Following the market close on Monday, MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) made a statement claiming it wasn’t aware of stock promotion activity by a company it hired for public relations. Yet in the statement, the company admits “There are statements made which encourage investors to purchase the stock of the Company.”
MedMen acknowledged in the statement that the OTC Markets had made inquiries about promotional activity relating to promotional materials encouraging investors to buy the company’s Class B Subordinate Voting Shares.
“After due inquiry, the Company identified the promotional materials as an article featuring the Company that was posted on February 25, 2019, on the website marijuanastox.com by Wining Media LLC. WM is an independent third-party investor relations and consulting firm. The Company engaged WM orally in January 2019 to provide public relations and communication services for the Company.” MedMen said that the campaign was only intended to drive awareness of the company, its business and its securities. The story is now password protected https://marijuanastox.com/the-single-best-way-to-play-a-market-soaring-to-80-billion-per-year-retail/.
The stock price increased between February 26 and February 28th, but MedMen claims that the stock price could have increased because the company announced that it would be reporting earnings on February 27. They believe this is why the activity increased.
MedMen also claims that the article published by WM “was not approved according to the Company’s internal procedures.” However, the company also stated that its officers had editorial input into the creation of the article. In addition, MedMen provided WM with supporting documents including public filings, prior press releases, and an investor relations presentation.
MedMen says that it “is committed to compliance with the OTC Markets Group Policy on Stock Promotion and the OTCQX Standards and Canadian securities laws. The Company does not condone the use of sensational language to describe the Company’s business prospects or the growth potential of the Company’s industry. The Company does not condone any statements made regarding urgency to invest in the Company’s stock or any other similar statements. Going forward, the Company will affirmatively prohibit all third-party service providers from including such statements in any investor relations or promotional materials respecting the Company.”
A variety of public relations firms have been hired by MedMen including Edelman (New York, NY); Azione (New York, NY); Stockhouse Publishing, Ltd (Vancouver, Canada); CFN Media Group (Whitefish, Montana); and Wining Media LLC. WM was asked to remove all promotional materials regarding MedMen from the public domain and to cease all promotional efforts on behalf of MedMen.
The OTC inquiry follows a lawsuit filed by the company’s former CFO James Parker in which he alleged securities violations, which the company also denies.