It’s not often a chief executive tells investors their company’s stock is vastly overvalued. But that’s just what Bruce Bedrick of West Hollywood’s MedBox Inc. did after a week that saw the company’s stock rise more than 4,000 percent.
Shares of MedBox, which makes ATM-like devices that dispense medical marijuana and other pharmaceuticals, opened at $4.75 on Nov. 12 and traded as high as $215 during that week. Shares later cooled, closing the week at $20 on Nov. 16. While those prices are based on trading of just a few thousand shares, the activity prompted Bedrick to advise investors that they should proceed with caution.
“Our fundamentals and market potential are improving … but we temper investor expectations at present price points,” he said in a statement.
He attributed the stock’s meteoric rise to an article on the Wall Street Journal’s MarketWatch website that mentioned MedBox as one of a few marijuana-related stocks that could do well in the wake of newly relaxed laws in Massachusetts, Washington state and Colorado.
That notion might have driven the stock’s run-up, but MedBox executives see much of the company’s potential growth coming from products not designed for dispensing marijuana.
Last month, the company announced it would create a new division, MedBox RX, to focus on new products used in pharmacies and doctors’ offices rather than marijuana dispensaries, such as a locker system that could be installed at pharmacies to allow customers to pick up prescriptions after business hours.
The company also unveiled a locker system designed to let online shoppers have packages delivered to a secure location instead of having packages left on a front porch. Lockers would be placed at grocery or convenience stores and would allow customers to pick up a package by typing in a security code or scanning their fingerprint.
Executives believe the locker system, called Safe Access Storage, and MedBox RX products will match or outpace sales of the company’s core MedBox marijuana dispensing system over the next few years.
“I think we always had an idea we were going to venture out,” said MedBox founder Vincent Mehdizadeh.
GIB LLC, the North Hollywood company behind the popular Brazilian Blowout brand of hair-straightening treatments, plans to move production of its product from Brazil to a local plant.
The company announced the move earlier this month, though it did not provide the name or location of the company that will manufacture Brazilian Blowout products.
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