California-based marijuana retailer MedMen disclosed that a content production firm it paid wound up promoting the company’s stock through at least one online article, a move that drew scrutiny from U.S. over-the-counter trading officials.
According to a news release, MedMen hired Winning Media in January to help bolster its image through online ads.
Then, on Feb. 25, Winning Media got an article published on marijuanastox.com that urged readers to buy MedMen stock.
MedMen said it received inquiries the following day from the OTC Markets Group “regarding certain promotional activity concerning MedMen securities.”
The OTC Markets Group owns and operates the over-the-counter exchange where MedMen’s stock trades under the ticker symbol MMNFF.
According to Barron’s, MedMen undertook “due inquiry” after the notification from the OTC Market Group.
In its release, MedMen said it provided Winning Media with “supporting documents” that included the company’s public filings, news releases and an investor relations presentation.
“The Company’s officers had editorial input into the creation of the article,” MedMen said.
MedMen also said it “concluded, upon investigation, that, in this instance the article was not approved according to the Company’s internal procedures.”
MedMen added that it “disclaims any potentially exaggerated or misleading statements contained in the materials.”
The Los Angeles company also “has instructed (Winning Media) to remove all promotional materials regarding (MedMen) from the public domain and to cease all promotional efforts,” according to MedMen’s release.
In addition, MedMen maintained that it was unable to determine if the promotional article resulted in any “increased trading activity of the company’s stock.”
MedMen noted that none of its officers, controlling shareholders or third-party service providers sold any stock in the past 90 days, except for Dec. 5, 2018, when the company completed a “bought deal” public offering of shares.