Since founding West Hollywood marijuana-dispensing company Medbox Inc. in 2010, P. Vincent Mehdizadeh has taken and relinquished the titles of chairman and chief operating officer. Now he’s given up another: majority shareholder.

Mehdizadeh, whose stake in the company was once (briefly) worth more than $1 billion, announced last week that he would sell the vast majority of his holdings to a private investment firm for far, far less: $10 million, plus as much as $5 million in bonuses.

The move, which will make cannabis-focused investment firm Lizada Capital the firm’s controlling shareholder, sent Medbox shares soaring. For the week ended March 4, shares, which trade over the counter, were up 24 percent, closing at $2.38. That made the company by far the biggest gainer on the LABJ Stock Index.

Mehdizadeh has not been a Medbox executive since early last year, but he’s stayed active in the company’s operations as majority shareholder. In January, he announced he planned to replace the company’s board and executives – many of whom he’d helped recruit – and return to the board himself. He later backtracked, and the company’s leadership remained in place.

Now, Mehdizadeh said he is giving up control to ensure the company has a chance to lead the legal marijuana industry. His deal with Lizada calls for the firm to pump $5 million in cash into the company by buying new shares that will, later, be transferred to Mehdizadeh.

“Sometimes, founders of the company need to take one for the greater good of the shareholders,” he said.

The deal, announced March 4, calls for him to sell a roughly 55 percent stake to Lizada, leaving him with just under 10 percent of the company.

Over the next 15 months, Lizada will pay $10 million, half in cash and half in the new Medbox shares it will purchase on his behalf, according to a filing with the Securities and Exchange Commission. He could get another $5 million if Medbox shares start trading above $5 after the other payments are complete.

Mehdizadeh said he did the deal now because Medbox’s stock has not performed well lately – it has lost more than 90 percent of its value in the past 52 weeks – and the company needs working capital.

Lizada, which has offices in New Jersey and Arizona, formed in 2004 but began focusing on the cannabis industry in 2013.

Still, it’s not a done deal.

In a response to Mehdizadeh’s announcement about the transaction, Medbox’s directors and management said in a statement that while the deal could be favorable to the company and shareholders, they haven’t finished reviewing the agreement.

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