Vincent Mehdizadeh, founder and majority shareholder of West Hollywood’s Medbox Inc., notified investors Friday that he will replace the marijuana dispensing company’s board of directors, its chief executive and its chief financial officer.
It’s just the latest in a string of dramatic moves Mehdizadeh has made over the past year. He gave up much of his control over the company early last year and brought in more seasoned executives as Medbox sought the legitimacy of a Nasdaq listing. Now he says he’s overhauling the company once more and replacing some of those same executives.
Mehdizadeh filed a consent action with the Securities and Exchange Commission replacing the current board with himself and three other new directors. Former Medbox vice president Matthew Feinstein will take over as interim president for Guy Marsala, the firm’s current president and chief executive, according to a statement. Marsala and current chief financial officer Doug Mitchell will be asked to stay on as consultants to ease the transition while the company finds their replacements.
The changes will take effect on or after Jan. 29, according to regulatory rules that require 20 days to pass after stockholders have been given such a notice.
“We are taking the company back to what made us successful in the first place, keeping a lean budget, capitalizing on our industry best patents, targeting key endeavors, communicating with shareholders and being able to react quickly to regulatory changes as new opportunities present themselves,” said Mehdizadeh in a statement. “The action taken today will allow the company the freedom to operate again with all hands on deck.”
Medbox stock dropped 77 percent last year, closing 2014 at $5.58. Shares closed at $6.45 on Friday. Mehdizadeh currently owns more than 26 million Medbox shares, representing a 58 percent stake. The company sells high-tech marijuana-dispensing machines and consults with dispensaries.
Joining the board in addition to Mehdizadeh will be Feinstein; Jaime Ortega, who previously oversaw operations for Medbox machine maintenance and point-of-sale software updates; and David Trecek, who has designed and deployed video surveillance systems for casinos and fast-food franchises.
They will replace Marsala, a former chief executive of oil-chain franchise EZ Lube; J. Mitchell Lowe, a co-founder of Netflix and former president of Redbox; Ned Siegel, former U.S. Ambassador to the Bahamas; and Jennifer Love, whose two decade tenure at the Federal Bureau of Investigation included a year as Assistant Director of the Security Division.
“We spent millions last year in director and officer compensation and while their impressive backgrounds in combination with the risk factors inherent to the industry we operate in might warrant such compensation, the company is better off reducing overhead and making a push this year to get profitable again,” said Mehdizadeh in a statement.
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