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.”

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.

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  [email protected]

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.”