As it plants the seeds for a listing on a major stock exchange, West Hollywood’s Medbox Inc. has been adding executives and board members to its payroll. The most recent of those appointments helped shares go higher last week.
Medbox, which contracts with marijuana dispensaries to set up and manage their facilities, last week announced the appointment of Jennifer Love, a 27-year veteran of the FBI to its board.
That news helped Medbox shares rise 20 percent to close at $13.15 for the week ended Oct. 29, making it one of the biggest gainers on the LABJ Stock Index. (See page 32.)
“It looks like the market has had a positive reaction to our appointments,” said Vincent Mehdizadeh, founder and senior consultant at Medbox.
The appointment of an FBI veteran is part of Mehdizadeh’s strategy to bring greater credibility to the firm as it works towards a Nasdaq listing – almost unheard of for a firm in the marijuana business. Shares currently trade over the counter.
Mehdizadeh, who owns a majority of shares, has in recent months brought on a number of seasoned executives to lead the company.
In July, the company hired Chief Executive Guy Marsala, a turnaround expert and former chief executive at EZ Lube, a Costa Mesa oil change company that was sold two years ago. Earlier this month, Medbox hired Chief Financial Officer Doug Mitchell, who previously held the same position at BJ’s Restaurants Inc. in Huntington Beach.
The company also appointed Netflix co-founder Mitch Lowe and former U.S. Ambassador to the Bahamas Ned Siegel to its board earlier this year. Mehdizadeh said Love was the company’s third independent director – the final box for the company to check to comply with Nasdaq listing rules. He said he expects to file the application shortly.
Medbox also changed its business model in the past year to generate more recurring revenue. The firm started out a few years ago by selling high-tech marijuana-dispensing machines to dispensaries.
Now, the company consults with dispensary operators to apply for licenses and set up their operations. Medbox collects monthly management fees from dispensaries of between $25,000 and $150,000.
