350,000 to the plaintiffs to settle the matter and “make it go away.”) . . .

Mehdizadeh’s many legal problems have never been disclosed to Medbox investors—except for a 2007 incident when he failed to produce a clear title to a car he was selling yet accepted a credit card payment for the vehicle anyway. The consumer affairs investigation, which had been headed for trial with the possibility of prison time for Mehdizadeh before he pleaded no contest, was blithely waved away in a Medbox filing as “a private matter.”

Read the whole troubling story.  One thing the story did not mention was whether there is a single medical marijuana vending machine actually used in daily operations of a medical marijuana dispensary in any of the states that have legalized medical marijuana.  If you know of an operating Mebox medical marijuana vending machine please let me know the location and name of the dispensary.

See also Yahoo Finance’s story entitled “Medbox: Emerging Marijuana Player, or Disaster Waiting to Happen?” that contains these statements:

“What the foundation reports ought to give investors ample pause before hopping on the erstwhile legal pot gravy train stock promoters are touting. . . .

Make no mistake: What Mehdizadeh was getting rapped for is well north of a citation for drinking beer underage and serves to raise serious questions about what is known as “Fitness for Office.”

There were charges—and a series of no contest pleas–for breaking and entering, credit card fraud, solicitation of a prostitute and trespass with intent to injure.

What is even less savory is how a legal referral business Mehdizadeh ran with his dad and a job he had managing a law office in Los Angeles between 2005 and 2008 went so far off the rails that the District Attorney’s office was ready to take him to trial on consumer fraud this summer. Mehdizadeh agreed to a plea bargain that has him paying $450,000 in restitution to avoid a four-year jail sentence.

First to tell anyone that lessons aplenty have been learned and that he stopped screwing up years ago–Mehdizadeh also acknowledged posing as a lawyer without having gone to law school–the suddenly quite rich entrepreneur is laser-focused on Medbox’s future.

Which should be the real cause for concern among Medbox shareholders.”

Southcoast Today published a story called “High-profile marijuana millionaire behind multiple RMD applicants; locals cry foul” that states:

“Vincent Mehdizadeh, a West Coast marijuana millionaire with a conviction for defrauding immigrants, is backing nearly one in 10 of prospective dispensaries in the Bay State, causing some local competitors to cry foul.”

Update:  Medbox issued a press release dated October 16, 2913, that addresses recent negative publicty about Vincent Mehdizadeh.  The press release states:

“Company executives caution company shareholders that while the media has been extremely supportive of Medbox as one of the only viable medical marijuana related public companies, with success there will always be detractors that publish deceptive and misleading articles about the company and its executives.

‘I have witnessed a person calling himself a professional journalist resort to defamatory statements, the majority of which are in most cases half-truths and in some cases a complete fabrication of events that purportedly transpired in my life before I founded Medbox,’ stated Vincent Mehdizadeh, Chief Operations Officer of Medbox, Inc.

Mehdizadeh states that he will not be using company funds to seek legal recourse against the reporter in question.

‘I’d rather spend company funds on further developing our business,’ said Mehdizadeh. ‘I will self-fund any recourse I have planned regarding this particular journalist. When confronted, this journalist initially denied having any ties to short interest players in MDBX stock, but upon further inquiry admitted the relationships in an email. I look forward to seeing just how deep that rabbit hole goes’.”

While doing a Google search today I found a June 28, 2013, press release about the Mehdizadehs, father and son, issued by the LA County Department of Consumer Affairs that states:

“A father-and-son team who pretended to be a law firm and defrauded dozens of victims seeking immigration help have pled guilty to multiple charges of grand theft.

Brian J. Stiger, Director of the County of Los Angeles Department of Consumer Affairs (DCA), has announced today that Pejman Vincent Mehdizadeh and Parviz Paul Mehdizadeh were ordered to pay full restitution to victims who reported their losses to DCA.

The Mehdizadehs took money for immigration cases and either did not file or filed fraudulent documents with U.S. Citizenship and Immigration Services (USCIS). They are responsible for defrauding victims out of hundreds of thousands of dollars while offering services in areas such as immigration, bankruptcy, divorce, and mortgage modifications, often without providing any services. Many of the Mehdizadehs’ victims were forced to leave the country because of their failure to file appropriate documents.

Pejman Vincent Mehdizadeh, 34, of Los Angeles , pled to two felony grand theft counts and Parviz Paul Mehdizadeh, 78, of Calabasas, pled to one misdemeanor count.  Restitution will approach a half a million dollars, not including money distributed from the State Bar of California Restitution Fund, most of which has already been collected and distributed to the known victims.

‘“Immigration consultants often tell consumer s that they have ‘special connections’ or know about secret programs to help immigrants become legal citizens,’ Director Stiger said. ‘They will say anything to gain your trust and take your money. Consumers should remember that if it sounds too good to be true, it probably is.’

The Mehdizadehs also ran a lawyer referral service, under the name Active Lawyer Referral Service, and referred clients to themselves.

The prosecutors were Dana Aratani and Kathleen Tuttle of the Los Angeles County District Attorney’s office.”

By | 2017-02-12T07:40:00+00:00 October 16th, 2013|Medbox, Stories & Articles|Comments Off on Tinkerer, Lawyer, Hustler, Lies: One Man’s Path to a Dope Fortune

MedBox’ July 2013 S-1 Filed with the SEC

MedBox, Inc., filed its S-1 Form with the Securities & Exchange Commission as of July 17, 2013.  The S-1 says MedBox intends to raise as much as $98,000,000 from its securities offering.  Here are some statements made in the S-1:

Medbox, Inc. is a Nevada corporation. We currently operate through seven wholly-owned subsidiaries:

Prescription Vending Machines, Inc., a California corporation, dba Medicine Dispensing Systems in the State of California (“MDS”), which distributes our Medbox™ product and provides related consulting services;

Vaporfection International, Inc., a Florida corporation through which we distribute our medical vaporizing products and accessories pursuant to a recent acquisition;

Medicine Dispensing Systems, Inc., an Arizona corporation, which provides our consulting services in Arizona;

Mini-Storage Solutions, Inc., a California corporation that produces and will market our Safe Access Storage Locker product;

Medbox Rx, Inc., a California corporation that produces and will market our Rx product line including Lockbox Rx and Sample-Safe;

Medbox, Inc., a California corporation that is currently inactive and which has the same name as the Company; and

Medbox Leasing, Inc., a California corporation that is currently inactive. . . .

We expect to receive net proceeds from this offering of approximately $75 million . . . . We intend to use the net proceeds of the offering: (i) to expand the marketing of our existing products and services; (ii) to expand our product lines, including further development and marketing of our new products, initially our Rx line of products and acquiring additional licenses to enhance our existing products or develop new products; (iii) for research and development, including the development of new products; and (iv) for working capital and other general corporate purposes, including purchasing inventory. . . .

If any of the following events occur, our business, financial condition and results of operations could be materially adversely affected.  In such case, the value and trading price of our common stock could decline, and you may lose all or part of your investment.

  • Our continued success is dependent on additional states legalizing medical marijuana and additional counties in California passing legislation to allow dispensaries. . . .
  •  The alternative medicine industry faces strong opposition. . . .
  •  Marijuana remains illegal under federal law. . . .
  • Our clients may have difficulty accessing the service of banks, which may make it difficult for them to purchase our products and services. . . .
  • We have a limited operating history and may not succeed. . . .
  • We may require additional capital to finance our operations in the future, but that capital may not be available when it is needed and could be dilutive to existing stockholders. . . .
  • Our financial statements may not be comparable to those of other companies. . . .
  •  The success of our new and existing products and services is uncertain. . . .
  • Our business is dependent upon continued market acceptance by consumers. . . .
  • If we are able to expand our operations, we may be unable to successfully manage our future growth. . . .
  •  We primarily depend on a single product for our revenue. . . .
  •  We may be unable to adequately protect or enforce our patents and proprietary rights. . . .
  • We do not have and independent board of directors which could create a conflict of interests and pose a risk from a corporate governance perspective. . . .
  •  We depend upon key personnel, the loss of which could seriously harm our business. . . .
  • Our management controls a large block of our common stock that will allow them to control us. . . .
  • We do not expect to pay any cash dividends in the foreseeable future. . . .

Our revenues increased a modest 2.4%, to $3.53 million, during the year ended December 31, 2012 . . . . (more…)

By | 2014-04-27T11:18:17+00:00 August 23rd, 2013|Medbox, Stories & Articles|Comments Off on MedBox’ July 2013 S-1 Filed with the SEC

MedBox Machines – Helpful or Hype?

Toke of the Town:  “MedBox is a publicly traded company (MDBX) that specializes in the development, sales and service of automated, biometrically-controlled dispensing systems for medicine and merchandise. They claim to currently have over 150 pieces of technology out in the field. . . . [MedBox has] gone so far as to publicly lobby against the placement of public marijuana vending machines . . . . Critics of MedBox seem to be growing louder by the day, voicing complaints not just about the technology itself and what it means for the medical marijuana industry”

MedBox news:

  • “Medbox Supports an Outright Ban on Marijuana Vending Machines in San Diego”

See also “MedBox’ July 2013 S-1 Filed with the SEC.”

By | 2017-02-12T07:40:00+00:00 August 23rd, 2013|Medbox, Stories & Articles|Comments Off on MedBox Machines – Helpful or Hype?

Arizona Medical Marijuana Dispensaries Unduly Burdened by State Rules, Judge Says

Phoenix New Times:  “Another favorable court ruling for the Arizona Medical Marijuana Act means that would-be dispensaries have much more time to set up operations.  Maricopa Superior Court Judge Randall Warner’s July 29 ruling, released Wednesday, stops the state from denying dispensary approvals because of failure to meet a set deadline. . . . The case, brought by Total Health & Wellness and other Medbox-affiliated dispensary companies”

The case is Total Health & Wellness, Inc., vs. State of Arizona.

By | 2014-04-27T11:20:13+00:00 July 31st, 2013|AZ Marijuana Law Lawsuits, Medbox, Stories & Articles|Comments Off on Arizona Medical Marijuana Dispensaries Unduly Burdened by State Rules, Judge Says

Vincent Mehdizadeh Pleads Guilty to Two Felony Grand Theft Counts

The following is the text of a June 28, 2013, press release issued by the Los Angeles County Department of Consumer Affairs about Pejman Vincent Mehdizadeh, a founder and CEO of Medbox:

“Father and Son Team of Phony Immigration Consultants Convicted of Fraud, Must Pay Nearly One Half Million Dollars in Restitution to Victims

LOS ANGELES – A father and son team who pretended to be a law firm and defrauded dozens of victims seeking immigration help have pled guilty to multiple charges of grand theft.

Brian J. Stiger, Director of the County of Los Angeles Department of Consumer Affairs (DCA ), has announced today that Pejman Vincent Mehdizadeh and Parviz Paul Mehdizadeh were ordered to pay full restitution to victims who reported their losses to DCA.

The Mehdizadehs took money for immigration cases and either did not file or filed fraudulent documents with U. S. Citizenship and Immigration Services (USCIS). They are responsible for defrauding victims out of hundreds of thousands of dollars while offering services in areas such as immigration, bankruptcy, divorce, and mortgage modifications, often without providing any services.

Many of the Mehdizadehs’ victims were forced to leave the country because of their failure to file appropriate documents. Pejman Vincent Mehdizadeh, 34, of Los Angeles, pled to two felony grand theft counts and Parviz Paul Mehdizadeh, 78, of Calabasas, pled to one misdemeanor count. [emphasis added]

Restitution will approach a half a million dollars, not including money distributed from the State Bar of California Restitution Fund, most of which has already been collected and distributed to the known victims.

“Immigration consultants often tell consumers that they have ‘ special connections ’ or know about secret programs to help immigrants become legal citizens,” Director Stiger said. “They will say anything to gain your trust and take your money. Consumers should remember that if it sounds too good to be true, it probably is.”

The Mehdizadehs also ran a lawyer referral service, under the name Active Lawyer Referral Service, and referred clients to themselves. The prosecutors were Dana Aratani and Kathleen Tuttle of the Los Angeles County District Attorney’s office

Update: See Mr. Mehdizadeh’ statement about his felony convictions in a press release entitled “Target of LA Criminal Investigation Has 13 Felony Counts Dismissed and Walks Away Vindicated.”

By | 2015-04-06T18:57:50+00:00 June 28th, 2013|Medbox, Stories & Articles|Comments Off on Vincent Mehdizadeh Pleads Guilty to Two Felony Grand Theft Counts

Entrepreneurs Learn How to Use a Medical Marijuana Vending Machine

Boston Magazine:  “With reggae music playing through the speakers inside a meeting room at the Sheraton, nearly 100 people interested in the emerging medical marijuana market in Massachusetts gathered on Wednesday to find out more about the state laws—and how to use a pot vending machine.  Hosted by Dr. Bruce Bedrick, CEO of MedBox, a national medical marijuana dispensary support company that produces biometrically controlled machines, potential business owners sat in on a three-hour seminar . . . . Bedrick says 150 of the company’s machines are in use around the U.S. and Canada and that the machines offer ‘an extra layer of security’”

By | 2014-04-27T11:20:34+00:00 April 5th, 2013|Medbox, Stories & Articles|Comments Off on Entrepreneurs Learn How to Use a Medical Marijuana Vending Machine

Company Hopes to Bring 30 Marijuana Dispensing Machines to San Diego

ABC 10 News:  “They dispense snacks and movies, but vending machines in San Diego may soon be kicking out a different product — marijuana.  Those medical marijuana dispensaries shut down during a crackdown in 2011 could soon reappear in San Diego, along with some high-tech help.  ‘It’s armor-coated. Second, it’s 800 pounds,’ said Bruce Bedrick, CEO of Medbox.”

By | 2015-04-06T18:56:51+00:00 March 11th, 2013|California News, Medbox, Stories & Articles, Video|Comments Off on Company Hopes to Bring 30 Marijuana Dispensing Machines to San Diego

Recreational Marijuana Users in Washington & Colorado could get Pot from Vending Machines

NBC News.com:  “If a California company has its way, recreational marijuana users in Colorado and Washington state will one day be able to get their pot out of vending machines. Such machines are already in use in some states where medical marijuana is legal, but now the maker’s founder says the company is working to adapt the machines to comply with new laws in Colorado and Washington, where adults can legally use marijuana for recreation. . . . Hollywood-based Medbox, a public company, is offering up its expertise in convenient delivery systems.”

By | 2014-04-27T11:21:07+00:00 January 4th, 2013|Colorado News, Medbox, Stories & Articles|Comments Off on Recreational Marijuana Users in Washington & Colorado could get Pot from Vending Machines

Marijuana Dispensing Machine Maker’s Stock Price Up 3,000%

Market Watch:  “A company that creates medical-marijuana dispensing machines says its stock is getting way too high.  Medbox MDBX -90.24%   shares surged 3,000% this week — from roughly $4 Monday to $215 Thursday — before falling to $100 after executives sought to dampen investor enthusiasm. . . . The stock, which fell around 50% in early trading Friday, still hovers at $100. “We believe an appropriate trading range is between $5 and $10 but, alas, the market will do what it will do,” says Medbox founder Vincent Mehdizadeh. “

By | 2014-04-27T11:21:27+00:00 November 17th, 2012|Medbox, Stories & Articles|Comments Off on Marijuana Dispensing Machine Maker’s Stock Price Up 3,000%

Medicine Dispensing Systems, Inc. and Kind Clinics, LLC Sue Over Alleged Defamation of Vending Machines

Arkansas Matters.com:  “The Arkansas Family Council Action Committee has been sued over statements earlier this week about what it called ‘marijuana vending machines.’  Medicine Dispensing Systems, Inc. (MDS) and Kind Clinics, LLC filed suit in Federal Court in Little Rock this morning, citing ‘false allegations’ by Family Council President Jerry Cox, a staunch opponent of Issue 5, the Arkansas Medical Marijuana Act.”

The complaint alleges:

“Defendants made defamatory statements about the MDS. Defendants’ website refers a reader to the medbox website, and used a replica of the MDS. These statements were published on the Defendants’ website and numerous newspapers and articles on the world wide web. Furthermore, Mr. Cox gave several interviews portraying Plaintiffs’ products as “vending machines” that sell marijuana without any prescription to the general public and at convenience stores. These statements are absolutely false. As a result ofthe Defendants’ conduct, Plaintiffs suffered damages as described above. Defendants’ conduct also injured Plaintiffs and diminished their goodwill.”

Defendants made defamatory statements about the MDS. Defendants’ website refers a reader to the medbox website, and used a replica of the MDS. These statements were published on the Defendants’ website and numerous newspapers and articles on the world wide web. Furthermore, Mr. Cox gave several interviews portraying Plaintiffs’ products as “vending machines” that sell marijuana without any prescription to the general public and at convenience stores. These statements are absolutely false. As a result ofthe Defendants’ conduct, Plaintiffs suffered damages as described above. Defendants’ conduct also injured Plaintiffs and diminished their goodwill.

See “Marijuana vending machine company sues AR Family Council” that states: “The company that produces medical marijuana vending machines sued Family Council Action Committee and Jerry Cox on Friday for defamation, negligence and trademark violations related to a press conference earlier this week.”

Check out the Complaint and other legal documents filed with the federal district court:

Medbox vs Family Council Action Commitee & Jerry Cox (710.9KB)
Motion for Temporary Restraining Order (91.7KB)
Brief in Support of Temporary Restraining Order (188.5KB)
By | 2015-04-06T18:55:46+00:00 November 3rd, 2012|Medbox, Stories & Articles|Comments Off on Medicine Dispensing Systems, Inc. and Kind Clinics, LLC Sue Over Alleged Defamation of Vending Machines