Category: Entrepreneur Journey

09
Mar

Medbox: Charged by SEC for Securities Fraud

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

The Securities and Exchange Commission today 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.

“As alleged in our complaint, investors were misled into believing that Medbox was a leader in the burgeoning marijuana industry when the company was just round-tripping money from illegal stock sales to boost revenue,” said Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office.

Mehdizadeh and Medbox, which has since changed its name to Notis Global, have agreed to settle the SEC’s charges.  Mehdizadeh agreed to pay more than $12 million in disgorgement and penalties and agreed to be barred from serving as an officer or director of a public company or participating in any penny stock offerings.  The settlements are subject to court approval.  The SEC’s litigation continues against Bedrick, Legaspi, and New-Age.

The SEC’s investigation was conducted by Megan M. Bergstrom, Roger Boudreau, and Spencer Bendell of the Los Angeles office.  The litigation will be led by Gary Leung.  The SEC appreciates the assistance of the Financial Industry Regulatory Authority.

01
Oct

A Cannabis Entrepreneur’s Journey

Tales about my journey from parent to cannabis entrepreneur.

For the past few years, my son has been asking me for advice on subject matters where I had a lot of experience and could answer the question at hand with ease.

Other times, there were questions where I virtually had no experience other than the times he was in trouble.

Usually this advice came from an officer and carried a heavy penalty of both time and money.

Cannabis entrepreneur journeyAt first I felt helpless, angry and confused, but as each sleepless night passed, these questions began to wear on me. I knew down deep that reprimanding him was not working. His passion seemed unbreakable, and over and over again, I felt that I was not the reliable source of information that I should be as a parent. Especially, when it came to the current laws and penalties associated with the cannabis industry, and that is the culture in which he resides.

So, I have challenged myself to do something about it…

19
Sep

The Cannabis World Congress and Business Exposition in Los Angeles

Yesterday, a good friend of mine and I were very happy we took a stroll around the Cannabis World Congress and Business Exposition at the Los Angeles Convention Center. Ending today you can still learn almost every aspect of the ever changing cannabis industry. From edibles for both human and pet consumption, education, financing, laws, tax and accounting issues, to tool of the trade. It was all here.
This is what stick with me:
* The chocolate edibles are incredible from both GFarmalabs and the Something Special people. Also, check out Canna Flavors… very, very, very good!
* As far as CBD enriched products for pets and human consumption look for Hemp Health Inc. and True Leaf Pet foods.
* If you are looking for work there are a number of educational institutions to help. Gradujuana and Cloverleaf Universities come to mind.
* For business opportunities, the Jimmy Hendrix Purple Haze edibles idea looked interesting.
* As far as laws go, make sure you pick up your Marijuana Bill of Rights@ edrosenthal.com
* As far as tax and accounting I liked the people at……………..
* In the area of tools of the trade are concerned check to the GreenBroz trimmer. If you are a serious grower, I highly recommend you speak with the Johnny Depp looking fellow who engineered this modern marvel, you will not be disappointed.
* Go see the Vacuum Sealer People for your packaging needs. They were the only packaging company that I can remember to store your product properly.
Anyway, it was well worth it from this persons perspective and I believe you will feel the same too if you take the time to check it out.

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