- Share via
- Vincent Mehdizadeh is a well-known, colorful and controversial figure in the Los Angeles weed industry.
- At least 14 investors are now suing Mehdizadeh and other leaders of Pineapple Express and its sister companies, alleging fraud and breach of contract.
To investors, Vincent Mehdizadeh pitched himself as a rags-to-riches Los Angeles success story — a man whose family fled religious fundamentalism in Iran and who later grew up to transform the legal cannabis industry through technology.
As the founder of Medbox, a company that pioneered the use of biometric sensors in pot vending machines, Mehdizadeh wrote that he had “pushed the conversation about cannabis, an amazing wonder plant, into the mainstream public’s psyche.”
So, when the brash, Porsche-driving weed entrepreneur announced he was advising several partners in the creation of a new chain of swank cannabis shops dubbed “Pineapple Express,” investors such as Grammy-winning rapper Tauheed K. Epps, or 2 Chainz, ponied up millions.
At a festive pre-opening for the flagship store at the corner of Hollywood Boulevard and Vine Street, company officials rolled out a red carpet for Epps and other entertainers as marijuana rocketed through the old theater building’s pneumatic tube system. The spectacle appeared to be the sort of business triumph Mehdizadeh prided himself on.
“If I possess a secret ingredient, an essential trait that separates me from those who cash in their chips and call it a day to the detriment of others, it’s this: The desire to do the best I can for those who believe in me, combined with the will to prove my detractors wrong,” he wrote in a self-published memoir, “Huma Rising: My Journey from Bankruptcy to Billionaire Back to Aspiring Upstart in the Cannabis Industry.”
At least 14 investors are now suing Mehdizadeh and other leaders of Pineapple Express and its sister companies, alleging fraud and breach of contract. Among other accusations, plaintiffs claim Mehdizadeh and other leaders induced them to invest sometimes hundreds of thousands or millions of dollars — then failed to adequately pay out investors and either stopped responding or began to give excuses as to why payments were not coming, the suits allege.
One person suing is 2 Chainz, who invested more than a million in the business, according to his suit.
Mehdizadeh, 46, has denied all allegations of misconduct, saying that investors knew their financial decision to fund a marijuana start-up was risky.
Mehdizadeh is not listed as an executive of the Pineapple Express. He has described himself to The Times as an “avid” founder and senior adviser who works with the other leaders to make key decisions.
“As founders, we remain fully committed and will be opening up additional stores under the Pineapple Express brand and bringing value to our shareholders,” he said in an emailed statement to The Times. “A venture isn’t a failure until its founders give up. If dedicating years and 70-hour workweeks to a struggling startup were illegal, every entrepreneur who takes on outside capital and faces setbacks would be criminalized. Equating business challenges with criminality is absurd. Pineapple Express is still alive and well.”
In the lawsuits, Pineapple Express investors pointed to allegations of wrongdoing that Mehdizadeh faced in his last pot business.
Mehdizadeh’s Medbox — a patented marijuana lockbox that used fingerprint technology to dispense weed to customers — became an instant media darling in 2012. In his book, Mehdizadeh claimed the company’s soaring stock prices made him worth more than $1 billion at one point.
The Securities and Exchange Commission claimed in a 2017 suit against Mehdizadeh that he made illegal stock sales of Medbox shares to a shell company he controlled through his fiancée. The sales led investors to believe the company was doing much better financially than it was, the SEC claimed. Mehdizadeh, they said, used the used the money to purchase a home in the Pacific Palisades.
As a result of the lawsuit, Mehdizadeh agreed to pay $12 million in restitution and also agreed to never again serve as an officer or director of a publicly traded corporation.
In his book and in comments to The Times, Mehdizadeh said he sold the Medbox stock based on bad advice from a securities attorney Phillip Koehnke, whom he sued in 2018. He also said the SEC’s lawsuit was based on “unfounded claims.”
Koehnke did not respond to requests for comment, but filed a scathing answer to Mehdizadeh’s suit against him in his response to the civil lawsuit.
“Mehdizadeh is a convicted felon and fraudster who holds himself out as a successful and high-profile entrepreneur,” Koehnke’s legal response said. “[Mehdizadeh’s] long history of trouble with the law and various authorities, including the Securities and Exchange Commission, is well-documented in the public record. Equally well-documented is [Mehdizadeh’s] modus operandi of very publicly blaming others for the misconduct in which [he] is regularly embroiled. As [Mehdizadeh] would tell it, nothing is ever his fault. The fault always resides with someone else.”
The case settled in 2022 and Koehnke paid a pretrial “nominal sum,” Mehdizadeh told The Times. Koehknke did not respond to The Times’ request for comment to this claim.
Mehdizadeh was pushed out of Medbox by the board in 2015, according to his book and court documents reviewed by The Times, but was already working on Pineapple Express, a company he founded the same year, he said in his book.
“With Pineapple Express, I am Reborn,” he titled the penultimate chapter of his book, which was published in 2016.
The offer to invest in a marijuana dispensary operating at the corner of Hollywood and Vine seemed too good for Catherine Kleve to pass up.
The 52-year-old Minnesota realtor was looking to invest her life savings. She had considered a few companies in her home state, but then she was contacted by Pineapple Express. They emailed her renderings of the storefront and said her investment would be entirely repaid in a matter of months, Kleve said in an interview.
In 2021, she invested $500,000, according to her lawsuit.
Kleve said she was supposed to receive dividend payments, but the small payments stopped altogether after about a year. When her nephew died and she had to pay for his funeral, Kleve tried to exercise her contract’s put option, according to court documents and an interview with The Times.
A put option requires a company to buy stock back from an investor — under certain conditions — if the investor demands it. Kleve said that under her put option, she should have gotten all of her money back plus 10%. She said she never got paid, though.
When she asked where her money was, the company told her she was high maintenance and said no other investor asked so many questions.
“I said, ‘You guys, I need money. What the hell are you guys doing?’” she recalled.
Mehdizadeh told The Times that the company was working to address her concerns.
“Ms. Kleve is also receiving monthly email updates on the company’s progress and our ability to service her put option, since she wants out,” he said.
Mehdizadeh’s family immigrated to California just after the Iranian revolution. His father had worked for the Shah, but struggled in business in California, Mehdizadeh wrote in his memoir.
Their house was foreclosed on when he was in high school and Mehdizadeh was arrested for breaking and entering as a teen. He said he straightened himself out after that and began helping his father to run the family’s legal referral company at age 19.
Mehdizadeh and his father were both arrested in 2010 and charged with grand theft from clients in the lawyer-referral business. The Los Angeles County Dist. Atty.’s office said that between 2002 and 2009, the father and son had stolen payments from 15 victims who paid between $2,000 and $200,000 each, according to a press release.
The Mehdizadehs took money from people for immigration cases but “did not file or filed fraudulent documents with U.S. Citizenship and Immigration Services,” the L.A. County Department of Consumer Affairs said. Both agencies said that Mehdizadeh and his father pretended to be lawyers as part of their scheme.
“Many of the Mehdizadehs’ victims were forced to leave the country because of their failure to file appropriate documents,” the department said in a press release.
Mehdizadeh pleaded no contest to two grand theft charges in the case in 2013, though he denies all wrongdoing. He agreed to pay $450,000 in restitution. In his book and statements to The Times, Mehdizadeh claimed he and his father did nothing wrong and were actually the victims of an unscrupulous lawyer they worked with who stopped serving clients and left the business high and dry.
By 2021, Mehdizadeh had started using the last name Zadeh, and was nowhere to be found in Pineapple Express’ promotional materials (in the past, he sometimes went by the moniker Vincent Chase, after the character from “Entourage”).
Yet emails reviewed by The Times and interviews with investors revealed that he was an active leader of the company, referring to himself as the co-founder, frequently messaging with investors and making decisions about the companies. Mehdizadeh told The Times he is a “senior advisor” to the company now and notes that he was an “avid founder.”
Plantiffs allege there is a reason he does list himself as an officer.
“Zadeh is not listed as an officer or director of [Pineapple Ventures, Inc.] or any of its affiliated entities because he is permanently enjoined from doing so as a result of the judgment against him,” wrote attorney Devon Roepcke in one lawsuit filed against Mehdizadeh. “Instead, he utilizes... other individuals to serve in those roles, and to sign any official documents pertaining to PVI and its affiliated entities.”
Josh Eisenberg was one of those individuals. He first spoke to Mehdizadeh in 2018, a year after the SEC agreement. While Mehdizadeh acknowledged his complicated business history, he did not take responsibility for it.
“Thanks for being classy and not grilling me about my prior company. Still kind of a sore subject for me as I put my heart and soul into it like you wouldn’t believe and I got screwed pretty hard on that one by bad advice from attorneys and a dirty board member,” Mehdizadeh wrote in an email to Eisenberg and others in 2018. “I didn’t let it crush me like it would most people.”
At the time, Eisenberg said, he believed Mehdizadeh.
“I was so excited about getting to be an officer [of a company] for the first time,” Eisenberg said. “There was a lot of positivity and hope at the beginning.”
Eisenberg was brought in as chief operating officer of Pineapple Express and worked to open up the company’s many planned dispensaries.
Despite the C-suite names, Eisenberg said it was always clear that Mehdizadeh was in charge.
“Vince is the ringleader,” he said.
Eisenberg said in an interview he began noticing red flags at the company. There were constant money issues despite all the investors. Mehdizadeh would give dates for store openings that routinely had to be pushed back. Eisenberg also said he had no insight into the capital that was being raised.
Eisenberg left the company in 2023 and litigation ensued over who controlled the Hollywood and Vine store, which Mehdizadeh’s company now controls.
Eisenberg has “misrepresented the situation out of spite and malice,” Mehdizadeh told The Times. He claims Eisenberg’s actions have led to “damaging press, lawsuits by our shareholders, and a decline in investor confidence.” Mehdizadeh said that Pineapple Express won the lawsuit against Eisenberg, but court records show the initial suit was settled and Eisenberg was paid $250,000.
Mehdizadeh subsequently sued Eisenberg again for alleged breach of that settlement agreement and Eisenberg was ordered to pay $17,000, according to court records.
Cyndi Trinh had heard about Pineapple Express through Damien “Big Percy” Roderick, who had introduced her to Credle around New Year’s 2020. She had been partying with Credle, Big Percy, Snoop Dogg and others in Miami, she told The Times in an interview. Big Percy had brought in another big investor, 2 Chainz, who put in more than $1 million, she said.
Big Percy told her it was a “no-brainer” to invest. She put in $150,000 in November 2020 for a 2% stake in the Hollywood location. She also paid loans to Mehdizadeh’s companies that were not fully repaid, she said in a lawsuit and interview with The Times.
She says she is owed more than $400,000 for her initial investment and subsequent loans. Trinh sued and the case remains open.
She tried to exercise her put option to recover her initial investment on Aug. 21, 2023, but Mehdizadeh refused that same day, according to an email shared with The Times.
“We are currently not honoring any put options,” he wrote. “We will let you know if and when that changes.”
“Ms. Trinh is also receiving monthly email updates on the company’s progress and our ability to service her put option, since she wants out,” Mehdizadeh said in a statement to The Times, about a year and a half after she requested her money back.
Mehdizadeh said the put options were included in contract language at a time when the legal marijuana landscape appeared more optimistic.
After a legal dispute between Eisenberg and Pineapple Express over who controlled the flagship store, a judge appointed a receiver, Ted Lanes, to handle the business. The receiver discovered a business in complete disarray.
Mainly, he found that the business had been withholding taxes from employees’ paychecks, but not turning the taxes over to the local and federal tax authorities, according to a report he filed in Los Angeles Superior Court.
In 2023, Lanes found that the dispensary owed just under $900,000 in taxes, according to the report. The California Department of Tax and Fee Administration instituted a “till-tap” on the business, requiring Pineapple Express to hand over $7,000 every other week until the debt is paid, according to the receiver.
Mehdizadeh said the company had implemented a “comprehensive turnaround strategy,” which included “settling outstanding tax obligations and establishing structured payment plans with the relevant taxing authorities.”
He did not respond to questions about where the $900,000 in unpaid taxes went or why tax authorities were not immediately paid.
Catherine Kleve still hopes that one day she will recoup the $600,000 she claims Pineapple Express still owes her, but her dreams of making money through her investment are gone.
“It’s been a nightmare for me. I grew up poor and have worked so many jobs,” she said. “I’ve always done the right thing. All I’ve done is work, work, work.”
At the end of his 2016 memoir, Mehdizadeh wrote that he does not measure his success on his net worth. Instead he thinks of his investors.
“That kind of positive impact on people’s lives is what I believe is my greatest accomplishment. That is my true legacy, and I expect to do the same at Pineapple Express.”
