Variety: “At first blush it sounds like something out of a Cheech & Chong movie, but in fact it’s a serious effort. Fusion, the startup cabler run by ABC News and Univision, has named journalist Ryan Nerz as its chief cannabis correspondent.”
CBS Denver: “More people are claiming they are being pulled over out of state to see if they have marijuana simply because they have Colorado license plates. They strongly suspect it’s because Colorado stores now legally sell marijuana to those over the age of 21. The Colorado Drug Investigators Association says there have been a lot of seizures of marijuana from cars leaving Colorado and going out of state. Drivers are complaining they are being stopped for no good reason.”
FINRA is the Financial Industry Regulatory Authority. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation of the securities industry. FINRA is not part of the government. It is an independent, not-for-profit organization authorized by Congress to protect America’s investors by making sure the securities industry operates fairly and honestly.
FINRA issued an investor alert warning people about possible marijuana stock scams. Here are some choice quotes from FINRA’s Marijuana Stock Scam alert.
We are reissuing this alert to warn investors not only about the potential for fraud in this arena, but also to reiterate the risks of investing in thinly traded companies about which little is known. Regardless of industry sector, any so-called “hot” stock can burn your portfolio. Rather than getting swept away, take time before you invest to learn more about the company, its products or services and the people running it. . . .
Like many investment scams, pitches to invest in potentially fraudulent marijuana-related companies may arrive in a variety of ways—faxes, email or text message invitations to webinars, infomercials, tweets or blog posts. Regardless of how you first hear about them, the offers almost always contain hallmarks of “pump and dump” ploys. Specifically, fraudsters lure investors with aggressive, optimistic—and potentially false and misleading—statements or information designed to create unwarranted demand for shares of a small, thinly traded company with little or no history of financial success (the pump). Once share prices and volumes reach a peak, the cons behind the scam sell off their shares at a profit, leaving investors with worthless stock (the dump). . . .
To avoid potential marijuana-related stock scams: . . . .
Know where the stock trades. Most unsolicited spam recommendations involve stocks that do not trade on The NASDAQ Stock Market (NASDAQ OMX), the New York Stock Exchange (NYSE Euronext) or other registered national securities exchanges. Instead, these stocks may be quoted on an over-the-counter (OTC) quotation platform like the FINRA-operated Over-the-Counter Bulletin Board (OTCBB) and the platform operated by OTC Markets Group, Inc. . . .
Be wary of frequent changes to a company’s name or business focus. Name changes and the potential for manipulation often go hand in hand. One low-priced stock now claiming to be in the medical marijuana business has had four name changes in the past 10 years. Another company switched from the coffee business to focus “on the rapidly emerging medical marijuana industries.” . . .
If a Problem Occurs
If you believe you’ve been defrauded or treated unfairly by a securities professional or firm, file a complaint. If you suspect that someone you know has been taken in by a scam, send a tip.
If you own or operate or are involved in management of an Arizona medical marijuana dispensary you need to take extra care to prevent people from hacking into your computer systems, camera systems and dispensary agent records of the Arizona Department of Health Services. Many types of computer hacks are felonies under Arizona criminal law. Today I contacted an Assistant Arizona Attorney General and discussed the following statute:
Arizona Revised Statutes Section 13-2316.A states:
A person who acts without authority or who exceeds authorization of use commits computer tampering by:
1. Accessing, altering, damaging or destroying any computer, computer system or network, or any part of a computer, computer system or network, with the intent to devise or execute any scheme or artifice to defraud or deceive, or to control property or services by means of false or fraudulent pretenses, representations or promises.
2. Knowingly altering, damaging, deleting or destroying computer programs or data.
3. Knowingly introducing a computer contaminant into any computer, computer system or network.
4. Recklessly disrupting or causing the disruption of computer, computer system or network services or denying or causing the denial of computer or network services to any authorized user of a computer, computer system or network.
5. Recklessly using a computer, computer system or network to engage in a scheme or course of conduct that is directed at another person and that seriously alarms, torments, threatens or terrorizes the person. For the purposes of this paragraph, the conduct must both:
(a) Cause a reasonable person to suffer substantial emotional distress.
(b) Serve no legitimate purpose.
6. Preventing a computer user from exiting a site, computer system or network-connected location in order to compel the user’s computer to continue communicating with, connecting to or displaying the content of the service, site or system.
Arizona Revised Statutes Section 13-2316.E states:
Computer tampering pursuant to subsection A, paragraph 1 of this section is a class 3 felony. Computer tampering pursuant to subsection A, paragraph 2, 3 or 4 of this section is a class 4 felony, unless the computer, computer system or network tampered with is a critical infrastructure resource, in which case it is a class 2 felony. Computer tampering pursuant to subsection A, paragraph 5 of this section is a class 5 felony.
US News & Word Report: “California resident Valerie Okun is one step closer to reclaiming medical marijuana seized by Arizona police near the Mexican border in 2011. The U.S. Supreme Court declined Monday to review state court rulings that found Okun is entitled to the return of her marijuana, currently held by the Yuma County Sheriff’s Office. . . . The Superior Court in Yuma County and the Arizona Court of Appeals Division One previously sided with Okun.”
Does anybody recognize the man in the picture below? Who is he? When was the picture taken and why? If you know this man send an email to [email protected] and identify the man and anything you know about the picture.
CBS Seattle: “An Idaho state trooper arrested and fully searched a 70-year-old Washington man’s vehicle solely because he had a Colorado license plate – a state where marijuana is legal – a federal ‘license plate profiling’ lawsuit alleges. . . . Roseen’s federal lawsuit seeking punitive damages alleges that Klitch, the second officer Christensen, Payette County Sheriff’s Deputy Webster (first names unlisted), and the Idaho State Police violated his Fourth, Fifth and 14th Amendment Rights and claims the search of his car was unjustified.
The Oregonian: “Brian Stroh is not taking any chances. Aware of the inherent risks associated with his line of work, Stroh pays monthly for armed security guards to assist him in guarded revenue transport and facility supervision. He’s planning to use lockboxes and a variety other methods to store his money, which he will keep away from his home and place of employment. And while he’s taking major precautions, he’s even more worried about the people buying his product. His business: marijuana production and processing, one of Washington’s first to be licensed since the state legalized cannabis for recreational use. His worry: the continued federal prohibition of marijuana, which prevents banks from offering any legal financial services to state-licensed cannabis businesses. With marijuana retailers scheduled to open in June, prospective business owners are worried the state industry could be plagued with violent crime.”
Forbes: ““The Washington legislative proposals will create a licensing scheme that permits large-scale marijuana cultivation and distribution,” Durkan and Ormsby wrote in a letter to Gregoire. “This would authorize conduct contrary to federal law . . . Accordingly, the Department could consider civil and criminal legal remedies regarding those who set up marijuana growing facilities and dispensaries . . . Others who knowingly facilitate the actions of the licensees, including property owners, landlords, and financiers, should also know that their conduct violates federal law. In addition, state employees who conducted activities mandated by the Washington legislative proposals would not be immune from liability under the CSA [Controlled Substances Act].”
Phoenix New Times: “In a ruling with wide impact on the Arizona medical-marijuana program, Zander Welton and his family have won their battle to provide extracts to the boy for his seizures. The East Valley family sued on October 29 in Maricopa County Superior Court, receiving legal help from the American Civil Liberties Union of Arizona, after threats of possible felony prosecution by County Attorney Bill Montgomery. Judge Katherine Cooper sets Montgomery straight in a ruling filed on Friday, telling him and the state plaintiffs that the Arizona Medical Marijuana Law ‘authorizes qualifying patients to use extracts, including CBD oil, prepared from the marijuana plant‘.”
Read the Judge’s ruling and the plaintiff’s Complaint.
Boston Globe: “two women say they put their life savings into two marijuana dispensaries in Arizona, but ran short of cash when implementation of that state’s medical marijuana law stalled. In a complaint they filed in September with Arizona regulators, they allege that the New York investors they turned to for help took control of the company without their knowledge. ‘I was so mad for so long, when we finally realized we had been totally duped,’ said Linda Shaughnessy, 66. ‘I lost $400,000’. . . . the lawsuit filed by 4Front Advisors LLC . . . says in its Arizona suit that [Nicola] Vita and his partners owe a $50,000 fee and 5 percent of a Prescott, Ariz., dispensary’s gross revenues.”
Marielys Rosado Barreras wrote in Law360: “The use of marijuana (in various quantities and forms) has been legalized (in a variety of ways) in 20 states and the District of Columbia. Nonetheless, marijuana is still listed as a Schedule I controlled substance under the Controlled Substance Act (CSA), and therefore its possession, use and distribution remains a crime under federal law. Further, the U.S. Supreme Court has ruled that the federal government has a right to regulate and criminalize the sale and use of marijuana, even when a state’s laws permit marijuana to be used for medical purposes. For example, in Gonzales v. Raich,
Thus, the court held that even small amounts of home-grown marijuana triggered the CSA because there was a threat of unwanted commodity diversion that could disrupt Congress’ regulatory control over interstate commerce. “
The Sacremento Bee published an article that is a history of recent developments with respect to California’s medical marijuana industry. The article was adapted from Peter Hecht’s book “Weed Land.”
CBS Denver: “If there was any doubt that the ‘green rush’ is on in Colorado, the scene outside a marijuana industry career fair in Denver on Thursday looked like a throwback to the Great Recession. Thousands of people waited for hours with resumes in hand in a line that stretched several blocks. The O.penVAPE Cannabis Job Fair featured 15 different businesses associated with recreational marijuana sales, and it had turn people away by the day’s end.”
Los Angeles Times: “The Obama administration handed backers of medical marijuana a significant victory Friday, opening the way for a University of Arizona researcher to examine whether pot can help veterans cope with post-traumatic stress, a move that could lead to broader studies into potential benefits of the drug.”
Ultra Health, LLC, an Arizona limited liability company, sued Healing Healthcare 3, Inc., an Arizona nonprofit corporation for among other things, breach of a joint venture agreement that involves the marijuana grow facility at 410 S Madison, Tempe, Arizona (the “Premises”). See a copy of Ultra Health, LLC’s, Complaint.
During a hearing in Maricopa County Superior Court on March 14, 2014, Ultra Health, LLC’s attorney claimed that Ultra Health, LLC, has some kind of license related somehow to medical marijuana. The judge asked the parties to submit to him by the end of business that day proof from the Arizona Department of Health Services that the party had a medical marijuana dispensary license.
Healing Healthcare 3, Inc., is a co-tenant on the lease for the Premises with Holistic Patient Wellness Group, LLC. Below is the text of a March 14, 2014, the letter sent by AZDHS to Holistic Patient Wellness Group, LLC, that Healing Healthcare 3, Inc., submitted to the judge on March 14, 2014.
March 14, 2014
Kathy Sanchez, Principal Officer
Holistic
45000 S, Lakeshore Drive, Suite 343
Tempe, Arizona 85285RE: Medical Marijuana Program
Dear Ms. Sanchez:
Pursuant to the request of the dispensary certificate holder to clarify ownership and authority to operate a medical marijuana dispensary and cultivation site, the Arizona Department of Health Services (AZDHS) confirms that a dispensary registration certificate (DRC) was issued to Holistic Patient Wellness Group, LLC. Further, AZDHS issued an approval to operate to Holistic Patient Wellness Group, LLC to operate a dispensary and cultivation site and AZDHS recognizes them as the current and sole holders of the DRC.
AZDHS can confirm that it does not recognize Ultra Health, LLC as a holder of this or any other dispensary registration certificate.
Sincerely,
Jeff Bloomberg, Manager
Division for Planning and Operations, Administrative Counsel and Rules
I’m sorry, but I can’t help but repeat my favorite part of the above letter:
“AZDHS can confirm that it does not recognize Ultra Health, LLC as a holder of this or any other dispensary registration certificate.”
To learn more about Ultra Health, LLC, enter Ultra Health in the search box at the top right of this page and press your enter key or click on the topic in the right column called “Zoned Properties & Duke Rodriguez.”
For the record, Holistic Patient Wellness Group, LLC, is a client of mine.
Wall St. Journal: “Colorado Governor and now drug kingpin John Hickenlooper is doing booming business in the marijuana trade. This week the Mile High State reported a revenue windfall of $2 million from merely the first month of recreational pot taxes.”
KVOA News 4 Tucson: “News 4 Tucson Investigators discovered, there’s another marketplace for medical marijuana – the online marketplace. A simple search on craigslist reveals what we’re talking about. Sellers advertising their goods, including different varieties, or strains of marijuana. And, it’s all just a few clicks away. Will Humble, with the Arizona Department of Health Services tells the news 4 Tucson Investigators, these online sellers aren’t following state law as it was approved by voters. ‘Patients can exchange marijuana with each other, as long they’re a qualified patient with a current card, they’re allowed to exchange marijuana with each other, as long as nothing of value, other the than the marijuana is exchanged,’ Humble says.”
Phoenix New Times: “we wanted to catch you up on a situation we wrote about in November, when another bona fide patient was caught in a DUI stop and found to be in possession of a single piece of infused candy. The patient, whom New Times is not identifying at his request, had purchased the Tootsie Pop-like candy at a local “compassion club” that isn’t approved by the state to sell marijuana. . . . In January, Montgomery’s office dropped the charge unexpectedly, claiming that the evidence had been destroyed.”
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.”
Nogales International: “A clear-cut field east of Interstate 19 in Amado will be the new site of a medical marijuana greenhouse that operators say will produce 1,700 pounds of organic pot each year. The grow site comes as Arizona’s medical marijuana industry gets off the ground and companies expand their operations. In the case of the Amado grow site, all of the marijuana produced there will be sent to the Nature’s AZ Medicines dispensary in Fountain Hills.
Arizona Daily Star: “Tucson’s decision to limit the size of marijuana cultivation sites means growers are taking their farms — and jobs — to Phoenix. Dispensaries in Tucson city limits are allowed up to 3,000 square feet to grow marijuana off-site — provided they can find one that’s not too close to a school, church, park, child-care center or substance-abuse rehabilitation facility. Sahuarita, Oro Valley and Pima County limit dispensaries to 2,000 square feet for cultivation.”
A poll of 701 heads of households by Behavior Research Center released on February 18, 2014, starts with:
“By a ratio of 51 to 41 percent, Arizonans favor making the sale of marijuana legal in Arizona. These figures are very similar to a recent national poll completed by CNN/ORC (Opinion Research Corporation) which found that 54 percent favor such sales while 45 percent are opposed.”
Wall St. Journal: “Zoned Properties, Inc. . . . a lessor of land, facilities, and equipment to the medical marijuana market in Arizona announces that it has closed on all of the real estate associated with the approved site for a medical marijuana dispensary located in Gilbert, Arizona for $1.115 million. The Town of Gilbert has already granted a conditional use permit and approved the design of the property, which is properly zoned for a medical marijuana dispensary.”
A search of deeds filed with the Maricopa County Recorder shows a Warranty Deed and affidavit of property value for a parcel of vacant land acquired by Zoned Properties, Inc., on January 30, 2014, for $300,000. The property is located at 988 South 182nd Place, Gilbert, Arizona.
Query: Why does Zoned Properties, Inc., say it purchased the Gilbert property for $1.115 million when the affidavit of property value states the purchase price was $300,000?
Zoned Properties, Inc., a Nevada corporation, lists its headquarters in Scottsdale, Arizona, but it is not a corporation formed in Arizona or licensed to do business in Arizona. Zoned Properties, Inc., is violating Arizona Revised Statutes Section 10-1501.A, which states “A foreign corporation shall not transact business in this state until it is granted authority to transact business in this state.”
The corporation was formerly named “Vanguard Minerals Corp” until 10-2013, “knewtrino, Inc.” until 10-2007 and “Mongolian Explorations Ltd.” until 5-2006. See its financial statement for the nine month period ending September 30, 2013.
Zoned Properties, Inc., appears to be a publicly traded company. Marc J. Brannigan is the President & CEO and Charles Randall is the COO.
CBS Denver: “Colorado is one of 20 states where medical marijuana is legal and one of two states where recreational pot is legal for adults. Texas is not one of those states, but some people who live there claim they are getting high thanks to family and friends shipping the drug to them.”
Phoenix New Times: “According to the results from Scutari and Cieslak (a local firm), 51 percent of their poll respondents opposed legalizing marijuana, with 43 percent in favor of it, and the remainder undecided.”
Modern Times: “Arizona Business Owners Explore The Liability Of Workers Who Are Potentially In Violation Of Federal Narcotics Laws And Under The Influence Of Medicinal Cannabinoids. Several U.S. states have decriminalized medicinal cannabinoids, but Arizona is one of the only states that included a clause for employers in its statute. Under most circumstances, employers cannot discriminate against medical marijuana holders by virtue of their card holder status. . . . The act does not require employers to allow the use of medical marijuana at work or to allow any employee to work while under the influence of cannabis.”
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]