Cannabis Operator Loses Big Money in Email Fraud

MariMed is a multi-state cannabis company based in Massachusetts and operating in four other states. The company is known for its Betty’s Eddies fruit chews, Bubby’s Baked soft and chewy baked edibles, and its Vibration: High + Energy powder drink mixes, among other offers. 

It appears that earlier this year, MariMed lost a huge amount of money in a dubious transaction that the company tried to stop but failed. The off-target transfer concerns a sum of $646,000 to an unauthorized recipient that deceived MariMed through forged emails. 

The entire operation likely took significant time and effort of planning. After all, gone are the days of sending phishing emails to thousands of accounts and hoping that someone will get caught in the trap. 

So, What Exactly Happened?

MariMed completed the $646,000 transaction to an unauthorized recipient after receiving an email that turned out to be forged, according to Marijuana Business Daily. The details about the fraud emerged in MariMed’s latest quarterly report filed with U.S securities regulators. 

Howard Schacter, the chief communication officer at MariMed, told MjBizDaily that the deceptive activity took place over a period of a few months. 

“This was a very sophisticated, global fraud that we believe took months of planning and we have been working with the FBI and local police during their investigation,” Schacter said in an emailed statement to the news outlet. 

For now, the sum of $646,000 has been accounted for as expense in the company’s financial report. But MariMed may still be able to get back its lost funds. 

“We have nothing further to share other than that our expectation is we will recover lost funds either from the bank or through our cybersecurity insurance policy,” said the statement from Schacter.

The company’s 10-Q form for the third quarter of 2023 indicates that the forged transfer was in connection with payment on a term loan. The filing further sets out that the sum was sent to a Chase Bank account provided in the falsified email previously sent to MariMed. 

The multi-state operator said in its quarterly filing that an investigation from Chase Bank on the fraudulent transaction is still ongoing. It appears, however, that initially the transfer was on hold as the bank investigated a problem. Yet the transaction still went forward. 

Reportedly, the fraud has been revealed just days after the company’s chief financial officer submitted his resignation. It still remains unclear whether there’s any connection between the two events. 

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